What Lord and Lady Black did next

After a winter exiled in Toronto, sans private jet, the invites have finally dried up for Conrad Black and Barbara Amiel. As their London and Palm Beach properties go on sale, David Usborne reports on a spectacular fall from grace
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The Independent Online

A couple of Tuesdays ago a young financial journalist was packing them into the posh Canadian Club in downtown Toronto. Nina Munk's guests were members of Canada's business elite, and the topic was her new book about the misbegotten merger between TimeWarner and AOL. But where she got the crowd going was with serial sarcastic jokes about someone who might have been present, but was not.

There is no telling whether news of Ms Munk's cheap shots reached her unfortunate victim. But it is a good bet it did. He is from Toronto, after all, and recently he has come to expect all manner of assaults on his once-good reputation. We are talking about Lord Black of Crossharbour, the media tycoon who in a few gruelling months has travelled from globe-trotting socialite to social pariah.

For the past decade, Lord Black has lived his dream of corporate statesman, travelling the globe in almost royal splendour as the unassailable head of an empire of newspaper titles that include The Daily Telegraph and the Jerusalem Post. He entertained lavishly in his four luxury homes in Toronto, New York, London and Palm Beach, and rubbed shoulders with the world's most powerful and wealthy. But now all that is over. There are no more corporate jets, no more grand parties and his name, by his own admission, has been dragged in the mud.

He and his wife, Barbara Amiel, who continues to write her neo-conservative column for the Telegraph, have vanished. Where are the Blacks? And what is their state of mind? Is Lord Black, whose fascination with the wartime stratagems of Napoleon Bonaparte is well known, plotting his counter-attack? Or does he struggle even to rise in the morning?

He did get up just two weeks ago to take the stand at a trial in Delaware that marked the most recent - and most troubling - eruption of his troubles. Hollinger International, in which Lord Black's Toronto-based Hollinger Inc has a controlling stake, was suing him for serial violations of agreements he had signed with the company. At the foundation of the trial was the central allegation that has been feeding the crisis since it surfaced nearly a year ago: that he and other executives of the company illicitly enriched themselves for years with unauthorised payments that allegedly exceeded $200m (£108m).

Lord Black, famed for his erudition and wit, already looked a broken man. Pale and pasty, he struggled to answer the charges against him. And there, on the stand, he admitted his good standing was under siege. "I have been horribly defamed and, in fact, characterised and stigmatised as an embezzler," he told the court. "I am trying to retrieve my reputation as an honest man."

He failed. A week ago, Leo Strine, the presiding judge, ruled emphatically in favour of Hollinger International. The ruling blocked efforts Lord Black had been making behind the back of the Hollinger board to sell The Telegraph to Sir David and Sir Frederick Barclay, the reclusive twin tycoons. The pair withdrew their offer. Instead, the board was freed to make its own decisions on whether it should sell the entire company or its individual newspaper assets, and to whom.

But the details of Judge Strine's ruling caused Lord Black the most suffering. He said "it became impossible" to credit Lord Black's word, and he had been "evasive and unreliable". The defendant had, over months, "misrepresented facts to the International board, used confidential company information for his own purposes without permission, and made threats, as he would put it, of 'multifaceted dimensions' toward International's independent directors".

Peter C Newman, a long-time critic of Lord Black who writes for Canada's Maclean's magazine, called the ruling a "beautiful piece of work". But for Lord Black it was a catastrophe. His humiliation seemed complete.

The peer now has his back against the wall. Three years ago, when his power was at its zenith, he renounced his Canadian citizenship to gain the right to the seat in the House of Lords traditionally to granted proprietors of The Daily Telegraph. But he has not been sighted in London for weeks. His Rolls-Royce remains neglected in its slot in the company car park near the Telegraph offices in Canary Wharf.

And while lights came on after dark at his four-storey townhouse at Cottesmore Gardens in Kensington, a reporter's inquiry about whether its owner was at home was met by a curt "wrong address, sir" response from an unidentified man at the door. The London home, said to be worth £14m, with eight bathrooms, an indoor pool and a gym, is said to be on the market. But who really owns it? The Blacks, or Hollinger. What is unquestionably up for sale is the huge, beachside mansion in Palm Beach, Florida, that used to be the Blacks' personal bolt-hole for dreary winters. The giant property, with an Italian-tiled tunnel that runs beneath a main road to a private stretch of sand by the ocean, has been advertised and could fetch $18m. A tax bill of $353,000 tax bill is said to be owed.

Lord Black has serious cash concerns. When Hollinger laid out its allegations against him in November, it demanded a repayment of $7.2m, with a first instalment due by Christmas. He has not paid it. Since then, the company has multiplied the stakes with a new lawsuit, pending in Chicago, that claims Lord Black and other senior executives siphoned $200m from its coffers over the years.

He faces serial lawsuits against him that threaten further financial punishment if they succeed. His legal bills already are said to be running at close to $1m a month.

Even the closest scrutineers of Lord Black are hard-pressed to calculate the precise depth of his personal financial difficulties. Some money, they speculate, may already have been squirrelled away in Barbados to ensure the couple at least a degree of comfort, whatever happens. But the legal troubles may be about to worsen.

Mr Newman believes the greatest threat to Lord Black's future comes from growing signs of scrutiny by the Securities and Exchange Commission in the US over one important piece of Black history.

In the mid-1980s, he escaped punishment by the SEC after it investigated alleged miscompliance with its rules by a company named Norsen with which he was involved. Lord Black was forced formally to undertake that nothing of the kind would happen again with any of his enterprises. If the SEC concludes that fraud was committed in any of Hollinger's filings, he could face criminal charges. "They can throw the book at Conrad and I believe they will," Mr Newman says.

One source claims Lord Black spent the latter half of last week in New York, where a lavish Park Avenue apartment is still his, even if Hollinger has frozen the $248,580 in annual maintenance fees it had paid. He was in town only to confer with those expensive lawyers, from the firm of Sullivan & Cromwell, about a possible appeal of the Delaware ruling.

Lord Black now has no taste for flying to New York. Indeed, he and Amiel no longer fancy flying at all, because they have also been barred from use of two company jets, Bombardier Challenger and a Gulfstream IV. Amiel's disdain for flying commercial is well-known. When asked what she planned to do when Concorde was grounded, she replied: "I never take public transport."

Already Lord Black finds himself almost exiled to the country against which he turned his back three years ago to gain his peerage, his native Canada. On the face of it, this should not be so bad. The massive and architecturally pretentious Georgian pile in Toronto was built on land given to Lord Black by his father. It has its own chapel, consecrated by a bishop, a grand fireplace with 17-century carvings by Grinling Gibbons, a three-storey elliptical library with 15,000 volumes and a copper cupola modelled on the dome of St Peter's in Rome. And for Lord Black, at last, Toronto is still home.

All winter, the couple have barely stirred from the city. And life there for them has not been a social whirl. Lord Black has not been seen for months at his old haunt, the downtown Toronto Club. He has been spotted dining out rarely, most recently in the company of Peter White, one of his oldest friends and a director at Hollinger Inc, at the swish North 44 restaurant. Amiel has not been seen. "People who know her have invited her out, and either got no response or have been told she does not want to go out," said one friend of the family who wished to remain nameless. "One or two have been over to see her, but that's it."

She never much cared for Toronto society anyway. Until three years ago, the Blacks would throw giant Christmas parties at the mansion. Even they stopped after the last party, when a minor Canadian film director showed his gratitude by making fun of it afterwards in a Toronto newspaper. For Amiel that was too much and she vowed, never again. She is considered far more thin-skinned than her husband when people are beastly.

How she must be suffering now. Another friend says the couple seem almost overwhelmed if any of their old circle take the trouble to offer support. They have been devastated by many of their old circle who join the chorus of unflattering commentaries about them in newspapers. On top of that, Lord Black is said to feel luck dealt him a very unfortunate hand when Judge Strine was selected to oversee the trial.

That the once-golden couple should be suffering cold-shoulder treatment in Toronto is not surprising to many. "Toronto has still got this old Presbyterian notion that you don't flaunt your wealth and that you should live a reasonably modest lifestyle even when you can afford a lot better," one old associate said. "It is no wonder Conrad is suffering. Plus there is the sense that Barbara turned her back on her Canadian friends when she and Conrad made it big in London and New York."

Nor has anyone forgotten how quickly he shed his Canadian citizenship for a British peerage. "People in Toronto have been even more gleeful about his demise than people in London." But the worst for the Blacks is the knowledge that people are not just avoiding them but laughing at them too. The Canadian Club gibes surely hurt more than most. It was not just that those who came to hear Ms Munk talk included some of the most mighty of Toronto society.

That she of all people should be making hay of their troubles will have been all the more hurtful, because her father, Peter Munk, one of Canada's most successful tycoons, was once among Lord Black's closest friends.

Lord Black knows the lampooning of his character has run riot. He said as much in a defamation lawsuit he filed against directors of Hollinger in Ontario just a few weeks ago. He was fighting back, he said, because he found himself "pilloried and mocked mercilessly" around the world. Around the world, and even in the city that he once called home, as well.

Additional reporting by Hugh Winsor in Ottawa