Has the far-right become so bereft of ideas and spokespersons to generate its ill-tempered discussions that it now has to turn to institutionalized felons like Conrad Black for its inspiration?
Among the more puzzling of the commentaries prompted by the passing of Edward M. Kennedy, the long-sitting senior Senator from Massachusetts, is surely the one penned at Coleman Correctional Facility in Florida by Inmate No.18330-424, otherwise known as Conrad M. Black. His comments appeared in the National Post the day Mr. Kennedy lost his final battle with brain cancer at the age of 77.
Mr. Black wasted no time in pronouncing the late Senator to be a man of mediocre achievements who will be remembered for nothing outstanding. He also felt it necessary to point out the womanizing proclivities of the Kennedy men, opined that the Senator was probably drinking when his car left the bridge at Chappaquiddick, and rated John F. Kennedy’s presidency as unspectacular –all this before the first head count of the warm prison morning.
Both Mr. Black and Mr. Kennedy enjoyed favored childhoods and private educations, which, along with some early career accomplishments, came courtesy of their families’ wealth and power. Both were trained as lawyers. Both were caught cheating at school and paid a price for it. The Senator made his share of uniquely personal mistakes which saw tragedy strike with an even sharper blow than a more prudent man might tempt. But the difference is that while Mr. Kennedy devoted himself significantly to championing the cause of the less fortunate throughout most of his professional life, and certainly with a fevered pitch in the past two or three decades, the titled, honored and enormously wealthy Mr. Black tended to see himself as a victim ¾of the media, of a Prime Minster who did not think Canadians should be called “lord,” of the U.S. justice system, of overly demanding shareholders and of employees and customers who were regularly given to epidemics of shoplifting, as he was prone to point out in connection with his fabled Dominion grocery store empire. Mr. Kennedy, for most of the past number of decades, sought to atone for his shortcomings and his sins by living a responsible life and in the work he pursued for the benefit of others. Mr. Black has yet to show the slightest remorse for anything he has done, expect perhaps for not fleecing shareholders –whom he dubbed a cheap source of capital– more.
While Mr. Kennedy carved out legislative compromises that helped millions of children, the poor and the elderly, Mr. Black was obsessed with chiseling out a few million more for himself, even if it meant defrauding investors in the process. While Mr. Kennedy gained admiration for carrying the responsibilities of several extended families on his shoulders and was known for his unstinting generosity toward those he did not even know, Mr. Black became infamous for carrying out boxes of evidence in an obstruction of justice spectacle that led him to his current confines in Florida.
It is perhaps not surprising that Mr. Black, even before the Senator was buried, would use the opportunity to strike the low blow, to find a chance to snarl at a man who uplifted so many, and to pronounce himself unimpressed with an historic figure who exemplified liberal values people like Mr. Black detest. Mr. Black’s world is never quite secure when there are those who champion a better minimum wage, struggle relentlessly for more accessible heath care or oppose a war that does not need to be waged and should not be fought, as Mr. Kennedy did with a passion few could rival. Mr. Black, of course, was an early supporter the war in Iraq. As to the idea of a more level playing field so that others might have a shot at the American dream, Mr. Black’s world rests on the idea of privilege and private gain and, above all, never having to “reenact the French Revolutionary renunciation of the rights of the nobility,” as he so famously declared.
Mr. Black, as both the verdict of the courts and public opinion has decreed, has a few problems in the judgment department. One does not need to be a great lover of the sea, as Mr. Kennedy was, to know the consequences that can befall when one is separated from a compass, either of the moral or the magnetic kind. Mr. Black has been bobbing along unmoored and unguided for some time.
As the object himself of great speculation about his culpability in a much larger fraud against the Hollinger companies (see Breeden Report) and having made a loud and persistent case for prosecutorial overreach in connection with the charges that saw his criminal conviction, Mr. Black, one might have thought, would be disinclined to conjecture about Mr. Kennedy’s “driving under the influence of alcohol” while operating the car that went off the bridge and led to the tragic death of Mary Jo Kopechne. That he would engage in such gossip without evidence or fact in a way that just gives his adversaries more standing to do the same about him, suggests that Mr. Black is no longer –if he ever was– in possession of the strategic horsepower enjoyed by the diminutive French Emperor, whom he tended to idolize.
What is most staggering about all of this is that, of the countless candidates at its disposal to render meaningful comments about the life and times of Mr. Kennedy, the National Post and its publishers thought that they should turn to Mr. Black. Has the far-right become so bereft of ideas and spokespersons to generate its ill-tempered discussions that it now has to turn to institutionalized felons for its inspiration? Nor does it betray nothing less than an astonishing lack of journalistic judgment that they would permit an incarcerated and discredited business figure to rate the Kennedy family’s accomplishments when Mr. Black has shown such a peculiar gift for losing the empire he effectively inherited while so many of the other corporate jewels he touched, not to mention his Canadian citizenship and his freedom, turned to ashes in his own hands.
The only explanation for this singularly low contribution to the discussion about the passing of a major figure in American life is that the National Post’s publishers, principally the Asper brothers, also began their lives from a predicate of inherited privilege and wealth. They obviously prefer Mr. Black’s narrowly self-serving, Darwinian view as to how one conducts oneself in the face of such fortune, and not Mr. Kennedy’s more universally ennobling vision of what can be done to help make the lives of the less favored more enriched.
Our thoughts about the rise and fall of Conrad Black can be viewed here.
How grand and ineffably uplifting are these larger-than-life comets that streak across our lives and illuminate our journeys from obstacles and oppression to happiness and hope. When they pass, and the light of their life dims, we find ourselves in a much better place than we otherwise would have thought even possible. Whether it was Ted Kennedy’s destiny to be such a figure or whether he earned it by dint of hard work, good nature and, yes, more than his share of errors in judgment, the tributes that flow to his name today demonstrate that he was one of the more remarkable figures of our time.
It is perhaps never terribly surprising so see men and women who are blessed with name, wealth and family connections follow a path in pursuit of more wealth. What is surprising is when such people put their career and professional treasure in the service of the less blessed, the poor and the people who may not even have known a parent. In his quest for universal heath care, education reform and a better minimum wage for the working forgotten, Senator Kennedy was an uncommon champion.
In the 1970s, I had an interest in a survey research company based in Toronto. The company decided to poll university students across Canada for their views on the most popular leaders at the time. Ted Kennedy topped the poll. We were delighted after the results were published to receive a call from the Senator’s Washington office asking for a copy. We hoped it gave him a chuckle to know that he touched so many youthful minds even beyond the American border.
He was a political touchstone for at least one generation. It will be interesting to see who for the next emerges in that role. Someone will. For in the cause of great achievement and noble deeds the words of Ted Kennedy will always illuminate and set the course:
The work goes on. The cause endures. The hope still lives. And the dream shall never die.
When the President of the United States, especially this President, and Wall Street, are of the same mind on an important matter like who the Fed chair should be, ordinary citizens need to hold on to their pocketbooks.
Having misjudged the gathering financial storm that would engulf much of the world (and in many ways still does) and then deciding to throw unprecedented amounts of liquidity at the problem (most of which was targeted at propping up and otherwise saving a colossally careless banking sector), Federal Reserve chairman Ben S. Bernanke is an odd choice for re-nomination in that post. Nevertheless, President Barack Obama did so today. Wall Street is pleased. When the President of the United States, especially this President, and Wall Street, are of the same mind on an important matter, ordinary citizens need to hold on to their pocketbooks.
In some respects Mr. Bernanke seems like the character from the Woody Allen movie “Zelig,” where an otherwise unimposing man has the inexplicable capacity to transform his appearance to impress those who surround him. We know that Wall Street and world bankers are impressed with Mr. Bernanke, given the size and generosity of the Fed’s discount window and the hundred and one other programs the Fed established in the prop-up and bailout department. And they are certainly impressed by his zero interest rate policy, which is putting billions into the banks as a result of this Fed-made upward sloping yield curve. It is because of Mr. Bernanke that the bonus compensation train has barely slowed from its previous bullet-like speed and companies like Goldman Sachs have been able to return to early profitability with the help of a (Fed-approved) $13 billion payment from AIG, courtesy of the American taxpayer.
The White House may see in Mr. Bernanke a fitting figure whose help will be needed to accommodate and finance the swelling national debt. Mr. Bernanke has already shown that he is not averse to printing money and using the Fed’s powers in out-of-the-box (i.e., expensive) ways. And a Fed head who presided over the largest expansion ever of that institution’s balance sheet is unlikely to cast too critical a glance at the prospect of a record national deficit.
Even most legislators seemed mesmerized by Mr. Bernanke’s appearances to the point where they forgot he was rather disingenuous when it came to explaining the mystery of the Bear Stearns junk assets, which the Fed claimed to be holding as collateral only to admit later that it owned the whole clunker. There are still unanswered questions about the Fed and Bank of America, the Fed and AIG and the Fed and Lehman Brothers.
Not to be forgotten in all of this is the fact that, as a member of the Fed under Alan Greenspan, Mr. Bernanke adopted the same blind obedience to the market forces that permitted the housing bubble to occur and showed no awareness whatever of the explosion of toxic financial instruments and the risk that was being incurred at the highest levels of American finance. Vision has not exactly been Mr. Bernanke’s forte, yet, looking forward, he claims that the Fed will know precisely when to begin to dismantle its Frankenstein-like creation. He makes it sound as simple as opening a new app on an iPhone.
But the more likely scenario is that the costs and consequences of the economy’s withdrawal from this Fed-led morphine-like addiction that dulled the realities of economic pain will be staggering. When interest rates spike, liquidity is withdrawn and inflation surges to new heights, and the economy again begins to falter from its so-called cure, Mr. Bernanke will become the least popular man in America, just as the Woody Allen character Leonard Zelig eventually lost his capacity to spellbind and incurred the wrath of everyone around him instead.
Larry Summers, long thought to be President Obama’s choice as Fed chair, saw what is looming ahead. That, more than anything, is why Mr. Bernanke gets to keep his job.
Our previous observations and misgivings about Mr. Bernanke and the Fed can be viewed here.
Bank of America’s settlement shows that it’s time to look at the way the SEC allows companies just to pay when they break the rules. It is part of the culture that created the financial crisis of recent months.
An interesting development is occurring in a federal courtroom in Manhattan. U.S. District Judge Jed Rakoff is departing from what most judges do when it comes to SEC settlements: he is actually asking questions about the deal struck between the SEC and Bank of America. The case involved the Bank’s failure to disclose material information to shareholders about the Merrill Lynch bonuses and expected losses. The Bank knew more than it previously admitted, according to the SEC. For its part, BofA does not admit any wrongdoing, but it will pay the SEC some $33 million to settle the regulator’s charges. Would that be $33 million in TARP funds, aka public money?
The fact is that Bank of America’s deceit here was a disgrace. It was very expensive to investors, to taxpayers and to public confidence in the marketplace at a time when it is already in short supply. The size of the settlement falls insultingly short of the magnitude of the offense. And how exactly did the SEC conclude that BofA’s investors, whom it contends were misled in the first place and suffered huge losses at the hands of its management, should now have the privilege of paying millions more on top because of management’s deception?
Perhaps these are some of the factors prompting the judge’s heightened scrutiny. As he told lawyers for both the SEC and BofA:
I would be less than candid if I didn’t express my continued misgivings about this settlement at this stage. When this settlement first came to me, it seemed to me to be lacking, for lack of a better word, in transparency. I did not know much about the facts from the complaint. I did not know much, or really anything, about the basis for the settlement.
The settlement process between the SEC and securities issuers is part of the old way of doing business involving weak oversight and overly permissive regulation that helped to create the recent market debacle. Far from spurring accountability and transparency, which is generally regarded as a necessary part of financial reform, it allows companies to pay money out of shareholders’ pockets and evade any larger sense of responsibility for what they have done. In this charade, management knows it can try to get away with as much as possible and, if caught, has only to come up with a few million, which becomes another business expense. It is an easy way of creating the impression that the SEC is making progress toward reform and enforcement when it is nothing more than a mere slap on the wrist that perpetuates the culture of always skating close to the edge of the law. That is a culture that needs to change dramatically if the lessons from the market’s meltdown and credit collapse mean anything.
If any greater reminder were needed, another recent SEC settlement involved one of the most storied names in American capitalism: General Electric. That company paid $50 million to settle an SEC civil suit over alleged improprieties in GE’s accounting. GE says it did nothing wrong but apparently just had an extra $50 million in shareholder funds kicking around and decided to throw it at the SEC to keep them happy.
One might ask the SEC where the so-called renewed commitment to principles of financial responsibility is in all of this? The approach to enforcement seen in these examples does a disservice to investors and to taxpayers, both of whom deserve more than what amounts to a pantomime of regulatory gestures and corporate nods. When you have some of America’s most capitalized and prominent institutions falling short and misleading even in the wake of the most costly financial breakdowns in generations, more than just the formalities need to be observed. Thankfully, there is a judge who appreciates that notion and is, at least for now, standing up for both taxpayers and shareholders when no once else bothered to do so.
Seven years for a high profile corporate fraud may not seem like much compared with the sentences handed out in the United States (see Jeffrey Skilling, Bernie Madoff et al.), but it is an eternity for Canada. The country that produced Conrad Black and Garth Drabinsky has become notorious for its light touch when it comes to dealing with boardroom felons. But something, perhaps that very fact, appeared to prompt Judge Mary Lou Benotto to take a different approach and hand out a sentence today that was toward the higher end of what was expected – including on these pages. It is even more than the 76 months Conrad Black, Mr. Drabinsky’s good friend and former Livent board member, got for his corporate fraud adventure.
The seven years that elapsed between charges being laid against Mr. Drabinsky (2002) and his sentencing (2009) shows that Canadian justice can move painfully slowly. But today also demonstrates that, in the end, reasonable justice – not the Bernie Madoff-type American overkill or the wet noodle approach so often handed out by Canada’s top securities regulator – can prevail and the time can be set to fit the crime. Even for the rich and famous.
We had some harsh things to say about some of the wording in the judge’s verdict and the slow approach taken in the sentencing process. But now it appears that Madame Justice Benotto has discharged her duties with fairness and with firmness. The security of Canada’s capital markets at home and their reputation abroad are better for her efforts.
