These can't be happy times for Canada's best-known former newspaper proprietor. The U.S. Justice Department has bagged its biggest trophy yet. The two men who ran Enron Corp. are going to jail for a very long time, and the next target in prosecutors' sights is Conrad Black.
Mr. Black has good reason to curse Enron's name. Because of Enron, white-collar criminals are being pursued with more zeal than drug lords and the mob. They're going to the same jails, too. No more Club Fed.
The sentences are harsh -- 25 years for WorldCom's Bernie Ebbers, 15 and 20 years respectively for the Adelphia cable guys, 81/3 to 25 years each for the rogues at Tyco International.
All these men have found out the hard way that U.S. prosecutors are more cutthroat than anyone they ever met in the business world. They'll sweat you till you beg for mercy. They'll hound your friends and wives. They'll squeeze your former partners until they beg to rat you out. And when the judge sends you away, they'll hang your mug shot on their trophy wall.
This time, it took a mere six days for a Texas jury to deliver more than two dozen guilty verdicts against former Enron chairman Ken Lay and onetime CEO Jeffrey Skilling. "Prosecutors have tasted the red meat," one former federal prosecutor told The Wall Street Journal.
They've also perfected the art of the kill. This time, they didn't bother deluging the jury with volumes of arcane accounting data. They turned Enron into a trial of character. Were these guys playing on the level, or were they not? Were they honest at all times, or not?
The prosecution didn't have to show that Mr. Lay and Mr. Skilling masterminded a fraud. They didn't have to show criminal intent. All they had to do was convince the jury that these men were not always completely forthcoming about the pickle the company was in. The defence, for its part, said Enron was brought down by vindictive journalism and evil speculators. "This is not a case of 'hear no evil, see no evil,' " Mr. Skilling's lead lawyer told the jury. "This is a case of 'there was no evil.' "
But the prosecution persuaded several highly placed Enron insiders to testify otherwise. One was former chief financial officer Andrew Fastow, whose co-operation they gained by leaning on his wife, Lea. They nailed her on a minor charge of tax evasion, then threatened to temporarily orphan the Fastow children by sending both their parents to jail at the same time. They also worked their persuasive charm on former treasurer Ben Glisan, who had kept detailed notes of key meetings. He saw the light after being detained for 11 days in solitary and then serving time with certain cellmates who, he said, made him fear for his
People figured that Ken Lay, Enron's aw-shucks, Bible-toting founder, would win the jury over with his folksy charm. Uh-uh. On the stand, he demolished himself. He even picked fights with his own lawyer. By the end, his reputation as a mild-mannered good guy was in shreds.
Like Mr. Lay, Mr. Black appears supremely confident that his day in court will vindicate him. "I would not be so sure about the fall of the titan," he wrote in an e-mail to my colleague Lawrence Martin a few months ago. "I will win this case and too many people are over-invested in the theory of my permanent downfall." Unfortunately, he lacks even a semblance of Mr. Lay's folksy charm. Will a Chicago jury take to him? What's your guess?
Mr. Black, too, intends to mount a "there was no evil" defence. He insists that he "did not receive a cent that was not approved . . . and publicly disclosed" or "that was disproportionate to the huge gains that were generated" by him and his management team." Unfortunately, he, too, has someone who has been persuaded to co-operate with the prosecution -- David Radler, who will be allowed to do his time in kinder, gentler Canada in exchange for services rendered.
It would be wrong, of course, to make much of these parallels. Mr. Black has yet to have his day in court and, in the larger scheme of things, he's just a pipsqueak. The Enron debacle destroyed billions of dollars in market value and thousands of jobs. Mr. Black's alleged fraud amounts to a measly $80-million -- hardly enough to make an ambitious prosecutor get out of bed.
Yet, with the U.S. justice system in a lynching mood, even the most blameless tycoon might be pondering his options. I hear Cuba's nice. The winters are warm and the cigars are great. There's free health care. And the Americans can't extradite you.