Last week, Conrad Black launched a $1.25-million libel lawsuit against me, Random House of Canada and its editors over four sentences in my book “Thieves of Bay Street” that discuss his case. You can see the National Post article here about the suit:
While I won’t argue the merits of the suit on this blog at this time, I do want to remark on how his action speaks volumes about how the Canadian business elite enjoys luxuries the rest of us cannot avail ourselves of.
The thrust of my book is that if you’re rich you can get away with investment fraud because the Canadian establishment has no interest in prosecuting their own. This reality applies to the American establishment too, where the lords of Wall Street who drove the global economy into the ditch remain unprosecuted to this day.
In Canada, though, where our wealthy form a much smaller and tighter cabal, their odds of getting fined, prosecuted and jailed are even more remote. In Ontario, for example, the Ontario Securities Commission (OSC) prosecutes investment fraud at a rate of 10 times less than the SEC – which is saying a lot given how godawful the SEC’s track record is for pursuing securities violations.
The reason I wrote about Black was that I felt his case highlighted the kid gloves approach Canada’s corporate and regulatory elites take towards white collar and economic crime. Long before American prosecutors or regulators got wind of problems at Hollinger, the OSC was warned by a former member of one of Black’s corporate boards, as well as one of Hollinger’s former publishers, about potential improprieties committed by its top executives, including Black. Yet the Commission ignored these warnings and instead stood aside and watched while the US Attorney General’s Office went after the executives. Toronto securities lawyer Wesley Voorheis, who took over running Hollinger Inc. after Black was forced out, also urged the RCMP to investigate Black. The Mounties refused.
In 2005, the OSC laid a raft of allegations against Black and other Hollinger top executives over breaches of securities laws. All of the hearings into those allegations were adjourned and the case has gone dormant for at least three years.
In 2001, Black threw away his Canadian citizenship in order to sit in the antiquated and irrelevant House of Lords in Britain. And yet, as soon as he was released from prison, the Tory government immediately extended him permission to return to live in Canada (do you think if Black were a poor man with a criminal record and no Canadian citizenship the Tories would have let him set foot on Canadian soil?). Black is now running a very public PR campaign – including lengthy primetime interviews on CBC and CTV – to rehabilitate his image and, naturally, get his citizenship back. He claims he is an innocent man (despite his long history of run-ins with the justice system going back to the early ‘80s).
You can be sure that he will likely succeed in this endeavor. After all, Canada is rather banana republic in that respect: We are content to allow our rich run amok and we do nothing to stop them.
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- Glass-House Mortgages (March 21st, 2013)
- The Right Response to “No Job Is A Bad Job” (August 17th, 2012)
- Canada’s Economic Problem is NOT High Wages (August 16th, 2012)