FBI, U.S. ATTORNEY TARGET HOLLINGER (criminal probe takes scandal in new direction)

NY POST ^ | Dec 17, 2003 | TIM ARANGO and JOHN LEHMANN

[Liz]

The FBI and U.S. Attorney's office in Chicago have launched an investigation into alleged financial shenanigans at ousted newspaper baron Conrad Black's Hollinger International, sources told The Post.

The criminal probe takes the scandal in a new direction and raises the possibility that Black and his cohorts could eventually face criminal charges for their role in Hollinger's ongoing financial scandal.

[Liz]

Hollinger examines Perle investments
Financial Times | 11/12/2003 | Stephanie Kirchgaessner


Posted on 11/14/2003 2:04:55 PM PST by JohnGalt


Hollinger International is examining investments that were made by Richard Perle, a director on the publisher's board and prominent defense advisor, on behalf of the company.

The investigation is part of a wider internal probe at the publisher of the Daily Telegraph and Chicago Sun-Times into some of the company's corporate governance practices, including the payment of nearly $300m in management fees to Conrad Black, chief executive and chairman, and his deputies.

That probe, which is being lead by former Securities and Exchange Commission chairman Richard Breeden, is wide-ranging and involves close scrutiny of so-called "related-party transactions", or deals in which members of Hollinger's board or executives personally benefited from deals the publisher agreed with other companies.

One transaction that caught the attention of some Hollinger investors was a $2.5m investment earlier this year in Trireme Partners, a venture capital company in which Mr Perle, an independent director, is a managing partner.

Mr Perle has also played a prominent role in the late 1990's and early 2000 in directing investments in other companies through Hollinger Digital, Hollinger's investment arm.

Under review is a $14m investment the company made under Mr Perle's direction through Hillman Capital, a venture capital group controlled by Gerald Hillman - who has since become a partner at Trireme and is a member of the Defense Policy Board, as is Mr Perle.

The $14m investment contributed to a fund used by Hillman Capital to acquire - with another private equity group - more than 70 per cent of Cambridge Display Technology, a UK-based technology group that holds a patent in light-emitting polymers, in 1999.

Early investors in CDT included Lord Young, a former business adviser of Baroness Thatcher's.

Mr Perle has been criticised in the past over perceived conflicts of interest in his business dealings.

Mr Perle resigned as chairman of the Defense Policy Board earlier this year after he was criticised for having a $750,000 contract with Global Crossing, the bankrupt telecoms group. Global Crossing was at the time seeking to overcome Defense Department objections on its sale to Hutchison Whampoa, a Chinese-controlled company.

Paul Healy, head of investor relations at Hollinger, refused to comment. Mr Perle and Mr Hillman were unavailable for comment.

[Liz]

.......(Conrad) Black could be on the hook for criminal charges stemming from the Sarbanes-Oxley Act, which holds executives accountable for approving false financial statements......

[FreePaul]

...some $32 million in payments that were either not authorized or improperly disclosed.

Can anyone elaborate on what "improperly disclosed" means in this context?

[Grampa Dave]

Liz post your data re the FDR papers that Black paid for with company money as an example for FreePaul.