In the weeks before the trial was due to begin in Cleveland, Bob Anderson’s lawyers were publicly vilifying Black, with wild allegations – which he robustly denied – that he was a criminal, a racketeer and more besides. Over four days of cross-examination in a packed court in early May 1982, he defiantly denied his accusers’ explanation of all the events. At the end of his testimony he returned to Toronto convinced that Judge John Manos would accept his interpretation. Denying the truth and rewriting history had been a tool of the world’s greatest leaders – dictators and democrats alike. To survive and succeed, Black adopted their doctrine.
On 13 May Black was entertaining Toronto’s establishment at Hollinger’s annual dinner. Judge Manos’s judgement was still awaited. In the middle of the evening a messenger whispered to Black that Canadian police had started a criminal investigation of himself and his lawyers for conspiring to defraud Argus’s shareholders. Black knew precisely what had aroused police suspicion: Norcen’s inaccurate offer on 16 October 1980 to buy back its own shares. The circular to shareholders, signed by Black, stated that he could not envisage any new circumstances which could influence the share price. At that precise moment, he had been planning his bid for Hanna. Issuing misinformation could be a criminal offence. By the end of the dinner Black had formulated his defence. He had become, he would claim, the target of a conspiracy between his rivals, Canadian politicians and the police. He would denigrate the investigation as an ‘Orwellian drama’ and ‘a charade’, because the legal case was ‘too fatuous and preposterous’ to merit any discussion.30 Finally, he would castigate the familiar motives of his critics: the police investigation, he would say, reflected ‘the destructive complex of envy at its most ignorant and visceral’; his enemies were ‘manipulating’ the system by ‘a smear job’. Creating an aura of aloofness, he walked from the dinner telling those enquiring about his fate, ‘There is no evidence. There is absolutely nothing.’ His forceful indignation was intended to suffocate doubters and to confirm his admirers in their belief of his innocence. His last word, he persuaded himself, had silenced his questioners.
Unlike in America, Black personally knew those involved in the investigations in Toronto, and understood the regulators’ frailties. ‘I’ll talk to the Attorney General,’ he announced. Just hours after the dinner he was sitting in the office of Roy McMurtry, Ontario’s Attorney General. The politician met Black without any officials, even those directing the investigation. In his quiet, mellifluous manner, Black cast blame on a range of people, including even the future Prime Minister Brian Mulroney, at that time a rising politician in Ottawa and a director of Hanna. ‘The powder trail from this trumped-up charade of an investigation leads straight to Brian’s door,’ Black told the Attorney General.31 ‘He was far enough along in the chain that generated the Norcen investigation that his fingerprints wouldn’t be on the knife.’32 In his quiet tirade, Black made a series of allegations against politicians, law officers and the police – which they in turn would describe as figments of his fertile imagination. Over the next days, McMurtry and the police resisted Black’s pressure to stop the investigation.
The reality check was Judge Manos’s decision. On 11 June 1982 he found against Black, declaring that Norcen had committed ‘manipulative violations’. ‘[Black’s] construction of the record,’ declared the judge, ‘is strained and unpersuasive.’ The evidence, he continued, ‘established conclusively’ that the take-over had been contemplated at the board meeting on 9 September 1981, ‘if not earlier’. Black was tarred as unreliable. Inevitably, he was terrified. There could be severe repercussions in Canada, including a photograph of him being arrested in handcuffs. He regularly called his lawyer Peter Atkinson to ask for reassurance. Hal Jackman had no doubt that Black was the architect of his own misfortune. ‘Conrad’s a poseur,’ he sighed. ‘He’s always pushing the envelope to get away with it. Pushing beyond reasonable bounds.’33 Black’s terror was concealed from public view. To journalists he coolly returned Jackman’s criticism, characteristically describing him as drunkenly playing war games in his library. ‘Not an easy partner,’ said Black, with the air of reluctant wisdom. While Jackman posed as a great businessman, continued Black, he had sold his Ravelston shares ‘risibly cheap’.34
The civil judgement in Cleveland threatened to spiral into a criminal prosecution. The SEC charged Black with having ‘made untrue statements of material facts’ to both Hanna and the SEC, and to having ‘engaged in fraudulent, deceptive and manipulative acts and practices’. Black was on the edge. To prevent a prosecution he agreed with the SEC to formally sign a ‘consent decree’, promising to abide by American laws in the future. The process required no admission of wrongdoing by Black, but there was a sting: if he broke American laws again, the SEC could reactivate the criminal prosecution.35
Once it was agreed and signed, Black had no intention of allowing the verdict to remain unchallenged. Those who asked Black about the saga were regaled by tales of his victory as a witness against Anderson’s lawyers. Later, going further into fantasy, he described in his autobiography how, at the end of his testimony, Judge Manos had invited him into his chambers and gushed, ‘In twenty years as a judge, you are the finest witness I’ve ever had in my court. Whatever my verdict, from what I’ve seen this week, it won’t reflect unfavourably on you as a witness.’36 Not surprisingly, Manos had no recollection of such a bizarre encounter, but seeing the story in print convinced Black that his critics had been silenced.
The settlement in America was a relief. In Canada, however, the process continued. The investigators, Black knew, were considering charges, and were determined to send him to prison.37 Assiduously, he began working among Toronto’s establishment to terminate the embarrassment. He prided himself on smooth-talking the regulators into accepting that he was blameless, and shoving newspaper critics aside with the brash, self-confident quip: ‘These people are demagogues of the marketplace without a stake in anything.’38 But his oratory was unexpectedly ineffective.
Black had become a target of hate among a section of Toronto society. The ‘Black Factor’ mentioned by a critical analyst was cited as evidence that Black was merely a manipulator of shares, rather than a master of management.39 Bankers distrusted his restructuring of the share ownership of his companies, which gave him control without a majority of shares; some institutions questioned whether he had any motives other than self-enrichment, which he barely denied; antagonistic politicians were suspicious of his assumption of special influence among power-brokers; some journalists suspected his assertion of his own special position; others criticised his complete lack of managerial experience, including at the Sherbrooke Record, which was actually run by Radler; and journalists repeated the government’s announcement that the police investigation was ‘ongoing’. In reply, Black categorised some of his critics as the