The real fault for Maxwell’s undiscovered fraud belongs to the policemen employed in the Serious Fraud Office, to the civil servants, especially in IMRO and the DTI, who are empowered to supervise Britain’s trusts and corporations, and to the accountants at Coopers and Lybrand who were his companies’ auditors. As with most of Britain’s financial scandals, those arrogant, idle and ignorant bureaucrats, having failed in their duties, were not embarrassed nor dismissed, because they were protected by self-imposed anonymity. It was their good fortune that many blamed Britain’s libel laws for the failure to expose Maxwell’s fraud. But that was and remains too easy. Maxwell prospered because hundreds of otherwise intelligent people wilfully suspended any moral judgment and succumbed to their avarice and self-interest. To suggest that much will be learned from Maxwell’s story is to ignore past experience, but his story is an extraordinary fable, not least because only now can one read the final verdict.
Robert Maxwell had hit rock bottom when I first met him in spring 1973. Damned by government inspectors as a liar and fraudster, he had lost his seat as a Labour MP, had been ejected from Pergamon Press, his lucrative scientific publishing business, and had been cast into the wilderness as a pariah by the City and Wall Street. Few public figures had been so humiliatingly mocked as Captain Bob, otherwise known as the Bouncing Czech. ‘I wonder if I can help you?’ I said to Maxwell as we sat in his makeshift office in Headington Hill Hall, his vast Oxford home acquired for a peppercorn rent from the local council. ‘What do you have in mind?’ growled the man famed for his girth, intimidation and brazenness.
As a twenty-seven-year-old BBC TV producer, I had been tasked to film a fifty-minute documentary about the rise and fall of Britain’s most infamous tycoon, politician and multi-millionaire. ‘Well,’ I replied to the wartime refugee who had been awarded the Military Cross by Field Marshal Montgomery for charging a machine-gun post in Germany in 1945. ‘I wanted to make a film about your remarkable life and achievements. It might help your resurrection.’ As the fifty-year-old pondered the offer, I threw in that my father was also a Czech refugee. That connection sealed our fate. ‘Done,’ he said, and committed himself for the next six weeks to share his life with me and Max Hastings, the reporter.
As we trawled through Maxwell’s astonishing life – the peasant boy who escaped the Holocaust, established his fortune as a black-marketeer and thief while serving as a British army officer in post-war Berlin and, while working for both British and Russian intelligence, became a rich publisher and politician – we encountered an obstacle. ‘Mr Maxwell,’ I said, ‘in the interests of fairness and objectivity, I need to find someone who will say something positive about you. I’ve found lots of your critics but no supporters. Can you suggest someone?’
‘I understand,’ he replied without surprise. ‘Let me think.’
Eventually, Maxwell proposed his former parliamentary agent. ‘I don’t know why you expect me to say anything good about Bob,’ the hapless agent responded.
Universally loathed as a crook, Maxwell unsurprisingly hated the finished film, which portrayed him as the megalomaniac Citizen Kane. His attempt to stop it being broadcast by bribing a BBC employee to steal the soundtrack from the Lime Grove editing suite during the night before transmission failed because fortunately a duplicate soundtrack was stored elsewhere.
Maxwell’s many enemies loved the film and, not surprisingly, our relationship was abruptly terminated. Maxwell appeared destined to be forgotten. Except that fifteen years later, in 1988, his resurrection was complete.
Like Lazarus, the Bouncing Czech had risen from the ashes. Maxwell had not only recovered Pergamon Press, but had created a global media empire which rivalled Rupert Murdoch’s. Once again enjoying fame and fortune, he was regularly photographed with all the world’s leaders – including Margaret Thatcher, Ronald Reagan and Mikhail Gorbachev – brokering deals, dispensing advice and establishing himself as an unchallenged billionaire. True to his habits over the previous forty-three years, the arch deceiver was once again looking with contempt at the deceived. That was the moment to write his biography. The first to be published.
At the time, I could not imagine the profound influence Maxwell would have on my life. Until then, despite his frequent use of libel writs and compliant judges to suppress the truth about himself, the pattern of his lies, frauds and lifestyle had been touched upon in newspapers, especially by the Sunday Times. But no one had established his true venality, and Maxwell intended to preserve that protective secrecy. The publication of Maxwell the Outsider in 1988 was marked by eleven libel writs issued by Maxwell’s lawyers to prevent the book’s sale. After it briefly hit number one, Britain’s booksellers withdrew the book rather than face Maxwell in court. Yet by then, many had read my prediction that his media empire would crash three years later.
On 5 November 1991, while sailing in the Mediterranean, Maxwell had a heart attack and fell dead into the sea. Within days, his empire was crumbling. Dishonestly and secretly, he had plundered the Daily Mirror’s pension fund to support his failing businesses and many of the world’s most famous banks were exposed as his co-conspirators. In total, about £2 billion was missing. Amid widespread anger, not least from thousands of innocent ex-employees whose pensions had been looted by Maxwell, the biography was republished with a major addition about his frauds.
Internationally, Maxwell became the archetype of a criminal tycoon. Britain demanded the prosecution of Kevin and Ian Maxwell, his two sons, who had been intimately involved in the management of his empire, especially the unauthorized use of the pension fund shares to raise loans. This book tells the astonishing story of Maxwell’s furtive activities during the last year of his life and the brothers’ trial.
The brothers’ acquittal in early 1996 sparked outrage. Although Kevin had admitted during his trial that he had lied to bankers and others, he would suffer no retribution for his admitted dishonesty. Instead of being convicted for orchestrating a cunning plot to defraud bankers, shareholders and pensioners to support his father’s fantastic dream of bestriding the world as a media colossus, Kevin successfully presented himself as a victim of his father’s tyranny. Along with his brother, he benefited from the lacklustre intellect of Britain’s law enforcers. Thanks to their incompetence, no one was found guilty for the theft of £2 billion, at the time Britain’s biggest fraud. Maxwell’s victims, the pensioners of his corporations, were bewildered by the failure of Britain’s judicial system.
Scandalously, after Kevin Maxwell’s acquittal, Mr Justice Buckley ruled that he should not face a second trial, for the theft of Berlitz shares worth £112 million from Macmillan Inc, a publicly owned company. There was no ‘public interest’, declared the judge, to launch the new prosecution. Buckley ignored Mr Justice Millet’s judgment about the same circumstances, given during a long civil trial, that Kevin was involved ‘in dishonesty’ and a ‘fraud’ regarding the disposal of the Berlitz shares.
Empowered by his acquittal and Buckley’s ruling, Kevin Maxwell now insists that his father too was innocent of any crime. Ever fewer these days recall the circumstances with sufficient clarity to prove convincingly the opposite. They will not be helped by a government investigation conducted by an accountant and a lawyer employed by the Department of Trade and Industry who finally reported on the saga in 2001, ten years after Maxwell’s death. The inspectors’ crowning achievement was their failure to name a single person involved in the frauds – lawyer, banker, accountant or Maxwell employee – who should be punished. Their salutary conclusion was that ‘high ethical and professional standards must always be put before commercial advantage’. The cover-up was complete. In his celestial banqueting chamber, enjoying his favourite Beluga caviar and Krug champagne, Robert Maxwell must still be chortling about his family’s victory over Britain’s justice system and over