Did Iseman and McCain Enable Conrad Black to Commit Fraud with CanWest?

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On July 31, 2000, Alcalde & Fay–and their lobbyist Vicki Iseman–terminated their lobbying activities for CanWest, a big Canadian media company. That day, CanWest had achieved the goal Alcalde & Fay had been assisting with: the acquisition of much of Conrad Black’s media empire in Canada.

Iseman and her colleagues had been lobbying the FCC, the House of Representatives, and the Senate (including John McCain, with whom McCain’s advisors believed Iseman had an inappropriate relationship at the time) to win approval for the foreign purchase of American broadcast companies–that is, Conrad Black’s properties, which were headquartered in Chicago.

Iseman’s role in the deal is significant for a couple of reasons. First, the deal greatly contributed to the consolidation of media in Canada:

In the largest media deal in Canadian history, CanWest Global Communications, a company that started 20 years ago with a North Dakota television station, is to pay $2.36 billion for dominant dailies in 8 of Canada’s 10 provinces. Mr. Black is to gain a seat on the CanWest board and is to become the second-largest shareholder, after the family of the company founder, Israel H. Asper.

”The borders are gone, we have to grow,” Mr. Asper, Global’s chairman, told a news conference in Toronto today, comparing his acquisition to Tribune Media’s recent purchase of The Los Angeles Times. ”We don’t intend to be one of the corpses lying beside the information highway.”

Mr. Black said in a statement that his company, Hollinger International, ”believes this intimate association with a highly successful telecaster built by an entrepreneurial spirit compatible with Hollinger is the best possible assurance of the strength of the newspaper franchises.”

Like Conrad Black before them, the family running CanWest exerts a great deal of editorial control–going so far as to distribute corporate editorials to be run in all their properties.

CanWest set off the media furor in December [2001, a year after the purchase] with its a decision to require all of its daily newspapers to run corporate editorials produced in its Winnipeg head office. Initially, the company sent out one editorial weekly, but said this would increase to three times a week. The company also said locally-written material should not contradict the party line handed down in corporate editorials. Ownership and management have clashed with journalists and columnists who’ve cringed under the new controls.

More interesting still, the deal lay at the core of the charges (and conviction) of Conrad Black for fraud. CanWest paid $60 million to Black and other Hollinger executives that they hid as non-compete agreements.

Canwest purchased the newspapers for $3.5-billion in a deal that also included $80-million in non-compete payments. Black, Atkinson and Boultbee pocketed $60-million in fees from the sale – money the U.S. prosecutors are alleging should have gone to Hollinger International.

Now, there is absolutely no reason to believe that McCain and Iseman had anything to do with the fraudulent aspect of this deal–or that they even knew about it. Many of Hollinger’s board members testified they had no clue about the fraud, so there’s almost no way CanWest’s lobbyist knew about it. Iseman simply helped make sure the deal got the regulatory approval it needed in the US.

As with my post on the ties between Stolen Honor and Iseman’s lobbying of McCain, I’m not so interested in the deals themselves–I’m interested in the folks bankrolling the Iseman-McCain relationship. And as with the Sinclair and the Paxson lobbying, what Iseman was working to accomplish was the consolidation–and with it, the politicization–of the media. There’s no evidence the people behind the deals are the same. But the ultimate goal of their lobbying does appear to be the same.

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49 replies
    • chrisc says:

      Computer Sciences Corp might be interesting too.
      They have been raking in a lot of homeland security contracts.
      Some of their major projects for 2007

      CSC is on the Verizon Business team that won GSA’s Networx Universal contract. CSC is providing Verizon with network design support and engineering services, managed-tiered security services and anti-virus managed services. The company is also providing systems engineering and integration support to the Defense Department’s Missile Defense Agency under a $151 million contract.

      • emptywheel says:

        Yeah, they’re about 5th on the list of lobbying relationships to look into.

        Thing is, we’re not sure who she’s lobbying now. The Univision merger, for example (which fits the pattern here of consolidating media in conservative hands) was approved with mixed Dem support–Reid was one of the people supporting it.

        We know that for the lobbying in 1999-2000, she said McCain was her guy. We don’t know who her guy is at this point.

        • bmaz says:

          Okay, long as everybody is letting fly, I want to toss some tin foil in the pot too. Univision. Isn’t that out of Florida and have major ties to Jeb?

  1. BlueStateRedHead says:

    Breaking NYT 10 min. ago. more details on my comment at fdl. pristina embassy burning. another Bush war coming.

    shit. back to lurking.

    • earlofhuntingdon says:

      Unless Iseman casts no shadow and can’t see her image in a mirror, I don’t think Dick would find her charms persuasive or on par with his own.

  2. earlofhuntingdon says:

    Do we know whether Iseman had a hand in speeding approvals for the series of major telecoms mergers (eg, Sprint/Nextel) that were quickly approved early in Bush’s second term?

    • emptywheel says:

      No sign of that and it isn’t her MO (one more reason to emphasize these are media companies, not telecom). Though some of McCain’s other lobbyist buddies were lobbynig for the big telecoms.

      • earlofhuntingdon says:

        Thanks for reminding me that the issue was media, not telecoms, consolidation.

        On that note, I would add to your point that media consolidation leads to politicization, that the worry isn’t about traditional mergers like the NYT buying the Boston Globe. It’s about the Clear Channels gobbling up stations and changing the face of American radio. And media conglomerates like the Tribune Company buying up and eviscerating or shutting down competing voices, like the LA Times, formerly one of America’s top newspapers and the only one west of the Rockies.

        He who owns the message, controls the message. Own the sole or dominant voice, and you own the cash and power that comes with it. The kinds of evil legitimate competition was meant to forestall.

  3. Ishmael says:

    EW – Agreed, Conrad Black needed no help to rip off shareholders, pension plans, widows, fellow students at Upper Canada College, he’s been doing it since he was 13. But you are right to focus on the connections between the right wing media elements here. The Asper family, Israel’s children especially, have been vehemently pro-Israel (not that there is anything wrong with that), and were involved in the bogus Star-of-David story floated in the Asper-owned Jerusalem Post. Conrad Black had mastered the art of providing “consulting” fees to the likes of George Will long before Armstrong Williams came along. Black also gave sinecures on Hollinger boards to Kissinger, Perle, and (I think) Margaret Thatcher. So it is not at all far-fetched to focus on the links between McCain, the neocons and the consolidation of media interests.

    • emptywheel says:

      Oh good–I was hoping one of our resident Canucks would come help me understand CanWest.

      Is it still true that they’re Labor supporters but also Likud supporters? And did they take the editorial line of the papers any further left, or did it remain solidly Black-like right?

      • Ishmael says:

        The Aspers, like the majority of the Canadian Jewish community, have been long-time supporters of the Liberal Party in Canada, but since patriarch Israel (Izzy to everyone) died, they have been tinging Tory, in concert with Stephen Harper’s attempts to win Jewish votes in Montreal and Toronto – yes, they are closet Likudniks, IMHO. There are times when Canada’s foreign policy under the Tories has been more pro-Israel than the US position (which is contrary to the traditional Canadian position at our international affairs dept.)

        • emptywheel says:

          So the Black to Asper sale still left the media in fundamentally pro-Likudnik hands, even while it may have suited Canada’s domestic politics better?

          The Likudnik think, btw, shows up on any piece that talks about politics. As if the politics in Israel are more important than here in N America.

          • Ishmael says:

            Yep. Conrad Black picked fights with the Liberals, esp. Jean Chretien, all the time, but I think the Aspers are more Likudnik than Black.

      • skdadl says:

        The Aspers are long-time Liberals, the Liberal Party being our centrist party, with both right and (vaguely) leftish wings, and the Aspers are definitely not on the leftish.

        The main change in editorial policy at the National Post, which was Conrad’s dream of a neo-con national paper for a while, is that they have been forced to become more tabloid, more extreme and silly, as they have lost circulation. Very briefly, Black gave that paper its head (by overspending, of course, because he was hoping to drive the Globe and Mail under, which was always a kind of silly project), and it was fun to read (in parts, especially the entertainment/culture sections). But that was long ago, and pre-9/11.

        Ishmael is right: since 9/11, our foreign policy has been even more closed to debate about uncritical support for what EW is calling Likudnik politics than has yours, and that has been true of senior figures in the Liberal Party, not just the Tories. Ishmael, I’m thinking of Irwin Cotler, Michael Ignatieff, Bob Rae.

  4. skdadl says:

    AFAIK, if his latest emergency appeal fails, Conrad Black goes to jail on 3 March. In the face of what the Aspers can now do, I know it’s a small thing, but all the same, and even though I know that we don’t normally do this at EW’s place, may I please be permitted a teensy squeak in gratitude to … Fitz?

  5. Leen says:

    Richard Perle’s business deal with Conrad Black were always of interest..
    The Curse of Black’s Perle
    http://www.slate.com/id/2106175/
    But alas, the Black-Perle marriage soured. Hollinger Digital, which got started in the late 1990s, was a disaster. “Of the forty-five investments the Digital executives made, only five have resulted in gains,” according to the report. By the end of 2003, the fund had lost $68 million on investments of $203 million, “yielding a total return of -33%.”

    Unchastened by the losses, Perle started his own private equity firm, Trireme Partners, which he founded in 2001 along with Gerald Hillman, a fellow member of the Pentagon’s Defense Policy Board. Perle tried to hit up Hollinger for a $25 million commitment, with $2.5 million up front. Black resisted, in part because Black, a world-class chiseler himself, felt he was getting chiseled by Perle. On Feb. 1, 2002, Black wrote a memo questioning Perle’s habit of submitting personal bills for reimbursement: “I have been consulted about your American Express account which has been sent to us for settlement. It varies from $1,000 to $6,000 per month and there is no substantiation of any of the items which include a great many restaurants, groceries and other matters.”

  6. chrisc says:

    I’m looking for clues in her personal political donations but I really didn’t find much.
    In 2007 Iseman gave $250 to Arlen Specter. No indication that she was with ALCALDE & FAY on that one.
    She has only one other contribution in the open secrets database.
    Now, there are pages and pages of contributions for Alcade & Fay- almost $100,000 for the 2006 cycle.

    Maybe she just wasn’t expected to donate monetarily.

  7. Leen says:

    “As Hilzenrath noted, the two met at (natch!) the Bilderberg Conference. Perle joined the Hollinger board in 1994 and quickly became part of Black’s inner circle, serving on the company’s executive committee. In the late 1990s, as the section of the report beginning on Page 339 shows, Perle got it into his head that Hollinger should form a unit to invest in Internet companies. And who better to run it than a former assistant secretary of defense?”

    http://www.slate.com/id/2106175/

  8. bmaz says:

    Uh oh helicopter in Afghanistan may be down with Hagel, Kerry and Biden on board….. Yikes. Says emergency landing, but in a helicopter that is not good at all…..

  9. earlofhuntingdon says:

    Afghanistan is one of the most dangerous places on the planet. I hope this reminds them that the convenience of traveling together and personal and national safety aren’t the same thing. This should also be a vicarious wake-up call for Obama and his inner circle.

  10. klynn says:

    Boston Globe says all saved and evacuated by convoy to Bagram Air Base and have continued on their travels to Turkey…

  11. brendanx says:

    I’ve always assumed McCain was the media darling not just for his ascerbic humor and accessibility, but because he got on the neocon bandwagon very early. He is certainly beholden to them.

  12. Rayne says:

    Jeebus crispix. You people just scared the crap out of me with this last topic. So busy that I haven’t checked the news.

    Where were the Sinclair-owned outlets as of 2004? I wonder if there was any physical pattern at all to the lobbying and location of clients’ businesses. Food for thought.

  13. JohnLopresti says:

    I worry McCain’s ladder to maverick clout has been comprised of the kind of cronyist bedfellowism bruited in these media related threads. Consider the skewed hype about Comcast recently which instantPundits are prosecuting as evidence IPvideo and liveStreamingRadio could generate a bytewise netBias to displace netNeutrality, a profiteering framework the current FCC might like to see occur on its watch, given a stronger 2009 Democratic party majority in the elective branches of the federal government likely would protect net neutrality and suppress BytewiseTaxation. The monopolists are trying to make a speciously extrapolated paradigm of Comcast, which itself has its own private history of unseemly capitalist wrestling arts which brought it to its present market dominant tier.

  14. earlofhuntingdon says:

    I note that Dick Cheney has a special interest in media matters. The FCC’s chairman, Kevin Martin, reportedly has close ties with Cheney and his wife is longtime Cheney aide, Cathy Martin (I believe she works for the Shrubster now), a role the public learned more about during the Libby trial.

    When young Kevin took over as FCC chairman from Colin Powell’s son a few years back, he froze all decision making for weeks. Even routine actions such as one or two-day filing extensions had to be approved by the chairman’s office. This was purportedly so that he could “get a handle” on his agency, even though he had been a commissioner, and before that, the commission’s top lawyer.

    It’s normal for a commissioner to change his or her top staff, revise procedures and adjust priorities, but this action seemed well outside the norm. Scuttlebutt explained it to Cheney – who is obsessed with controlling his bureaucrats – wanting to get a better handle on things. In any event, more matters went up to the chairman’s office and decisions took longer to come down. Pundits claimed this was owing to conflicts in Cheney’s schedule and his need to network with his media network.

    Apart from a series of major telecoms mergers, Martin has presided over a string of media consolidations. He recently held a nationwide dog ‘n pony show, in which he sought input about enhancing media consolidation. In hastily scheduled visits across the country, he repeatedly heard the case against consolidation. Needless to say, on returning to Washington, he put enhanced consolidation on the fast track.

    Nothing like a guy who listens to his constituency. And Kevin Martin is nothing like a guy who listens to his constituency.

  15. Rayne says:

    Paxson and Christian Network Inc. entered an agreement where Paxson could broadcast CNI content overnight. (http://www.secinfo.com/d17WEy.z2tw.htm) CNI = Total Living Network.

    So some of the lobbying was for faith-based initiatives and low-powered broadcast, as well as media consolidation. There also had to be a counterpart to St. John in the House on these fronts.

  16. MadDog says:

    Totally OT, but EW did have an interest in what Lockheed’s nefarious doings consists of:

    FBI awards Lockheed Martin $1B biometrics contract

    …The FBI said the new system will move beyond what it called a “dependency on a unimodal (fingerprints) biometric identifier” and incorporate multimodal biometrics such as iris and facial imaging. Indeed the deal is a major upgrade to the FBI’s Integrated Automated Fingerprint Identification System because it lets the agency more easily share anti-terrorism information with domestic and international partners and may include other identifiers, including palm prints, iris scans and facial recognition, an Associated Press story stated.

    It also will include data on known criminals and terrorists, as well as information on foreign visitors to the U.S. whose fingerprints and digital photographs were collected under a separate Department of Homeland Security program that monitors people entering the U.S. via air, land and sea, the AP said…

      • MadDog says:

        More surreal Lockheed stuff:

        Lockheed Martin Orincon and Authentica to Develop Solution to Mitigate Insider Threats within Intelligence Community

        Lockheed Martin Orincon, a diversified systems integration and information technology company, and Authentica, a leading provider of content security software for enterprise messaging and document sharing environments, today announced that the Advanced Research and Development Activity (ARDA) has contracted with them to protect the intelligence community from insider threats to information security.

        The companies will work together on a joint program, VOLTAIRE, a system that will provide next-generation protection against information attacks by insiders – specifically with respect to document access – by reasoning about insiders’ behavior…

        Leakers and Whistleblowers, look out!

        • earlofhuntingdon says:

          A Cheney whet dream written in software code. Next steps will likely iclude making versions available to the private sector. Corporate and state government whistleblowers had also better look out, not to mention every employee who fails to toe the line in thought as well as deed.

          “One small step for man, one giant leap for surveillance state Amerika.”

  17. earlofhuntingdon says:

    One goal is to aggregate personal identifiers (iris scans, DNA) with all data obtainable from published and private resources. This includes driving records, which many states sell, to financial records, military records, court documents. (See, also, today’s announcement that Google will now start “processing” personal medical data.) This includes analysis of the data, computing not just what you spend and where, but whether you travel, where you go, for how long and what you do. That is, what meaning can be inferred from the underlying data?

    The data will be kept permanently, allowing more intricate and refined searches to be done over time as more sophisticated analysis software is developed. The progression may be like moving from finding the tree rings aesthetically pleasing to being able to determine the tree’s age, growth rates and local weather and climate conditions (including chemical contaminants) throughout its life.

    We have had precious little debate about what’s being done and how it ought to be regulated and, most especially, what the parameters should be for public/private analysis and use of this data should be, and what rights the private citizen should have in connection with use and misuse.

    The Bush administration wants no rules binding the executive branch for any purpose. It doesn’t want its citizens to know what’s being done, much less to participate in the process or have enforceable rights concerning it. Civil society cannot survive that policy. What will we do about it?

    • kspena says:

      Assuming the gathering of info on individuals continues in some fashion, would having access to one’s own record at all times have a tempering effect?

      • prostratedragon says:

        Excuse me,
        On whom? What would one do with access if a good part of one’s objection would be to the data’s having been collected and fit into some kind of elephant’s portrait of one in the first place? Given most people’s already strained system capacity for wrestling with large institutions and bureaucracies, how could mere access be seen as a way to make the intrusion a wash relative to one’s privacy rights?

        I do not mean to dump on you or any poster, but my own system capacity in the face of the current trend to shift constitutional burdens that were meant to restrain government onto individual citizens has been running low of late.

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