Perle has served on the boards of two Washington area technology companies headed by Ken Bajaj, including a stint on an audit committee that did not meet one year. Bajaj has served on an advisory board of a venture capital firm that Perle co-founded.
Familiarity is the norm when boards recruit directors, and it can be a good thing if "you have learned that this director was an aggressive, careful, monitoring director who asked probing questions on some other board and you want him to do the same on your board," said John C. Coffee Jr., a professor at Columbia Law School. But familiarity can be bad if it involves mutual back-scratching or if the director in question "is simply never going to find fault with someone who is one of his close friends," Coffee said.
Perle's Business Ventures: A look at Richard N. Perle's government and public policy-related jobs and how they relate to his business activities.
Perle's Path: Richard N. Perle has translated his Pentagon connections, first established when he served as an assistant defense secretary in the Reagan administration, into an array of corporate directorships and consulting arrangements.
"It is an all too common practice to find the same directors popping up on boards with each other over and over again," said Gregory P. Taxin, chief executive of Glass, Lewis & Co., which advises institutional shareholders on how to vote in board elections. "The world of directors is a very incestuous one."
"If you are good friends with other people on the board and you all go to board meetings together, it's far less likely that you will start an acrimonious and strong debate in the boardroom about issues large or small," Taxin said.
Perle said Taxin's concerns do not apply to the boards on which he has served. "I have never hesitated to debate" when it was warranted, he said. "I don't think that people would say I am a wallflower."
On the board of Hollinger, which publishes the Chicago Sun-Times and London's Daily Telegraph, among other newspapers, Perle joined a gathering of luminaries. Directors have included former secretary of state Henry A. Kissinger, former U.S. ambassador to Russia Robert S. Strauss, former Illinois governor James R. Thompson and former Sotheby's chairman A. Alfred Taubman, who remained on the board after he was convicted of antitrust violations.
For Black, Hollinger supported a lifestyle that included the use of corporate jets to fly to the Tahitian island Bora Bora and shuttle between houses around the world, the Hollinger lawsuit said. Black billed Hollinger for household staff such as chefs, butlers, chauffeurs, footmen and security personnel, the lawsuit said. Through an unusual system of annual management fees to a company owned by Black and Radler, Hollinger paid its top executives five to six times what competing companies paid for similar services, the suit said.
Black resigned as Hollinger chief executive in November and was removed as chairman in January. His holding company said in a recent statement that Hollinger's board members "were all extremely sophisticated professionals" and that the "vast majority" of matters the firm is challenging "were reviewed and approved by its independent directors." Black has sued several directors, alleging defamation.
During several hours of interviews for this article, Perle declined to answer most questions about Hollinger, citing pending litigation and the advice of counsel. Perle would not describe his relationship with Black, but confirmed that he once flew with Black on a company jet to the Middle East to attend a meeting with the crown prince of Jordan and to visit Perle's friend, Israeli Prime Minister Binyamin Netanyahu, in the mid-1990s.
By 1998 Perle was listed as chairman and chief executive of Hollinger Digital. He was one of three members of Hollinger International's executive committee, with Black and Radler.
As a member of the executive committee, Perle signed "unanimous written consent" forms authorizing management to negotiate terms of certain Hollinger newspaper sales, the documents show. For example, the Sept. 15, 2000, document authorized "the proper officers" of the company -- without naming them -- to "take all such actions" and negotiate "all terms . . . which in their sole judgment are necessary, proper or advisable" to carry out a $90 million transaction. The form expressly authorized the officers to negotiate a "noncompete agreement" without specifying all the details.
That noncompete agreement and others like it became devices for Black and Radler to divert millions of dollars to themselves, Hollinger alleged. Meanwhile, Black and Radler used such deals to acquire Hollinger newspapers at cut-rate prices, Hollinger alleged.
Perle was paid about $300,000 a year as head of Hollinger Digital, according to a Delaware suit by Hollinger shareholder Cardinal Value Equity Partners LP. That pay was in addition to his $3.1 million in bonuses, said a Hollinger source who would not agree to be identified because lawyers told company insiders not to speak to the press.
Hollinger Digital's "upside only" bonus arrangement was "virtually unheard of," the complaint said. The company paid $15.5 million in such bonuses, though the subsidiary's investments lost more than $65 million overall, it said. Perle said that, on balance, the investments for which he was responsible for were profitable. He said he urged the board to create Hollinger Digital because he envisioned the Internet transforming the newspaper business.