The report said Perle "breached his fiduciary duties" as a member of the board's executive committee, signing documents without evaluating or, sometimes, reading them, including those that allowed Black and Radler to evade audit committee scrutiny. Perle received more than $3 million in bonuses and hundreds of thousands of dollars more in compensation from a Hollinger subsidiary that invested in new media companies during the dot-com boom. The report said Hollinger International put $63.6 million into 11 companies Perle recommended and lost nearly $50 million. "Perle was a faithless fiduciary . . . and . . . should not be allowed to retain any of his Hollinger compensation," the report said.
Perle did not return a call to his office and e-mails asking for comment yesterday. He said in an interview in May that any suggestion "that actions or decisions taken by me involved a quid pro quo for compensation I received . . . is absolutely false."
_____Related Coverage_____
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Key Findings (The Washington Post, Sep 1, 2004)
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The report said Black and others diverted Hollinger money through Ravelston, which charged management fees when Hollinger sold properties. The audit committee, for example, approved $52 million for Ravelston when Hollinger completed its sale of Canada's National Post newspaper to CanWest Global Communications Corp. in 2001.
Members of the company's audit committee either didn't know or didn't care what Black and Radler were doing, probably because they were too close to Black, the report said. "Black named every member of the board, and the board's membership was largely composed of individuals with whom Black had longstanding social, business or political ties," the report said. "The board Black selected functioned more like a social club or public policy association than as the board of a major corporation, enjoying extremely short meetings followed by a good lunch and discussion of world affairs."
Black said the board's audit committee signed off on his decisions. The report said the audit committee should have pushed Black and Radler for more information.
Laura Jereski, an analyst with minority shareholder Tweedy, Browne Co., which spurred the creation of the special committee, said yesterday's report is "a step in the right direction."
The report is inconclusive about the directors, she said, as it withholds its opinion on how much blame they should receive for the actions of Black and others. "So much money left this company," she said. "The special committee is fully empowered to seek all remedies. We just want our money back."
The report contains e-mails from Black to other company officials about Perle, whom Black called a "trimmer and a sharper" who was profiting from Hollinger's name in establishing his own venture fund.
"I have been exposed to Richard's full repertoire of histrionics, cajolery, and utilization of fine print," Black wrote. "He hasn't been disingenuous exactly, but I understand how he finessed the Russians out of deployed missiles in exchange for non-eventual-deployment of half the number of missiles of unproven design." Perle was an assistant secretary of defense in the Reagan administration.
The report also contains some unexpected humor. When detailing the "Happy Birthday, Barbara" dinner party that Black threw for his wife at New York's La Grenouille restaurant ($42,870), the authors noted: "At least Black's choice of venue for his wife's birthday was less expensive than Dennis Kozlowski's party for his wife on Sardinia that was charged in part to Tyco."
