The Jury is Out: A Live Discussion
At 5 p.m. ET, I will be chatting with Alan Gold about the legal matters surrounding the trial. You can read the live conversation here. Our Business Brief correspondent Roger Martin will join us at 6 p.m. This will be a closed discussion, but readers are invited to comment on the final transcript.
Update: the transcript is now available.
Douglas Bell: Welcome to our inaugural Conrad Black trial live discussion. After three months, it’s safe to say that our readers have expressed the entire spectrum of opinion as regards Conrad Black et al. v. the United States of America. And yet, as the trial enters its final phase, we suspect there’s still much more to be thought and said. With that in mind, we welcome the esteemed jurist Alan Gold to answer a few questions, shed a little light and, most importantly, stimulate our ongoing conversation.
Douglas Bell: Given the complexity and breadth of the evidence, how long do you think the jury will be out? And, in a related matter, can the jury hang on some charges and convict or exonerate on others?
Alan D. Gold: American juries tend to be out longer than our juries though our juries are catching up. However in recent white collar cases in the US juries have come back remarkably quickly.
Alan D. Gold: Given the different areas covered by the charges different verdicts are not unlikely and a longer deliberation would be expected. A quick return will have both sides’ hearts beating fast though I think a quick return will favour the prosecution.
Alan D. Gold: The jury will probably be told to consider each charge separately. Different verdicts or disagreement on some charge or other is quite possible.
Douglas Bell: During summary arguments, all the defence lawyers bandied about the phrase “reasonable doubt.” What actually constitutes a reasonable doubt? And which, among the charges against Black et al., have met that threshold, if any?
Alan D. Gold: Reasonable doubt is undefinable. Our Supreme Court spent a lot of ink in a case called Lifchus stating that reasonable doubt cannot be defined, but only explained. They said:- the standard of proof beyond a reasonable doubt is inextricably intertwined with that principle fundamental to all criminal trials, the presumption of innocence- the burden of proof rests on the prosecution throughout the trial and never shifts to the accused- a reasonable doubt is not a doubt based upon sympathy or prejudice; rather, it is based upon reason and common sense- it is logically connected to the evidence or absence of evidence- it does not involve proof to an absolute certainty;- it is not proof beyond any doubt nor is it an imaginary or frivolous doubt;- and more is required than proof that the accused is probably guilty—a jury which concludes only that the accused is probably guilty must acquit.
On the other hand, certain references to the required standard of proof should be avoided. For example:- describing the term “reasonable doubt” as an ordinary expression which has no special meaning in the criminal law context; inviting jurors to apply to the task before them the same standard of proof that they apply to important, or even the most important, decisions in their own lives- equating proof “beyond a reasonable doubt” to proof “to a moral certainty”- qualifying the word “doubt” with adjectives other than “reasonable,” such as “serious,” “substantial” or “haunting,” which may mislead the jury; and- instructing jurors that they may convict if they are “sure” that the accused is guilty, before providing them with a proper definition as to the meaning of the words “beyond a reasonable doubt”
American law says things about reasonable doubt that are prohibited in our law.
Douglas Bell: At this stage does it help or hinder Black’s case that he is being tried along with the other three? I’m thinking particularly of Radler’s testimony, which Greenspan and Genson repudiate at every turn while Safer/Schacter claim the same testimony exonerates Kipnis/Atkinson.
Alan D. Gold: Inconsistency is never good. But it is hard to say how much it will matter here. Clearly the accused are in different positions. I would be surprised if the jury fails to differentiate the accused in their verdicts.
Douglas Bell: If there was one question you could ask Conrad Black—as a prosecuting and/or defence attorney—what would it be?
Alan D. Gold: As a prosecutor: What right did he feel he personally had to the money he took for the American non-competes? As a defence lawyer: What would he do differently? Which would give him a chance to be contrite, express regret at the lack of clarity. Of course he did not know the people around him for their own motives would try to make everything he did look sinister. He could also express regret that he was not able to continue to achieve such successful monetary return for the Hollinger shareholders.
Douglas Bell: I want to reiterate an earlier question. Which of the charges, if any, do you think the prosecution has managed to prove beyond a reasonable doubt?
Alan D. Gold: I’m sorry, but at a distance that’s a hard question to answer. Press reports try to be complete, but details in both questions and answers matter. I will only be able to answer that after I hear the verdicts! Sorry. P.S. The judge’s charge to the jury may contain clues as to what charges the judge thinks have been proved.
Douglas Bell: One of the complaints I heard from jurists around the court in Chicago was that Greenspan’s reading his summation from behind a lectern might not have gone over well with the jury because it afforded him little opportunity to “relate” with the jurors. Does that reflect a difference in style between U.S. and Canadian defence lawyers or is it Greenspan’s style specifically that isn’t going over well?
Alan D. Gold: Different lawyers, surprise, have different styles. Some read their addresses, some do not. Some read their cross-examinations, some do not. I was surprised to see that Ed Greenspan had read his jury address as he is an excellent speaker and quite adept at the appropriate ad lib or extemporaneous remark. Judges in the U.S. control much more closely the contents of what a lawyer can say to the jury, and it may be that it was an exercise of caution to ensure compliance with any rulings the judge made. I would be surprised if that was his usual style.
Alan D. Gold: In fairness, I suppose I should add that in a criminal trial there is really only one measure of success. If the client is acquitted, the lawyer is a brilliant genius and did everything to perfection. If the client is convicted, then everything the lawyer did was wrong.
Roger Martin: Roger Martin checking in for the discussion.
Douglas Bell: Picking up on your point about contrition, is one possible reason that Greenspan kept Black off the stand that, even if he were to express contrition, he couldn’t get it across to a jury? What other reasons might Greenspan have had for keeping him off?
Alan D. Gold: First, a bit of law. The decision whether or not to testify is that of the client, not the lawyer. It is one of the two or three fundamental decisions the client must make; all else is the lawyer’s responsibility. However, the lawyer is under a duty to advise the client, if need be in the strongest terms, of the advisability of a course of action. I have no doubt any reasonable lawyer, and even a few unreasonable ones, would have advised that client not to testify. First of all, they
felt many—if not all—of their points were made in cross-examination of prosecution witnesses. More important, that client had a very unsuccessful career as a witness, being roundly castigated in a previous court appearance or appearances. His public persona appeared to offer considerable grist for the cross-examiner’s mill to say the least. In those circumstances, the client testifies only as a last resort if the lawyer is sure the case is otherwise lost, and that does not appear to be our case. For someone who has never been cross-examined by a good to very good cross-examiner, it is easy to fail to appreciate how even brilliant minds (such as expert witnesses) can fail the cross-examination test.
Douglas Bell: During deliberations, the jury’s communications to the judge are discussed in open court. Are there things to look for in those communications that might indicate which way the jury is leaning?
Alan D. Gold: Next to the verdict, jury questions are the most exciting moments. From a question the lawyer can often know what the verdict will be. They are an insight into the jury room that is otherwise unattainable. If this jury returns with questions, that will most likely worry the prosecution and gladden the defence because it means the issues are not as simple as the prosecution would like to think. I will be happy to deconstruct the questions if and when they happen.
Douglas Bell: Joining us now is Roger Martin, the Dean of the Rotman School of Business at the University of Toronto. Welcome. Roger, on several occasions, you’ve been critical of the so-called corporate governance movement. You have suggested that shareholders need to take care that the companies in which they invest are managed by executives who hold themselves to a higher moral standard than the likes of Radler and Black. I wonder if you could suggest some practical benchmarks that investors might use to grade the moral performance of an executive?
Roger Martin: First I will admit that it is not easy and shareholders will need help. But I think if they ask for it, they will get help. What they need to do is analyze the track record of CEO behaviour with respect to aligning their own compensation with that of the performance of their company. Some of this data is tracked already—such as the Globe‘s annual analysis of CEO compensation compared to their company’s performance. However, this is a one year snapshot and that can be misleading. Shareholders need the emergence of a CEO rating service that follows the career of a CEO and assesses both the alignment of their compensation with company performance and the level of payoff for a given level of performance. Both pieces are important. On the first, it is important to know whether the CEO has historically been satisfied to take big compensation even if the company is doing badly. On the second, it is important to know how high the CEO’s payoff is for each positive increment of company performance. This can all be measured and rated both retrospectively and prospectively.
Now someone may argue, this isn’t a measure of CEO attitude/mentality but rather that of the compensation committee. I disagree. No CEO has to accept a goofy or excessive compensation structure and one that does is not one that shareholders should want. So I hold the CEO responsible.
If the shareholders had such a service, CEOs would need to establish a track record of having reasonable compensation in order to attract shareholders to their companies over time. And they would start doing things like refusing part of their compensation when it turns out to be excessive—all in hopes of building their reputation. CEOs like Bob Nardelli would have a hard time getting another CEO job because their track record of excessive compensation is so bad.
Douglas Bell: If you could ask Conrad Black one question regarding his business practices what would it be?
Roger Martin: When for him did “enough” change to “how much” with regard to his own compensation? This is a key differentiator among CEOs in my view. Some ask themselves the question: “What level of compensation is ENOUGH for me to have all the monetary goods that I would ever really need?” Others ask themselves: “If I really concentrated and focused on personal value extraction, HOW MUCH could I get?” Black stepped over that line at some point and eventually that got him into trouble.
Douglas Bell: Assuming there is a verdict either way what practical lessons—for good or ill—will corporate executives draw from Black et al. vs U.S. ?
Roger Martin: I hope it is a lesson in how important it is to ask yourself the enough/how much question. The minute you start asking yourself how much, you fall prey to showing complete disregard for the shareholders in service of ever increasing the how much. In due course, that will get you in trouble.
The same holds for shareholders by the way. If they keep asking the company how much can it raise its performance, they will eventually cause the company to stretch too far too fast and that will break the company.
So in a world in which it is easy to push to the extreme of how much, it is important to get enough—for executives that means a house, a cottage, retirement funds, college tuitions, a few toys; for shareholders a return at or above the cost of equity—and stick to that rather than fall into the abyss of how much.
Douglas Bell: You’ve suggested that, while you think Black et al. might be guilty of greed, the evidence falls short of proving an intent to defraud. As the trial wraps up do you still feel the same way and why?
Roger Martin: I still feel that way, but as I have said all along, I have not had a second of legal training in my life so I might be totally wrong. Unless there is something that I have missed in the trial proceedings, I would still be worried about this being called fraud. I think that it would let completely off the hook all auditors, audit committees, deal lawyers and regulators, and that would be a bad thing.
Douglas Bell: Are some of the issues you’ve raised about imbuing ethical standards better served by pre-career education or continuing education or both?
Roger Martin: I think the most effective is both. I think that we need to help business students understand the dangers of a “how much” attitude in pushing them across ethical lines. But they probably won’t really internalize the lessons until they are faced with “how much” vs. “enough” choices out in the real world. And then it will be helpful to have a refresher on the subject.
Douglas Bell: Are there in your view different standards for what counts as ethical business behaviour in different parts of the world? Do you sense that Black’s travails are viewed differently by business people in Europe and Asia. If so, how and why?
Roger Martin: In some ways, yes. I think that the North American capital markets function somewhat differently than capital markets in some (but not all) other parts of the world. And I suspect some observers elsewhere are perplexed by the nuances of legal and regulatory obligations of officers, directors, etc. However, I suspect there are not completely different views in those quarters of the basic notion of fiduciary duties to those who give you their money in exchange for a share of the company you run. And I bet that even the ones perplexed by the legal nuances cringe a bit at the behaviours highlighted in the trial.
Douglas Bell: One last question. Picking up on your point about audit committees etc. being let off the hook if Black is treated as a sort of sacrificial lamb, what would you say to Kravis, Thompson and Burt to communicate to them just how ba
dly they’ve let down the side?
Roger Martin: I have been pretty direct in my blog on this. Their logic is utterly unacceptable. Utterly. They can’t at the same time accept membership on a committee that is charged (among other things) with making sure that the shareholders are being protected against deleterious manouevers by senior executives and then turn around and claim that they counted on senior executives to tell them if and when they were misbehaving. I am left scratching my head as to how a person with an IQ above 100 could possibly frame such an argument. They all thoroughly embarrassed themselves.