Washington Babylon — May 29, 2007, 11:21 am

Black Helped Frum Stay in the Black

I recently obtained financial records that showed that in late 2000 David Frum, the former speechwriter for President Bush, received monthly payments of $16,667 from Conrad Black’s Hollinger International. Black, the media magnate, is currently on trial for fraud and racketeering in Chicago. Prosecutors allege he used Hollinger as his personal “piggy bank”; he and three co-defendants are charged with stealing $60 million from the company . A 2004 report by Richard Bredeen, done at the request of Hollinger’s board, said Black displayed “no need to distinguish between what belonged to the company and what belonged to the Blacks.”

In the overall scheme of things the combined sums were relatively small, but I was curious for a number of reasons. First, it wasn’t clear what Frum did for the payments. Second, Frum has publicly defended Black against charges that he misused Hollinger money and yet has never, as far as I can tell, acknowledged that he received money from Hollinger. Third, Black is accused of misspending shareholder money and any payments from Hollinger to Frum, a long-time friend of Black’s, should only have been made for sound professional reasons.

So yesterday I sent Frum an e-mail to ask about the money. He replied online, writing that the payments—which were made between September and December of 2000, and were halted when Frum went to work for the administration—were “to help develop a new Internet publication for Hollinger.” (He didn’t say whether this publication ever came to fruition.)

“I have repeatedly referred in this space and elsewhere,” wrote Frum, “to my long professional association with Conrad Black.” He wrote that the consulting fees he charged Hollinger “were in line with what I have charged other clients for similar work,” and that disclosures “can easily become silly and pedantic. Do I really have to mention that I used to write speeches for George W. Bush every time I write about him?

I’m emphatically not suggesting Frum did anything wrong in taking money from Hollinger, but I do think he should have disclosed the payments. No, he doesn’t need to mention that he was a former Bush speechwriter every time he writes about the president because his work for Bush is common knowledge (and only a Wikipedia search away). But when Frum defends Black on charges that he misspent Hollinger money, I believe he should acknowledge that he was a recipient of Hollinger largesse to the tune of $16,667 a month. That’s a relevant fact beyond any professional or personal relationship the two men had, particularly in the context of Frum’s commentary on the ongoing trial.

The payments are also noteworthy because they are typical of the way that Black spent shareholder money on whatever suited his fancy. I asked a former Hollinger employee about Frum’s explanation of the payments. “If there was a good idea for an Internet publication that would make money, there’s no issue,” she replied. “The trouble for all of us was there were no business plans for any of these ‘internet investments.’ The accountants would ask us for contracts, paperwork, backup, prospectuses, the things you would have in hand before you send large sums of money to someone. These business niceties never existed. So, yes, it could have been a legitimate business consulting fee, though the business was never described or explained to those doing the funding, in the office, or to the shareholders whose money it was.”

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More from Ken Silverstein:

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