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Quest Means Business

Conrad Black's Rise and Fall; Mapping Libya's Future; U.S. Stocks Struggle; Brazil Rate Cut

Aired September 01, 2011 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICHARD QUEST, HOST: Heading back to prison and still fighting -- Conrad Black tells me he's an innocent victim of an out of control prosecution service.

(BEGIN VIDEO CLIP)

CONRAD BLACK: It was completely impersonal other than that I was the big fish. They wouldn't have cared if the big fish's name had been Richard Quest. It's just let's get big fish in Chicago.

(END VIDEO CLIP)

QUEST: A message of defiance from Gadhafi -- a reminder to leaders meeting in Paris, he's not gone yet.

And from boom to gloom -- Brazil's economy is wilting.

I'm Richard Quest. We have an hour together. I mean business. Good evening.

Lord Conrad Black of Crossharbour -- the man had it all, only to spectacularly fall from grace. It's an extraordinary story. One of the world's most powerful media barons has been locked in a titanic battle with the U.S. justice system for nearly a decade. And tonight, he gives us his view.

On being sent to prison, Lord Black says: "I survived it. I'm an innocent victim."

On his conviction itself, he claims: "I was the big fish."

On the appeal judge who condemned him, he calls that judge "a psychotic megalomaniac."

Tonight, we'll also hear his views on this year's controversies -- Dominique Strauss-Kahn, the case. Black calls it "a spurious and outrageous smear job."

And as for his contemporary and rival, Rupert Murdoch, there's a barbed compliment from one taker into another. The News Corp boss, as he says, "a great bad man."

Now, let us begin our special coverage tonight with the events four years ago.

Conrad Black was sentenced to more than six years in prison. A court had found him guilty of defrauding shareholders and skimming money from his own news empire. He was acquitted of most of the charges.

Black was released halfway through his sentence, but he must return to serve time on separate charges, an appeals court ruled. His dramatic rise and fall that has, frankly, shocked the world.

(BEGIN VIDEOTAPE)

QUEST (voice-over): Conrad Black's rise as a media tycoon began in the 1960s when he started buying up small Canadian newspapers. By the 1990s, he was in charge of an empire that spanned Europe, the United States and beyond, owning some of the world's most prestigious titles, amongst them, Chicago's "Sun-Times," the "Jerusalem Post" and the UK's "Daily Telegraph".

But his fall from grace was as dramatic as his rise. In November, 2003, he was forced to resign as the chief executive of Hollinger International, accused by the board of directors of siphoning off millions of dollars of cash into his own pocket.

By August, 2005, the tale begins to unravel. The Securities and Exchange Commission charges Black and three of his associates with fraud, obstruction of justice and racketeering.

By December, 2007, his media empire is on its knees and so, it seems, is his reputation.

Lord Conrad Black is acquitted of many of the charges of which he's been accused, but convicted on several counts and so sentenced to six-and- a-half years in prison.

Conrad Black has always maintained his innocence and many of those remaining charges were overturned by the Supreme Court.

(END VIDEOTAPE)

QUEST: Conrad Black has lost more than his liberty, as this scandal has played out. The media empire that he had, Hollinger International, a conglomerate that owned 60 percent of all Canadian newspapers and hundreds more daily newspapers worldwide.

"The Daily Telegraph" in the U.K. was his first major significant foreign. It was "The Telegraph" that allowed him to launch into so many other countries. And it's "The Telegraph," of course, which was finally one of those taken away.

Also a crucial paper for him, the "Jerusalem Post." That was seen as a trophy in the empire, along with the "Chicago Sun-Times," a cornerstone of his empire.

And it was in Chicago, of course, that Conrad Black finally faced boards. Hollinger became the Sun-Times Media Group, which it became. "The Telegraph" was sold to the Barclay brothers. The empire was split up.

As for himself, well, Lord Black renounced his Canadian passport so that he could accept the U.K. peerage, since the Canadian prime minister was against a Canadian citizen receiving such an honor.

He, of course, now entitled to sit in the House of Lords, where he was stripped of his right to take the conservative Tory whip, something of which he's quite dismissive about now.

As for Conrad Black, now he's trying to get back his Canadian passport, because that would facilitate a convicted felon for getting back into the United States.

The properties have just about gone. The New York apartment is gone. The Palm Beach, Florida home was sold for $25 million in April.

Conrad Black knows that once he comes out of prison, he will be unable to return to the United States unless he receives a waiver.

It was at the home that he returned several times, to the Palm Beach home, for his very -- in between his various legal bits.

U.S. officials have seized $9 million of his assets. And they have, of course, taken large parts of that which remains.

Conrad Black is telling his side of the story in his memoirs. It is entitled, "A Matter of Principle." This is the galley proof.

I spoke to him at length and I asked him, as he headed back to prison, having been resentenced, what was his thoughts.

(BEGIN VIDEOTAPE)

CONRAD BLACK: Well, it would be impossible not to reflect yet again on what an outrage and fatuous business the whole thing is, since there are really no convictions and there is no possible excuse for having launched the case in the first place as a criminal prosecution.

But essentially, my thoughts are that they started out buying into this theory of a $500 million corporate kleptocracy. I successfully collected, by far, the largest libel settlement in the history of Canada against the authors of that particular allegation, who sponsored the prosecution.

Given the correlation of forces between the United States government and myself -- and they were seeking life imprisonment and $140 million -- I got rid of all the counts and then one psychotic megalomaniac of an appeal judge purported to retrieve two counts and I am down to $285,000 --

QUEST: Right.

BLACK: -- and seven more months. I feel it is a victory lap.

QUEST: OK, now, you -- you've taken me straight into the -- into the deep waters. You have never accepted, from -- from the moment this started right the way through to now that there was anything that you had to -- to be remorseful about in this case.

BLACK: I wouldn't say that. I -- I regret certain tactical errors. But I have, as you say, been militant throughout, that I committed no illegalities. And I -- if you read the book that I wrote, that you've kindly started to read, I think you would conclude the same.

QUEST: When I was reading the book, it all begged the question, why do you think they went after you?

What -- in the book, you actually say: "It was my honor to be the sole real subject of the case."

Why, Lord Black?

BLACK: Because that's how the American system works, Richard. The prosecutors fixate on a big fish and if they get any opening -- and -- and this is a matter that would be weighing in the mind of Mr. Murdoch now -- if they get any opening, they -- they intrude into it. They start questioning everyone around the target. They say, well, if your memory doesn't miraculously yield up your recollection that the target did such and so, then we're going to have to indict you, and then all of a sudden, you have 50 people pointing at the person they're after.

And the -- you know, the procedure, the evidentiary procedure in the United States is a stacked deck. The prosecution speaks last. They freeze your money so you can't defend yourself. The American lawyers are obscenely avaricious.

QUEST: Right.

BLACK: If I hadn't had most of my assets outside the United States, I couldn't have paid for a defense.

QUEST: How did you feel about the reports when you're resentencing that the judge might have gone against you because some said you were haughty in prison, some said you were lording it over people, some people said that you were having your laundry done. Other people said you were having meals cooked.

What's true and what's not, Lord Black?

BLACK: Richard, not even in jest. We had over 60 spontaneous letters from fellow -- former fellow residents saying very positive things about me and how much I had helped many of them.

Then, in desperation, but typical of the way it operates, the U.S. attorney went and browbeat two correctional officers into saying that the hearsay is that such and so. Then there was another avalanche of spontaneous letters saying this is not true. People, at some risk to themselves, because DOP correctional officers don't like being publicly contradicted. We demanded --

QUEST: All right --

BLACK: -- that all of this be subpoenaed, all the correspondence, and the (INAUDIBLE) -- I mean, just a minute, Richard -- be subpoenaed and the government backed right out of it.

So your question is based on things the government itself has renounced and the judge herself reduced my sentence by --

QUEST: OK --

BLACK: -- by an entire year because of my, as she put it, superlative performance.

QUEST: You have been deliciously rude about, even in this interview, about the appeal court judge, Mr. Posner, "a pustule of animus" you describe him in the book.

But you're also -- you have it in a bit for Judge St. Eve, describing her as "Little Red Riding Good" demeanor.

Is it helpful, do you think, to attack the judges in this way?

BLACK: I don't think it matters now. I don't expect to encounter those two again.

In the case of St. Eve, you're not giving a representative picture. I did credited her with -- I did credit her with being very courteous, very efficient and --

QUEST: Did you?

BLACK: -- and in the end, I don't think she believed I was guilty of anything. I think she was just going along with trying to put -- and the probation office, by the way, didn't either.

But she was just putting a fig leaf on -- on the -- on the antics of the Chicago legal establishment, the U.S. attorney and the former chief judge.

And Posner, I -- I really don't care. I'm not trying to be constructive. I think the man is an absolute disgrace and totally unsuited to that office.

And here's a guy who, by the way, Richard, in case you're not up, you know, right up to speed with some of his more innovative and peppy public policy ideas, wants to turn the whole process of the adoption of children into a straight economic auction.

I mean we are not dealing with a man who has both oars in the water. He told "The New Yorker" magazine he was callous and cruel.

QUEST: How much of these views have been colored by being in prison?

BLACK: Oh, not -- not at all. Actually, my views of being in prison have been somewhat rounded by my appreciation of how abominably treated most of the accused are. In they -- in the United States, very few of them get what would be called justice. The prisons are partly mental homes and then partly detention centers for over sentenced small fry in this fatuous drug war that has turned Mexico into a civil war country and has -- and is a perfect textbook example of supply economics.

I understand drugs are more available, cheaper and of higher quality than they were before the trillion dollar war began.

QUEST: And yet you describe prison for yourself as being: "The worst the enemy could do would be quite survivable."

BLACK: Exactly. I survived it. I know what bothered me, not in the regime and not in the -- not amongst the residents. I get fine -- on fine with everybody.

QUEST: Were you --

BLACK: And it was very fulfilling to me to help 100 men graduate from high school, you know, secondary school, which they wouldn't have done before.

QUEST: In your book, you -- you quote Lord Carrington, the former British foreign secretary, describing you: "He doesn't quite get it. People will look at Conrad Black and say, hmmm, nice chap, but doesn't quite get it."

(LAUGHTER)

BLACK: You know, I don't think they'll say that. I hope they will say nice chap. But I don't think they will say doesn't quite get it. And I don't think that Lord Carrington meant "doesn't quite get it" in the sense that your question implies.

As I said earlier, what he meant was that there is a certain style to genteel London dinner parties that I tended to override a bit. That's all he meant. And I may say that Lord Carrington has been a -- a great and encouraging friend throughout this. And he's a very great man.

QUEST: I'd like to hear your views on what followed after the crisis of 2008 and your view that America has perhaps seen -- or the United States has perhaps seen its best days behind it.

As you -- you were locked up during the crisis for -- for much of it.

How do you view the great financial crisis of 2008?

BLACK: Well, I myself predicted many times in these columns that I write in the U.S. and Canada that they couldn't go on with an $800 billion current account deficit. I didn't know anything about the real estate business. I had no idea there was that -- that quantity of essentially worthless mortgages floating around.

But what shocked me was nobody predicted it except for one right here eccentric academic at one of the campuses of New York University. No one, not -- not the -- not the central bankers, not the lending bankers, not the merchant bankers, no one in the Congress and the -- in the fiscal committees in the Congress, no one in the Treasury, no industrials.

QUEST: Right.

BLACK: And when it came, one of the leaders of Citigroup said, well, when the music is going, everyone has to dance and the president himself said the sucker could go down.

Well, look, I would have thought something more like, you know, the only thing we have to fear is fear itself. I mean let's have something a little more --

QUEST: All right, let --

BLACK: -- more of a toxin here.

QUEST: But do you believe something is fundamentally wrong with the system in the United States?

BLACK: Of course. And not only in the United States. We have too many people who aren't actually producing and too many people in service industries which are just a taxation on the actual task of value-added. We have a -- an economy altogether too oriented to satisfying appetites for essentially superfluous goods.

I mean, of course the luxuries are important. But they've become too important. And we have a safety net that's become a hammock, so we have, especially in Europe, inordinate numbers of people who don't do anything and feel entitled to being paid for by those who do do something.

(END VIDEOTAPE)

QUEST: At half past, we'll bring you part two of my interview with Conrad Black, when we focus on the media mogul, as he shares his thoughts on two other infamous press barons, Rupert Murdoch and Robert Maxwell.

That's still to come later in the program.

After this break, oil production is seen as a key to recovery, but Libya's transitional rulers have some tough challenges ahead.

And world leaders from around 60 countries have gathered to map out Libya's democratic future. We're live in Paris in a moment.

(COMMERCIAL BREAK)

QUEST: A few hours ago, a Syrian-based television broadcaster aired what they said to be was the first message from Moammar Gadhafi since his regime fell to Libyan rebels. It was an audio message and a voice said to be Gadhafi's urged the Libyan people to attack the rebels, whom he called "traitors."

The statement has left the biggest questions and answers -- where is Gadhafi now?

Some speculate he's hiding in his hometown of Sirte, just down from the coast of Misrata. A rebel spokesman said loyalists have an additional week before they must surrender.

The ultimatum originally insisted they quit fighting by Saturday or face a fierce military offensive.

World leaders from around 60 countries have just come out of the meeting with Libya's National Transitional Council in Paris. The International Contact Group on Libya has also to discuss the country's transition to democracy.

Jim Bittermann is in Paris and joins me now.

What are they expected to come out with?

What -- I mean is this -- is this more than pass it in that can around and see what people can stump up?

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I -- I think it is, Richard, because I think what basically they want to do, they want to -- there's a number of things that are going on here. And we were briefed on this a little bit ahead of time. And they haven't really told us yet what -- what they've come up with. We're expecting a news conference at any time here. But in any case, this is an opportunity for world leaders who weren't necessarily on board with the NATO bombing campaign and with the whole action against Moammar Gadhafi to get on board, basically to reconcile themselves with other members now that Gadhafi is gone.

So that's one thing.

The other thing is that the National Transitional Council is here basically passing the tin cup, as you say. They are saying there's an urgent need for at least 5 billion euros of, about $7 billion worth of aid, to get things going again, to get the power going, the water going and that sort of thing. We've got a million-and-a-half kids who are going to go to school in September and some of the classrooms have been destroyed.

So they're here passing the tin cup. But they're also here making some promises and laying out their road map for the path toward democracy. And the world leaders are going to be looking at that very carefully to see if they really can pull out what they are saying they can, which is to say democratic elections in 18 months -- Richard.

QUEST: If that is the case, and -- and I wonder, how much, then, does it play -- I mean, you know, does it play into the fact that you've got these tapes coming out today that are purportedly from Gadhafi. You've got fighting still underway. You've got the battle for Sirte that may or may not take place. And yet you've got leaders in Paris talking to the TNC as the next government.

I mean is there a slightly surreal experience of the whole thing?

BITTERMANN: You know, Richard, it reminds me a lot of March 19th, because that was the day that they had -- a Saturday, when they had this conference here in Paris. They had all the world leaders and they were just -- they took a vote to -- to use lethal force against Gadhafi. And within the time of the conference, even before the conference was over, the French planes were already bombing Gadhafi's troops.

So you had that -- this -- this sort of feeling that there's a real rush on here.

On the other hand, the presidential spokesman who was here said the other day, listen, we can't wait. Basically, we've got to support the National Transitional Council now and support them with money, because we want to make sure that -- that Gadhafi's forces, that what remains of them can't, you know, jeopardize this revolution in a way because of the fact that people are disgruntled because they don't have food and water and the rest of it.

So, the feeling is move fast, help the Transitional Council as much as possible and in that way ensure that Gadhafi cannot come back -- Richard.

QUEST: Jim Bittermann in Paris watching the conference.

Many thanks for that.

A new month on Wall Street and investors are trying to put a volatile August behind them. September never arrived so welcomingly and with good cheer. Early economic reports and manufacturing data have been influenced. We'll have the U.S. markets and the euro bourses after the break.

(COMMERCIAL BREAK)

QUEST: An interesting set of numbers. Across most of Europe, traders are putting the terrible month of August behind thee. Get thee behind me. Banking shares on the London FTSE, RBS up 8 percent, Lloyd's 6 percent, boosted by a report. And this was the reason, it was apparently the banks will have more time to implement changes between retail and investment banking, perhaps 2015, 2016. That fear is -- has been that the coalition government would railroad them through. But apparently not so.

The Xetra DAX was the loser on the three biggies. It bucked the trend. Energy shares were the worst performers. RU -- RWE, ION (ph), Deutsche Telekom, though, did show a gain. It's up 2.2 percent, rebounding from Thursday's sell-off. Several banks cut their recommendations.

You're aware, of course, the T-Mobile problems with AT&T, the Justice Department in the U.S. is opposing the merger with AT&T. So that is taking its toll.

Finally, to Paris. Alcatel-Lucent up 3 percent, just over, on new defense contracts. The defense -- the ministry of defense selected it to update the air force communication network.

Now, in the United States -- look at me turning my back . Stocks there struggled to make gains. They're wavering at near even -- at breakeven levels.

Manufacturing numbers came in that were stronger than expected. It got rid of some of the jitters.

But Karina Huber is at the New York Stock Exchange and joins me now -- and Karina, frankly, frankly, nobody is going to do much ahead of that jobs report on Friday.

KARINA HUBER, CNN CORRESPONDENT: Yes, Richard. I think that is a safe assessment. There's quite a bit of hesitation today ahead of that, all important, the big Kahuna of the econ data, the employment report we're speaking about -- 80,000 to 100,000 new jobs created last month.

The unemployment rate, though, is sort of a wild card. It could remain unchanged at 9.1 percent, but it could go higher. So we could get a mixed bag.

So, yes, Richard, safe to say a bit of hesitation today. We've got a real choppy, a seesaw trade on the day, where stocks have been sort of dipping in out of the green. But they are trading lower right now, with the Dow by 85 points, or about .7 of a percent.

QUEST: All right --

HUBER: Now, what could be weighing on stocks is the White House's growth outlook for this year. It lowered its estimates down to 1.7 percent from its previous 2.7 percent estimate -- Richard.

QUEST: OK, now -- now, I have a theory, which, of course, you can debunk and tell me is absolute nonsense.

HUBER: Yes.

QUEST: I think that after the awfulness of August, this is the week that people, particularly with the holiday weekend coming up, the vacation, the long weekend, people have decided if we're going to get a break, this is the weekend -- this is the week to do it.

Any truth in that or am I just sort of off beam?

HUBER: You know, we've seen some nice trading sessions at the beginning of the week but a bit of a pullback right now, as I said, ahead of that employment report now.

The question is, will investors get back into the game after we saw the sharp selloff a month earlier?

It seems like a good time to buy, especially if you want to hold. But at the same time, there are a lot of unknowns right now about how the economy is going to do in the U.S., also in Europe. So I wouldn't bet my house on this being a strong month, because, keep in mind, historically, September is the worst performing month of the whole year, so --

QUEST: Oh.

HUBER: -- don't bet all your money on that, Richard.

QUEST: Oh, come on, Karina. It's barely September 1st and you're pouring water.

All right, many thanks.

Have a good long weekend.

Now, coming up in just a moment, the second part of our interview with Conrad Black.

What did he think of what happened to Dominique Strauss-Kahn, Rupert Murdoch and his own future, in a moment?

(COMMERCIAL BREAK)

QUEST: Hello. I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN. And here, the news always comes first.

There's been a satellite channel in Syria which has broadcast a fiery audio message said to be from Moammar Gadhafi. The message urged Libyans to take up arms and fight the rebel movement. It's all an attempt, apparently, to rally loyalist holdouts as they face an ultimatum from the rebel Council. The ultimatum -- surrender or be attacked.

Libyan rebel leaders are in Paris planning for a post-Gadhafi democracy. They've been meeting with leaders and representatives from some 60 other delegations. It's an international contact group to discuss what sort of help that Libya will need immediately and in the long-term.

A Kurdish rally turned violent in Istanbul. Young Kurds, men with bandanas over their faces, hurled stones and petrol bombs at police. Security forces fired tear gas in response. The demonstration started with a fairly peaceful on what Turkey's main Kurdish political party dubbed World Peace Day.

And Conrad Black is telling me tonight he feels he has been victimized by U.S. prosecutors. The former newspaper executive is due to return to prison after being released midway through a sentence for fraud. Lord Black maintained his innocence and says he believes prosecutors were only looking for a big fish.

Economic news. And Brazil has acted to fight weak growth. In a shocked decision, the central bank has slashed its main interest rate, cutting rates by .5 point, to 12 percent, reflecting mounting concern about the state of Latin America's largest economy. Analysts predict that the growth in Brazil will slow to around 4 percent from last year's 7.5 percent.

There are serious worries about inflation, currently at more than 7 percent. The country's manufacturing sector is being hurt by the volatile currency.

A little earlier, Nader Nazmi, the chief economist at BNP Paribas for Latin America, gave me his view on why they cut rates. (BEGIN VIDEOTAPE)

NADER NAZMI, CHIEF ECONOMIST, BNP PARIBAS FOR LATIN AMERICA: Well, as you know, the main reason had to do with the international environment. There is an increased risk that the global economy might be facing difficult headwinds and in anticipation of those headwinds, the central bank decided to reduce the interest rates.

QUEST: It makes sense to do that. It certainly helps them with the currency competitive devaluations that they've been talking about, the currency wars that they've been talking about. It should help take the pressure off the currency.

NAZMI: Well, in the statement that they released, the focus is mainly on the issue of global -- the deterioration in the global environment, and not only the currency side.

QUEST: When we take Brazil's role and Brazil's position in the world, and you factor it in with the slowdown in the U.S., the slowdown, the dreadful manufacturing numbers we're starting to see in Europe, is Brazil right to be worried?

NAZMI: Well, I think all the emerging markets and all Latin markets have to be concerned about the potential of a slowdown in the U.S. or in the Eurozone. Many of these countries, such as Mexico, have very, very too tied international trade connections to the United States. And the others can be hit through the financial channel or through an impact on commodity prices.

So yes, they have -- they have to be worried about a potential significant slowdown in the Eurozone or a -- or in the United States.

QUEST: And those countries like Brazil and the other emerging markets, and Latin American countries, they are constantly balancing, though, aren't they, the need to foster growth with the worries of their faster growth prompting inflation. Now, I understand inflation is not the concern when you've got a global recession, potentially, on your doorstep, but it won't be long before they'll be looking at it again, is it -- will it?

NAZMI: Yes, you're absolutely right. You know, most of these countries, the major Latin America countries and emerging market countries, as you know, they have an inflation targeting system in place. And in that system, they actually focus on the two issues that you just raised, that is inflation and growth. And right now, the concern that (INAUDIBLE) has really shifted to a slower growth. And it's very important for us to remember that those bad days that Latin America had really high inflation rates, those are behind us.

Now, we are talking about inflation rates that are very reasonable, even by advanced countries' standards. We're talking about inflation rates of 3.5 percent, for example, in Mexico, close to 3 to 4 percent in other countries in the region, slightly higher in Brazil --

QUEST: Right.

NAZMI: -- but as a whole, inflation is well controlled.

QUEST: Finally, we know that the Fed is going to keep rates low until 2013 and we know that probably similar in the Bank of England. I suspect the bank in Brazil will be raising rates a little before then.

NAZMI: Well, that I do not know. I do not -- we don't -- I do not know what the central bank in Brazil is going to do with regards to the interest rates going forward to 2013 and 2014. Right now, they have decided that cutting the rate is the best option that they have in the face of -- in the face of the global headwinds that we see.

But what you are seeing is really important to pay attention to in the sense that Latin American central banks have really shifted their policy. Those that were on a tightening cycle, such as Chile, Colombia, Peru, they have stopped. They are not increasing the interest rates anymore. And those who were, especially Brazil, that they thought they were going to (INAUDIBLE), they have actually cut the interest rates.

So the -- the -- the policy move, in terms of the central bank's approach, has shifted.

(END VIDEOTAPE)

QUEST: Now, we're back with the second part of our interview with Conrad Black after the break.

(COMMERCIAL BREAK)

QUEST: Conrad Black tells me tonight he feels he is being victimized by U.S. prosecutors and the U.S. justice system. He says he believed that prosecutors were only looking for a big fish.

So, to the second part of the interview with Lord Conrad Black, when I asked him if he really believed there was a personal motive in the charges brought against him.

(BEGIN VIDEOTAPE)

BLACK: It was completely impersonal other than that I was the big fish. They wouldn't have cared if the big fish's name had been Richard Quest. It's just let's get big fish in Chicago.

And we had a special committee in our -- in our company, which, when I agreed to the formation of it, I thought would be an admirable thing to clear the air and show that absolutely nothing had gone amiss. And then they found that one of my associates had done a few bad things. So he made his deal and pointed at me.

And then they laid it onto the prosecutors and that's what happened.

But I mean I'm always amazed, Richard, that you people in Britain generally consider the United States a half mad country anyway and you're always skeptical about its justice system. And I don't know how anyone in that country could take seriously this fetelcious (ph). No British court would have even received these prosecutions, let alone returned guilty verdicts. Neither would a Canadian court.

QUEST: You mention Rupert Murdoch. And your art -- your recent article about Mr. Murdoch is -- is perhaps less than charitable. And you're -- in the book, you describe him as "ruthlessness. He conducts campaigns to humanize himself, but" -- but, frankly, you're not terribly impressed. "He has no friendships, no nationality emotionally. The company he has built is his nation," you -- you write.

Do you -- do you now and would you warn Rupert Murdoch to be careful that the U.S. authorities may be after him?

BLACK: I don't think Rupert needs much warning from me. I see he's hired my former counsel, Brendan Sullivan. And I -- I think he would not be doing that if he thought that there were no chance that there might be interested what he's doing.

But you said I was uncharitable to him. I don't think I was. I believe you're referring to the article I wrote in "The Financial Times." I did say he was the greatest media proprietor in history. Then the rest of it is a character description that anyone who knows him, I think, would agree with.

I mean he -- he, as I said, he is a great bad man. But it has come to light in this country that despite our 25 year cordial relationship, he specifically instructed the editorial desk at "The New York Post" to make the articles about my travails as nasty as possible, while he was sending placatory letters --

QUEST: OK.

BLACK: -- to me. I mean Rupert is a bad man. But -- but he's done great things and that shouldn't be taken from him.

QUEST: How do you feel about that, somebody you've worked with or known for decades was actually agitating against you?

BLACK: Well, you're -- Rupert Murdoch is a special case. He's a sadistic man and he has, as far as I can see, no human feelings at all. But -- but he is who he is.

If you mean as things go forward, would I be welcoming a contest between him and the U.S. prosecutors, no, I -- I -- Rupert is just a powerful man who -- who is a nasty and misanthropic person. The U.S. prosecution service is eating at the soul of the American republic. It is an absolute danger to everyone. And I would wish Rupert well if he gets in the maw of it.

QUEST: What about Dominique Strauss-Kahn?

BLACK: Unrequited though those good wishes were, I must say.

QUEST: Let's just (INAUDIBLE) and talk about Dominique Strauss-Kahn, another man who has felt the wrath of the U.S. justice system, to his advantage, of course. The prosecutor did finally drop the case.

As you look at what happened to DSK, do you see this as further evidence of your views against the U.S. justice system?

BLACK: Absolutely. I -- I mean the fact is, they didn't have a case. It was utterly spurious and outrageous that on the unsupported denunciation of a person who they could easily determine to be of questionable reliability, that they took him down to Rikers Island, which is -- it has to be one of the roughest prisons in the Western world, treated him as a -- on suicide watch, conducted the usual American prosecutor's top to bottom, wall to wall smear job of him and -- and then the case evaporated.

He had to give up the job that he had, where it was generally recognized he was doing well, a very important international job. It's not clear what impact it will have on his political future.

But I mean it's all part of the -- the American prosecutorial mind, that they can take down anybody --

QUEST: All right --

BLACK: -- and that the extraterritorial implications of what they do is completely irrelevant to them.

(END VIDEOTAPE)

QUEST: And there we will leave, momentarily, our interview with Conrad Black.

Let's go to Paris, where Nicolas Sarkozy, David Cameron, Mustafa Abdul and others are --

END