Conrad Black and David Radler used company money to make millions of dollars worth of charitable donations in their own names, according to allegations in a report by a committee of Hollinger International Inc.'s board.
"Hollinger's charitable giving during this time period was tainted by a number of factors including Black's and Radler's usurpation of public credit for Hollinger's charitable giving," the report said.
Lord Black, through his holding company that controls Hollinger, rejected the report and said it is "full of so many factual and tainting misrepresentations and inaccuracies that it is not practical to address them in their entirety here."
The donations outlined in the report included a $5-million gift Lord Black arranged for Toronto's Hospital for Sick Children in 1998. The donation was supposed to come from Lord Black's foundation and the National Post newspaper, which began publication that year.
The gift was one of the largest in the hospital's history and in return it renamed a major wing The Black Family Foundation Wing.
According to a source familiar with the donation, it was actually a 10-year pledge with Lord Black responsible for $400,000 annually and the Post $100,000.
Yesterday, the committee alleged that Hollinger covered about half of Lord Black's annual share for a total of $445,000.
The report also alleged that senior executives at Hollinger had no idea Lord Black was directing company money to the charity.
Helen Simeon, a spokeswoman for the hospital, declined to comment on the status of the donation. When asked if the hospital will remove Lord Black's name, she replied: "No decision has been taken on that."
CanWest Global Communications Corp. acquired the Post in 2000 and agreed to pick up the newspaper's share of the pledge. However, in return CanWest wanted Hollinger to make equivalent contributions to charities identified by CanWest, the report said. The committee said it was unaware of any Hollinger donations made as part of that request.
The committee's report also claimed Mr. Radler used company money to pay for part of a $637,000 donation to Queen's University. In return the university established the Radler Business Wing. The committee said Hollinger funded $168,000 of the gift but reaped almost no benefit or recognition.
"On at least one occasion, Radler made a donation to the university and submitted his receipt to Hollinger for reimbursement," the report alleged.
Mr. Radler also allegedly used company money to pay for part of a donation to Israel's Herzog Hospital, which established the Rona and David Radler trauma recovery unit.
The committee also claimed Lord Black directed millions of dollars to a myriad of charities tied to Hollinger directors.
In return for many of those donations, the report alleged Lord Black and others, including his wife, Barbara Amiel, received significant personal benefits such as positions on fundraising committees or invitations to events.
For example, the report alleged the company pledged $100,000 to the Franklin and Eleanor Roosevelt Institute, which is tied to Henry Kissinger.
At Lord Black's request, Hollinger also contributed $1.5-million to The National Interest, a foreign-policy quarterly published by Hollinger at the Nixon Center in Washington, which is tied to several company officials including Lord Black.
At one point, the report alleged, Lord Black directed the company to donate $7,200 to a charity run by musician Elton John at the request of Lady Black.
The donation was made even though the company had already fully committed its budget for donations at the time, the report alleged.