Buch lesen: «Maxwell»

Contents

Cover

Title Page

Copyright

Dedication

Epigraph

Preface

Introduction

1 The Autopsy – 9 November 1991

2 The Secret – 5 November 1990

3 Hunting for Cash – 19 November 1990

4 Misery – December 1990

5 Fantasies – January 1991

6 Vanity – March 1991

7 Flotation – April 1991

8 A Suicide Pill – May 1991

9 Two Honeymoons – June 1991

10 Buying Silence – July 1991

11 Showdown – August 1991

12 ‘Borrowing from Peter to Pay Paul’ – September 1991

13 Whirlwind – October 1991

14 Death – 2 November 1991

15 Deception – 6 November 1991

16 Meltdown – 21 November 1991

17 The Trial – 30 May 1995

Epilogue

Keep Reading

Notes

Company Plan

Dramatis Personae

Glossary of Abbreviations

Index

Acknowledgements

About the Author

By the Same Author

About the Publisher

Preface

On 12 May 1989, Peter Jay signed a short letter marked ‘Private and Confidential’ addressed to George Potter OBE, a director of Control Risks, one of Britain’s leading private detective agencies. Jay, the chief of staff to Robert Maxwell, thanked Potter, a former police officer, for ‘your letter and for the time you gave to meeting me and preparing it’.

Potter’s letter had described his surveillance of ‘the location and the levels of background radiation in the area’. Potter was referring in cryptic fashion to a surreptitious reconnaissance mission which he had undertaken around my home in Hampstead, north-west London. He continued: ‘Extremely sophisticated equipment does exist which might overcome the technical problems. Its acquisition would cost an estimated £50,000.’ The private detective was describing a scanner which would emit rays capable of penetrating my home and ‘reading’ the contents of my computer’s hard disc.

Wisely, Potter cautioned Jay about the problems. First, the detective wanted to be paid in advance the £50,000 for the equipment and also some fees. Secondly, Potter warned, he had ‘reservations as to the possibility of obtaining the evidence you require and the ability to keep the operation covert’. The detective’s concerns were understandable. A van carrying the scanner would be parked at the bottom of my garden in a narrow service road used by the Hampstead postal sorting office. Remaining unobtrusive for long periods would be difficult.

Jay, who had once basked in the glorious description as one of Britain’s ‘cleverest men’, was not slow to grasp Potter’s cautionary tone but was sensitive to the dissatisfaction that this report would cause his demanding employer. Little had been achieved since, one month earlier, he had received a briefing from Tony Frost, an assistant editor of the Daily Mirror, following his investigation around my Hampstead home.

Frost had accurately noted my address and identified my car, before reporting that ‘neighbours say his working hours are “rather erratic” with frequent trips away’ and that I ‘spent “a full working week” at the offices or studios of the various TV companies who commission his work’. Curiously, he noted that my newsagent ‘seemed to know Bower quite well’. After alluding to my financial status, Frost observed that my road is ‘typical of the more up-market parts of Hampstead’ and flatteringly noted, ‘the house looked to be tastefully and expensively decorated inside’.

Copies of Frost’s memorandum were also sent to Eve Pollard (then editor of the Sunday Mirror), Ernest Burrington, (then editor of the People) and Joe Haines (then a Daily Mirror columnist and a director of the Mirror Group) – all owned by Maxwell’s Mirror Group Newspapers.

Jay filed Frost’s report in his bulging ‘Bower File’, which was marked in large letters ‘Private and Confidential’, reflecting the heading of every document it contained. Each letter on the topic signed by the chief of staff urged its recipient to treat the matter with utmost secrecy. Jay had become rather proficient in conducting the operation.

Ever since his employer had heard in summer 1987 that I was planning to write Maxwell: the Outsider, an unauthorised biography of himself, Peter Jay had been employed as his chief of intelligence to gather and co-ordinate information about my activities and identify those people whom I was interviewing. On one occasion, detectives had clearly followed me to a meeting with Anne Dove, Maxwell’s former secretary, with whom he had enjoyed a close relationship in the 1950s. The results of their work were formalised under Jay’s supervision in sworn statements which would be used to back the avalanche of writs and court hearings, costing £1 million, which obsessed Maxwell until his death.

Initially, Maxwell tried to prevent the book’s publication in February 1988, at the same time publishing his own version written by Joe Haines. When my book hit the top of the bestseller list, Maxwell sought through individual cajolery and writs to prevent every bookshop in Britain selling the title. Eventually he was successful in this endeavour, but he nevertheless continued to hound me and the publishers by pursuing various writs for libel. Jay’s task was to co-ordinate and supervise the unprecedented legal battle.

By spring 1989, one year after publication, when the first of three publishers had agreed to publish the paperback version only to retreat rather than face the subject’s wrath, Maxwell’s anger was increasing in parallel to the secretly developing insolvency of his empire. His fury had shifted from the book’s accurate description of his unaltered dishonesty to something which in his view was more sinister. He believed that I had become a focus for his enemies and a receptacle of damaging information. Just as he was finalising a deceptive annual financial report for the Maxwell Communication Corporation, of which he was chairman, he embarked upon a new venture to humiliate the book’s publisher and bankrupt its author.

Four lawyers were Maxwell’s principal advisers. Lord Mishcon and Anthony Julius were his solicitors and Richard Rampton QC and Victoria Sharp were the barristers. During their frequent court appearances, they betrayed no hint of doubt about their client’s virtues. On the contrary, they pursued his mission with depressing vigour, commitment and pitilessness.

Their client’s anger had by then increased still further. The book had been published in France and his defamation action there had failed. To his fury, a court had ordered that he pay me FFrs 10,000 in costs. The threat that the book might also be published in his beloved New York galvanised him to resort to more draconian measures.

Maxwell had become convinced, in the words of Stephen Nathan, another barrister hired for advice, that I had ‘compiled (and continued to compile) an extensive record of information concerning Mr Maxwell and has put the distillation of that information on to a computer which he keeps at home’. Maxwell’s source was Frost, who, during his gumshoe expedition around Hampstead, had picked up from an ‘unidentified source’ the notion that my study had become a centre for subversive activities against the Chairman.

Nathan had been asked to advise whether I could be prosecuted for failing to register as a data-user under the Data Protection Act 1984 or, better still, whether Maxwell might approach the Director of Public Prosecutions. The DPP, the Chairman hoped, would direct the police to seize the computer without warning. That course, advised Nathan, would be possible only if Maxwell could persuade the DPP of the allegedly dangerous contents of the computer.

Frustrated by Nathan’s wishy-washy advice, Maxwell ordered Lord Mishcon to seek the seizure of my computer on the orders of a judge under an Anton Piller order. Naturally Jay passed on the instruction to Julius. Such an order, suggested Jay, would enable ‘Bower’s computer records to be seized under warrant, without advance notice being given, therefore without Bower having an opportunity to destroy or conceal such records’. In retrospect, the irony of Maxwell mentioning Anton Piller was manifest. The order, as Mishcon explained, is used to obtain the seizure of documents for the investigation of fraud or systematic dishonesty. And Jay, in passing on Mishcon’s advice to the Chairman in another ‘Intermemo’ on 7 April 1989 headed ‘Bower’s Computer’ and marked ‘Strictly Confidential’, noted mournfully, ‘Legally speaking, this is not (quite) the situation with Bower.’

Mishcon urged his client to adopt the customary course and apply to the court for the computer records. But, he cautioned, ‘Our evidence that these records exist is thin.’ Therefore, advised the peer, ‘I recommend that investigations should continue.’ Hence Maxwell ordered Jay to seek the evidence required, and this was why Jay was inspired to ask the detective to place the scanner at the bottom of my garden. But after receiving Potter’s disappointing news, Jay concluded, ‘It is not really practical to proceed along the lines we discussed.’

That was by no means the end of the battle. Until October 1991, Maxwell regularly held meetings with lawyers and with his personal security staff to propel the battle towards my bankruptcy and his vindication. The readiness of Peter Jay, a journalist and former British ambassador, to function as his willing tool was sadly not unique in Britain or elsewhere. He merely epitomised a cravenness common among a horde of self-important personalities and powerbrokers whose self-esteem was boosted by the Chairman’s attentions and deep purse.

Unfortunately, the sort of campaign directed against my book acted as a disincentive for most newspapers against exposing Maxwell in his lifetime. Many blame Britain’s libel laws and lawyers’ fees for protecting him, yet the law and its expense were not the sole reason for British newspapers’ reluctance or inability to uncover his crimes. More important was the environment in which newspapers now operate.

Few newspaper editors and even fewer proprietors nowadays relish causing discomfort to miscreant powerbrokers. By nature anti-Establishment, the so-called ‘investigative’ reporter finds himself working for newspapers which are increasingly pro-Establishment. Only on celluloid, it seems, does an editor smile when listening to a screaming complainant exposed by his journalists.

Proper journalism, as opposed to straightforward reporting or the columnists’ self-righteous sermonising, is an expensive, frustrating and lonely chore. Often it is unproductive. Even the rarity of success earns the ‘investigative’ journalist only the irksome epitaph of being ‘obsessional’ or ‘dangerous’. The final product is often complicated to read, unentertaining and inconclusive. No major City slicker has ever been brought down merely by newspaper articles. Like the Fraud Squad, financial journalists usually need a crash before they can detect and report upon the real defects. Often, only with hindsight does the crime seem obvious. Even though in Maxwell’s case his propensity to commit a fraud had been obvious since 1954, it was almost impossible for any journalist to produce the evidence contemporaneously.

Moreover, many of those who reported Maxwell’s affairs during the 1980s were only vaguely aware of the details of the Pergamon saga in 1969, when his publishing empire had disintegrated amid suspicions of dishonesty which appeared to have terminated his business life. After three damning DTI reports, no one expected Maxwell’s resurrection. However, the DTI inspectors, having found the evidence of fraud and voiced a memorable phrase about his unfitness to manage a public company, had not directly accused him of criminality. It was the inspectors’ cowardly reluctance to publish their real convictions and the police failure to prosecute which permitted Maxwell during the 1980s, when explaining his life, to distort the record of the Pergamon saga.

Accordingly, by 1987, Buckingham Palace, the City, Westminster and Whitehall had forgotten or forgiven the past. In the year in which Maxwell’s final frauds began, most journalists reflected the prevailing sentiment and were willing to afford him the benefit of the doubt.

To have broken through Maxwell’s barrier required not only a brave inside source who was willing to steal documents but also someone who would risk the Chairman’s inevitable writ. But, unlike in America, whistleblowers are castigated in Britain, where secrecy is a virtue. To break those barriers also required expertise and a lot of money, increasingly unavailable to newspapers and to television. So almost until his end Maxwell enjoyed a relatively favourable press, although journalists were not to blame for the canker’s survival.

The real fault for Maxwell’s undiscovered fraud belongs to the policemen employed in the Serious Fraud Office, to the civil servants, especially in IMRO and the DTI, who are empowered to supervise Britain’s trusts and corporations, and to the accountants at Coopers and Lybrand who were his companies’ auditors. As with most of Britain’s financial scandals, those arrogant, idle and ignorant bureaucrats, having failed in their duties, were not embarrassed nor dismissed, because they were protected by self-imposed anonymity. It was their good fortune that many blamed Britain’s libel laws for the failure to expose Maxwell’s fraud. But that was and remains too easy. Maxwell prospered because hundreds of otherwise intelligent people wilfully suspended any moral judgment and succumbed to their avarice and self-interest. To suggest that much will be learned from Maxwell’s story is to ignore past experience, but his story is an extraordinary fable, not least because only now can one read the final verdict.

Introduction

Robert Maxwell had hit rock bottom when I first met him in spring 1973. Damned by government inspectors as a liar and fraudster, he had lost his seat as a Labour MP, had been ejected from Pergamon Press, his lucrative scientific publishing business, and had been cast into the wilderness as a pariah by the City and Wall Street. Few public figures had been so humiliatingly mocked as Captain Bob, otherwise known as the Bouncing Czech. ‘I wonder if I can help you?’ I said to Maxwell as we sat in his makeshift office in Headington Hill Hall, his vast Oxford home acquired for a peppercorn rent from the local council. ‘What do you have in mind?’ growled the man famed for his girth, intimidation and brazenness.

As a twenty-seven-year-old BBC TV producer, I had been tasked to film a fifty-minute documentary about the rise and fall of Britain’s most infamous tycoon, politician and multi-millionaire. ‘Well,’ I replied to the wartime refugee who had been awarded the Military Cross by Field Marshal Montgomery for charging a machine-gun post in Germany in 1945. ‘I wanted to make a film about your remarkable life and achievements. It might help your resurrection.’ As the fifty-year-old pondered the offer, I threw in that my father was also a Czech refugee. That connection sealed our fate. ‘Done,’ he said, and committed himself for the next six weeks to share his life with me and Max Hastings, the reporter.

As we trawled through Maxwell’s astonishing life – the peasant boy who escaped the Holocaust, established his fortune as a black-marketeer and thief while serving as a British army officer in post-war Berlin and, while working for both British and Russian intelligence, became a rich publisher and politician – we encountered an obstacle. ‘Mr Maxwell,’ I said, ‘in the interests of fairness and objectivity, I need to find someone who will say something positive about you. I’ve found lots of your critics but no supporters. Can you suggest someone?’

‘I understand,’ he replied without surprise. ‘Let me think.’

Eventually, Maxwell proposed his former parliamentary agent. ‘I don’t know why you expect me to say anything good about Bob,’ the hapless agent responded.

Universally loathed as a crook, Maxwell unsurprisingly hated the finished film, which portrayed him as the megalomaniac Citizen Kane. His attempt to stop it being broadcast by bribing a BBC employee to steal the soundtrack from the Lime Grove editing suite during the night before transmission failed because fortunately a duplicate soundtrack was stored elsewhere.

Maxwell’s many enemies loved the film and, not surprisingly, our relationship was abruptly terminated. Maxwell appeared destined to be forgotten. Except that fifteen years later, in 1988, his resurrection was complete.

Like Lazarus, the Bouncing Czech had risen from the ashes. Maxwell had not only recovered Pergamon Press, but had created a global media empire which rivalled Rupert Murdoch’s. Once again enjoying fame and fortune, he was regularly photographed with all the world’s leaders – including Margaret Thatcher, Ronald Reagan and Mikhail Gorbachev – brokering deals, dispensing advice and establishing himself as an unchallenged billionaire. True to his habits over the previous forty-three years, the arch deceiver was once again looking with contempt at the deceived. That was the moment to write his biography. The first to be published.

At the time, I could not imagine the profound influence Maxwell would have on my life. Until then, despite his frequent use of libel writs and compliant judges to suppress the truth about himself, the pattern of his lies, frauds and lifestyle had been touched upon in newspapers, especially by the Sunday Times. But no one had established his true venality, and Maxwell intended to preserve that protective secrecy. The publication of Maxwell the Outsider in 1988 was marked by eleven libel writs issued by Maxwell’s lawyers to prevent the book’s sale. After it briefly hit number one, Britain’s booksellers withdrew the book rather than face Maxwell in court. Yet by then, many had read my prediction that his media empire would crash three years later.

On 5 November 1991, while sailing in the Mediterranean, Maxwell had a heart attack and fell dead into the sea. Within days, his empire was crumbling. Dishonestly and secretly, he had plundered the Daily Mirror’s pension fund to support his failing businesses and many of the world’s most famous banks were exposed as his co-conspirators. In total, about £2 billion was missing. Amid widespread anger, not least from thousands of innocent ex-employees whose pensions had been looted by Maxwell, the biography was republished with a major addition about his frauds.

Internationally, Maxwell became the archetype of a criminal tycoon. Britain demanded the prosecution of Kevin and Ian Maxwell, his two sons, who had been intimately involved in the management of his empire, especially the unauthorized use of the pension fund shares to raise loans. This book tells the astonishing story of Maxwell’s furtive activities during the last year of his life and the brothers’ trial.

The brothers’ acquittal in early 1996 sparked outrage. Although Kevin had admitted during his trial that he had lied to bankers and others, he would suffer no retribution for his admitted dishonesty. Instead of being convicted for orchestrating a cunning plot to defraud bankers, shareholders and pensioners to support his father’s fantastic dream of bestriding the world as a media colossus, Kevin successfully presented himself as a victim of his father’s tyranny. Along with his brother, he benefited from the lacklustre intellect of Britain’s law enforcers. Thanks to their incompetence, no one was found guilty for the theft of £2 billion, at the time Britain’s biggest fraud. Maxwell’s victims, the pensioners of his corporations, were bewildered by the failure of Britain’s judicial system.

Scandalously, after Kevin Maxwell’s acquittal, Mr Justice Buckley ruled that he should not face a second trial, for the theft of Berlitz shares worth £112 million from Macmillan Inc, a publicly owned company. There was no ‘public interest’, declared the judge, to launch the new prosecution. Buckley ignored Mr Justice Millet’s judgment about the same circumstances, given during a long civil trial, that Kevin was involved ‘in dishonesty’ and a ‘fraud’ regarding the disposal of the Berlitz shares.

Empowered by his acquittal and Buckley’s ruling, Kevin Maxwell now insists that his father too was innocent of any crime. Ever fewer these days recall the circumstances with sufficient clarity to prove convincingly the opposite. They will not be helped by a government investigation conducted by an accountant and a lawyer employed by the Department of Trade and Industry who finally reported on the saga in 2001, ten years after Maxwell’s death. The inspectors’ crowning achievement was their failure to name a single person involved in the frauds – lawyer, banker, accountant or Maxwell employee – who should be punished. Their salutary conclusion was that ‘high ethical and professional standards must always be put before commercial advantage’. The cover-up was complete. In his celestial banqueting chamber, enjoying his favourite Beluga caviar and Krug champagne, Robert Maxwell must still be chortling about his family’s victory over Britain’s justice system and over the establishment across the globe.

In the first days after his death, statesmen and clergymen praised the monster as a genius and near-saint. Even after the truth was known, legions of awestruck bankers, businessmen, politicians and journalists recounted their individual experiences of a unique man. By size and personality, Maxwell had dominated every room. Only those he could not buy won his respect. The rest were bullied. Among both groups, his death sparked endless speculation about the cause and the consequence of his death but never admissions of their own guilt.

Nearly thirty years after his death, Maxwell should not only be remembered as an extraordinary crook but also as one of an unusual breed of mavericks created in the aftermath of the Second World War. As an eyewitness to extreme suffering and multiple deaths, Maxwell was physically and emotionally courageous. Nothing and nobody caused him any fear. Like a savage, he inhabited and fought in a jungle. His survival instinct was a lodestar. His legacy was the exposure of corruption in the City, the professions and the media – all those who turned a self-interested blind eye to his crimes. In the aftermath, some were embarrassed by their profitable relationships with Maxwell. Reputations were shredded and jobs were lost. But most escaped with just a bruise.

Few will now remember that the Maxwell saga was the climax of the Thatcherite era, which featured staggering excesses of flamboyance, recklessness, nepotism, greed, sex, crime and shameless lust. The litany of spectacular City blowouts – Guinness, Polly Peck, Blue Arrow, BCCI and so many more – revealed sordid abuses by get-rich adventurers and charlatans. And then amnesia struck.

Bewildered spectators watched as so many guilty collaborators in those scams escaped justice while business continued as usual. The supremely ambitious and amoral counted, like Maxwell, on the weakness and vanities of those lesser breeds to climb the greasy pole, and to stay on top. None more than Lord Donoughue, a former Downing Street adviser to prime ministers Harold Wilson and James Callaghan, whose lucrative services to Maxwell are described in this book. Donoughue was subsequently criticized by the government inspectors for failing to ask the right questions about how Maxwell was stealing the pension fund shares [DTI report, v1 p.316]. Pertinently, his employment by Maxwell has been expunged from his biography on the internet.

Maxwell’s success matches Edmund Burke’s observation: ‘For evil to succeed, all that is necessary is for good men to do nothing.’ Good men, however, had repeatedly tried to halt Maxwell’s resurrection but their attempts were crushed by greed. Undaunted by prejudice, humiliation, morality and the truth, Maxwell bulldozed his way through any obstacle to fulfil his ambitions. Retribution was only delivered at the end. Friendless, alone and exhausted on his luxury yacht, the Lady Ghislaine, his fame and fortune had become worthless. The subversive unwillingly faced his Maker. Even in his last moments, death probably sparked no fear. Having suffered a heart attack while urinating over the side, he clung to the yacht’s railing until, unable to support his twenty stone, the muscles ripped under his arm and he fell dead into the sea. No water was found in his lungs by three Spanish pathologists and no bruises or cuts on his corpse. The heart attack, they concluded, had killed him. His legacy was borne by his children.

After their acquittal, Kevin and Ian Maxwell submerged themselves in a series of international communications and property ventures which ended in losses and occasional bankruptcy but from which, like their father, they always re-emerged. And by now, thirty years later, the Maxwell family would have been forgotten had Ghislaine Maxwell, the youngest of Robert’s seven surviving children, not burst into the spotlight.

At the beginning of 1991, Ghislaine was receiving a monthly income from Maxwell’s Liechtenstein trust through the Bank Leumi in New York. No one has been able to gain access to those Liechtenstein bank accounts or understand the flow of money to Ghislaine. After his death, at least £25 million remained unaccounted for from the debris of the Maxwell empire in New York and a lot more disappeared into unknown bank accounts in tax havens. Some of that money financed Ghislaine Maxwell’s lifestyle. The result was clear. Through her father’s considerable presence in New York, not least through his ownership of the New York Daily News, she had met most of the city’s financiers and power brokers. Liberated by Maxwell’s death, Ghislaine bought a house in Manhattan and burst into New York’s gossip columns as a brash, party-hopping socialite. Among those she met was Jeffrey Epstein, an investment manager for the super-rich. Undoubtedly, her attraction to a magnetic man with unusual sexual habits was influenced by her childhood. Rich, domineering men could seduce her.

Until Ghislaine, then aged thirty, arrived in Tenerife to inspect her father’s yacht after his death, she had been relatively invisible except when she disingenuously congratulated a London policeman after being stopped for drunken driving. Known in the Mirror building as arrogant, she was an aspiring status-seeker, enjoying lunch with Mick Jagger and other celebrities who instantly accepted her father’s invitation. Her life had been dominated by her father’s tyranny.

Betty Maxwell, Ghislaine’s mother, would recall that her youngest daughter had been woefully neglected since her birth in 1961. ‘I was devastated,’ Betty would recall of the occasion when her four-year-old daughter had exclaimed, ‘Mummy, I exist.’

During her childhood, Ghislaine had witnessed her father’s merciless bullying, especially at the family’s regular Sunday lunches. Maxwell would question his children about world affairs. In the event that they made a mistake, the meal was interrupted while he physically beat the errant child in front of the others. ‘Bob would shout and threaten and rant at the children until they were reduced to pulp,’ Betty Maxwell wrote about her husband after his death. If a comment in a school report was not perfect, Maxwell caned the child. ‘Remember the three C’s,’ he growled, ‘Concentration, Consideration and Conciseness.’ Ghislaine could expect little protection from her mother even in front of her friends at her birthday party. Betty, who had met Robert during the liberation of France in 1944, collaborated with the beatings of her children just as she connived in her husband’s financial crimes. Except that Maxwell could be particularly protective towards his daughter.