Dual Loyalties

My opinion on the people who shape our world

Monday, April 04, 2005

Richard Perle, Neocom Darling Is In Trouble With the SEC

Shining Light in Dark Corners: "Richard Perle, Neocom Darling Is In Trouble With the SEC
Perle is one of the architects of the Iraqi invasion and has been agitating about invading Iran. I suspect we will see an attempt by the Bush administration to quash this lawsuit for Bush's corrupt advisor.

Perle is close with Paul Wolfowitz and Douglas Feith, the man who quietly left the Administration when the FBI investigated whether he was passing classified information through unofficial channels to the Israeli's through his involvement in the American-Israel Public Affairs Committee. As Chairman of the Defence Policy Advisory Board, appointed by Rumsfeld in 2001, Perle was involved in an obvious conflict of interest where his former employer was seeking to leverage Homeland Security contracts with Perle's help.

This time, unless Bush can protect him, Perle may be over his head.

The Globe and Mail: SEC may sue Perle over Hollinger

According to an investigation by a special committee of Hollinger International's board last year, Mr. Perle admitted that he signed off on many of the transactions without reading the documents. In a report, the committee sharply criticized Mr. Perle as a "faithless fiduciary" whose "head-in-the-sand behaviour" breached his duty to protect shareholders. The committee also found that Mr. Perle and an affiliated company pocketed more than $7-million in compensation and investments from Hollinger International and a subsidiary. Mr. Perle has denied that his Hollinger benefits had any influence on his decisions as a director. Hollinger International officials, shareholders and the SEC allege that Lord Black and Mr. Radler wrongfully diverted proceeds from the sale of some of the chain's newspapers for their personal use. Mr. Perle said he never profited from the Hollinger deals that investigators have scrutinized.
Complete Article

SEC May Sue Perle Over Hollinger

By OTIS BILODEAU AND PETER ROBISON

Thursday, March 24, 2005 Page B3

Bloomberg, with files from staff

The U.S. Securities and Exchange Commission has warned former Pentagon adviser Richard Perle that it may sue him for his role in the alleged looting of Hollinger International Inc., the Chicago-based media company once controlled by Richard Perle.

Mr. Perle, 63, a Hollinger director, said in a telephone interview that he received and responded to a so-called Wells notice, a formal warning that the agency's enforcement staff has determined that evidence of wrongdoing is sufficient to bring a civil lawsuit.

The enforcement staff, which has reviewed Mr. Perle's response, plans to urge the SEC's commissioners to authorize a suit against him, according to people familiar with the matter.

"We did receive a notice some months ago and we responded at some length," said Mr. Perle, who was the leading architect of U.S. nuclear arms-control policy as assistant secretary of defence from 1981 to 1987, during the administration of president Ronald Reagan. In the 2000 presidential campaign, Mr. Perle was foreign policy adviser to George W. Bush.

If the SEC proceeds with a suit against Mr. Perle, it will mark one of the first times that the regulator has targeted a corporate director of a major company for allegedly failing to protect shareholder interests.

Mr. Perle played a key role on Hollinger International's board as a member of its executive committee with Lord Black and his long-time deputy David Radler. The committee approved a number of controversial transactions that enriched Lord Black and Mr. Radler and are the target of a number of criminal and civil investigations in the United States and Canada.

According to an investigation by a special committee of Hollinger International's board last year, Mr. Perle admitted that he signed off on many of the transactions without reading the documents.

In a report, the committee sharply criticized Mr. Perle as a "faithless fiduciary" whose "head-in-the-sand behaviour" breached his duty to protect shareholders.

The committee also found that Mr. Perle and an affiliated company pocketed more than $7-million in compensation and investments from Hollinger International and a subsidiary.

Mr. Perle has denied that his Hollinger benefits had any influence on his decisions as a director.

Hollinger International officials, shareholders and the SEC allege that Lord Black and Mr. Radler wrongfully diverted proceeds from the sale of some of the chain's newspapers for their personal use.

Mr. Perle said he never profited from the Hollinger deals that investigators have scrutinized.

"I didn't benefit from any of the transactions that they looked at," Mr. Perle said.

Mr. Perle said he didn't recall the specific allegations in the SEC's notice, and he referred questions about them to his lawyer, who didn't respond to requests for comment.

A final decision by the five SEC commissioners on whether to sue may come within two months, a person familiar with the warning to Mr. Perle said. The person didn't say what allegations were made in the Wells notice nor what accusations that a suit, if filed, might make against Mr. Perle.

The board at Hollinger International ousted Lord Black in January, 2004. The company later sued him, saying in a report issued in August that he and other top executives looted the company of more than $400-million over seven years.

Mr. Perle remains on the Hollinger International board.

The SEC in November sued Lord Black, Mr. Radler and Hollinger Inc., the Toronto-based company Lord Black used to control Hollinger International, for fraud. On another legal front in the Hollinger story, a U.S. District court in Chicago barred the SEC from handing over to Lord Black certain unidentified evidence until it issued a final verdict on the matter. The unusual order, which was given at a closed court session, was triggered by a request from the U.S. Attorney in Chicago, which revealed for the first time Tuesday that it was investigating whether fraud occurred when Lord Black and other associates pocketed tens of millions of dollars from his core U.S. newspaper company Hollinger International Inc."

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