Well, This Explains a Lot

Rendered glassy-eyed by those dense, lawyerly annual reports that land with a thud in your mailbox every spring? You are not alone.

Turns out that some very sharp, well-educated experts can be, too.

Take Marie-Josee Kravis, for example. She is a senior fellow and board member of the Hudson Institute, the conservative, free-market think tank. She was a member of the bilateral dispute settlement board that implemented a free-trade agreement between the U.S. and Canada. She was formerly a member of the Quebec government's committee on financial institutions.

Kravis, the wife of the financier Henry Kravis, was also a director of Hollinger International for a decade, until the Canadian newspaper company collapsed amid a massive fraud investigation involving its founder, Conrad Black.

Black is now on trial in U.S. District Court in Chicago, accused of pocketing $60 million in payments intended to keep him from competing against newspapers that Hollinger sold to others. Prosecutors say those payments rightfully belonged to Hollinger and its shareholders, not to Black and his colleagues.

Kravis testified today that she hadn't spotted a few red flags in Hollinger's routine filings that might have helped her to discover and expose the questionable payments.

The payments were disclosed in an annual mailing to shareholders in 2002, but Kravis testified she hadn't read the document fully.

Last week, Kravis testified that board members did not know details of many of the payments the company made to Black, and did not approve them.

That level of passivity or lack of curiosity among board members puzzled Black's lawyer, Edward Greenspan, among others.

"Nobody prevented you from asking questions at any time about any of this. But you didn't?" he asked in court.

"Correct," Kravis answered.

by Mark Stein