Risk & Compliance

SEC Clears Perle in Hollinger Probe

The former Defense Department official won't be charged in connection with the Conrad Black civil suit.
Stephen TaubOctober 24, 2006

Richard Perle is off the hook. The Securities and Exchange Commission told the former defense department official that he will not be face civil charges for his actions as a director of Hollinger International, according to the Associated Press.

Perle was dragged into the case in November 2004 when regulators filed civil fraud charges against former Hollinger chairman and chief executive Conrad Black, alleging Black engaged in undisclosed transactions that benefited him at the expense of his media company, according to AP. In connection with Black’s case, Perle received a so-called Wells notice from the SEC alerting him that he might face civil charges for failing to police Black, reported Bloomberg.

The SEC notification was confirmed by Dennis Block, an attorney for Perle and a partner at Cadwalalder, Wickersham and Taft. “There was absolutely no basis for it,” Block told Bloomberg, which added that Perle was a member of Hollinger’s three-member executive committee, along with Black and former President David Radler, from 1996 to 2003. Perle resigned from the board earlier this year.

The SEC accused Black and Radler of wrongfully diverting proceeds from sales of company newspapers for their personal use, according to the Bloomberg report. Perle, who served on the Pentagon’s advisory Defense Policy Board for 17 years until 2004, received $3.1 million in undisclosed bonuses from Hollinger for running an Internet investment arm called Hollinger Digital, noted Bloomberg. citing a report put together by former SEC Chairman Richard Breeden.

In an interview conducted last year, Perle said he was “blown away” by the report’s accusations, said Bloomberg. The wire service also noted that the Breeden report accused Perle of helping to convince Black to put $2.5 million of Hollinger’s cash into a venture-capital fund in which Perle and Black participated, without seeking board approval. Currently, Perle is a member of several conservative think tanks.