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THE TRIAL OF Introduction The verdicts are in, and the future is many enemies for the prosecution that Focus This month we somewhat unclear. One thing, however, led to yesterday’s guilty verdicts. He report on the trial is certain. Conrad Black—Lord Black of condemns the U.S. justice system for a and conviction Crossharbour—has fallen a long way. ‘vicious and relentless’ inquisition. He of Lord Black of A convicted felon, Black faces a sentence fingered his first accuser, former U.S. Crossharbour on of up to 35 years in jail. He remains free securities regulator Richard Breeden, as charges of on $21-million bail, but is restricted to a corporate-governance ‘zealot.’ And he and obstruction living in either the Chicago area (where has cast his rebellious shareholders as of justice in a Chicago court. he will be sentenced) or in his Palm ‘ingrates’ and ‘terrorists.’ After a spectacular Beach, Florida, home. “The one person Lord Black seems business career, A former Canadian who gave up genetically incapable of blaming is Black finds himself his citizenship for a British honour, himself. For the sad truth is, he was his an exile from Black may never be able to return to own worst enemy. Had he simply folded facing a his home. His conviction will his losing hand when shareholders of long sentence as a prisoner in a U.S. likely prevent him from ever being Hollinger International Inc. first called jail. This News in able to regain his Canadian citizenship. him a ‘thief’ in 2002, Lord Black would Review module Hundreds of people have already begun a probably not be facing the humiliation of explains some of campaign to revoke his prison.” the reasons why (only two people have so far had their According to McNish, it was Black’s this has happened. membership revoked). pride that made it almost impossible His major business enterprises are in for him to avoid a good fight. He had tatters. His personal assets are frozen. battled with shareholders and employees Further Research U.S. government prosecutors are throughout his career. He never admitted A detailed timeline seeking the forfeiture of his Palm Beach any wrongdoing. And, she writes, “. . . of major events in property as well as his ownership interest he enriched a generation of libel lawyers the life of Conrad Black can be found in the company he was convicted of with a furious barrage of defamation on the CBC Web defrauding. lawsuits against anyone who accused site at www.cbc.ca/ During his trial, more than a dozen him of wrongdoing.” Ultimately, this news/background/ lawsuits against Black were put on kind of behaviour probably forced the black_conrad/ hold. These will now resume, and justice system to go after him. timeline.html. they include serious cases involving Black’s trial became a spectacle for the Securities Commission Canadians who watched his career and the U.S. Securities and Exchange for decades with fascination, if not Commission. The biggest civil lawsuit always with admiration. He had built —for $542-million—was brought by an international newspaper empire that Sun Times Media (formerly Hollinger gave him entry to the highest reaches of International). It involves issues identical society at home and abroad. Unhappy to those for which Black and other with the political leanings of most executives were facing charges in the Canadian newspapers, he founded the criminal trial. to give a strong voice to How could this happen? Canada’s conservatives. Himself a writer, In a devastating article in The Globe he was respected for his biographies of and Mail (July 14, 2007), Jacquie and Franklin Delano McNish gave a one-word answer: pride. Roosevelt (his recent biography of She wrote: “Conrad Black has blamed was perhaps somewhat

CBC News in Review • September 2007 • Page  less successful). Black and his wife stands much of a chance. Most expect Did you know . . . (also a writer) maintained that he faces somewhere between five Out of the more than 5 500 Order elaborate homes in Toronto, London, and and 10 years in prison. of Canada honours Palm Beach. Even should the appeal succeed, the awarded over Some Canadians felt a little bit legal battles will continue. the last 40 years, of schadenfreude when the guilty Lawsuits and legal fees will eat away only two have verdicts were announced. But polls at what is left of Black’s corporate been rescinded: have indicated that the majority, while empire—and likely a good part of his aboriginal leader David Ahenakew unsurprised, were saddened by the news. personal fortune as well. All in all, a for anti-Semitic It’s a good thing that Conrad Black sad ending to a notable—and often comments and loves a good fight. Few legal experts notorious—career. hockey lawyer think his appeal in the criminal case Alan Eagleson after his conviction For Discussion on fraud charges. In 1990, Conrad Black received one of Canada’s most prestigious awards, membership in the Order of Canada (www.gg.ca/honours/nat-ord/oc/index_ e.asp). A movement is underway to strip him of this honour; the advisory council Definition on the Order of Canada to the Governor General is expected to discuss his award Schadenfreude is a this fall. In your opinion, does his conviction in a U.S. court on fraud charges very useful German justify taking away his membership? If it does, should the advisory council wait word that has no until the appeal process is completed? exact equivalent in English. The Canadian Oxford Dictionary defines it as “the malicious enjoyment of another’s misfortunes.”

CBC News in Review • September 2007 • Page  THE TRIAL OF CONRAD BLACK Video Review

Answer the following questions in the spaces provided. Quote “Greed is a motive 1. Name the first newspaper that Conrad Black acquired. ______that has not failed to move 2. What was “his first big corporate prize”? ______me.” — Conrad Black, quoted in How much was it worth? ______the National Post September 1, 2004 3. Which of Black’s special interests turned into “a stage-managed metaphor for his career”?

Did you know . . . Conrad Black spearheaded fundraising to 4. Why was ownership of the London Daily Telegraph so important to Black? complete the largest Canadian war memorial in Britain. The 5. How many newspapers did Black’s company own at the height of his Canada Memorial career? ______sits near Buckingham Palace 6. Which national newspaper did Black found in Canada? ______and is a tribute to Canada’s efforts to 7. What did Black have to give up in order to become a member of Britain’s help Britain in two ? world wars. Today the memorial is in disrepair, and Black is unable to fund 8. What would it have cost Black to settle his dispute with the board of its restoration. directors of Hollinger International? ______

9. Who gave key evidence against Black during his trial? What was his relationship to Black?

10. What does a newspaper owner guarantee when he sells a newspaper and receives a non-compete payment?

11. Black finally faced a total of 13 different counts or criminal charges. Of how many was he found guilty? ______

12. What step has Black already taken as part of his appeal process?

CBC News in Review • September 2007 • Page  THE TRIAL OF CONRAD BLACK The Charges

Few observers would doubt that the included a party that Black threw for Further Research The charges U.S. government prosecutors, when they his wife Barbara Amiel’s 60th birthday, against Black filed their charges, were out to make costing about $65 000. Black had are outlined in an example of Conrad Black. Black Hollinger pick up part of the tab, calling greater detail at was originally indicted on a total of 14 it as much a business gathering as a www.cbc.ca/news/ criminal counts. If convicted on all of personal function. The second example background/black_ them, he faced a total of up to 101 years was the use of a company jet to fly the conrad/charges. in prison and $164-million in fines. He couple to a private holiday on Bora Bora. html. would also have to forfeit up to The third example involved the purchase $92-million in assets. by Black of his New York apartment Did you know . . . One charge against Black—that of from Hollinger International. The Hollinger money laundering—was dropped during prosecutors alleged that the apartment, International is the trial. The remaining 13 fell into purchased by Black for $3-million, was the American several categories. intentionally grossly undervalued. (When corporation whose the apartment was sold in October 2005, stockholders’ Non-Compete Agreements the Chicago U.S. Attorney seized the $9- accusations against million proceeds from the sale.) Black led to the The bulk of the charges related to non- filing of U.S. compete payments made to Black and criminal charges. two other defendants. Non-compete Tax Fraud However, Hollinger payments are not uncommon in the Black and the three other defendants Inc. is a Canadian newspaper industry. When a newspaper were also charged with tax fraud related holding company is sold, the new owner will often seek to Hollinger International’s 1999 and that Black and an agreement that prevents the seller 2000 tax returns. Both charges accuse his associates own, and that from starting another paper in the same the defendants of underreporting the holds a majority market. To obtain this agreement, the corporation’s income by several million voting interest purchaser will agree to pay an additional dollars. in Hollinger sum to the seller as a non-compete International. payment. Obstruction of Justice What was uncommon in the cases The charge of obstruction of justice cited by the prosecutors was the recipient related to a notorious incident actually of the non-compete payments. In non- captured on camera. On May 20, 2005, compete agreements, the compensation Black, his chauffeur, and his personal almost always goes to the company (and assistant removed 13 boxes of papers thus, ultimately, to all its shareholders). from Hollinger Inc.’s offices in Toronto. In these cases, some of the money As they worked, they were photographed went directly to Black and some of his by a surveillance camera. Photographs associates. The total amount of money of the team carrying out the boxes soon involved in the non-compete payments in appeared in several newspapers. question totalled $80-million. At the time of the removal, an Ontario court order was in effect forbidding Abusing Company Perks Black’s taking any papers from the Black was also charged with using building. A U.S. subpoena of the papers company funds for personal purposes. was also pending. Black returned the Three examples were highlighted. These boxes within a matter of days, but

CBC News in Review • September 2007 • Page  prosecutors decided to proceed with that Black saw Hollinger International Did you know . . . the charge. With a maximum penalty of as a regular source of fraudulent funds Conrad Black was expelled from the 20 years in prison and a $250 000 fine, for himself and certain associates. prestigious Upper this was one of the most serious charges The indictment listed seven separate Canada College in faced by Black. examples that, it was argued, established 1959 for stealing the necessary pattern of behaviour. and then selling Racketeering With the exception of obstruction of examinations. He The racketeering charge was considered justice and racketeering, the charges allegedly earned $1500. as serious as obstruction of justice (the all were filed as either mail fraud or same maximum penalty) but more wire fraud. This means that the charges difficult to prove. Racketeering requires alleged that the U.S. Mails or different Did you know . . . prosecutors to demonstrate a regular wire services had been used for interstate Black was not tried pattern of criminal behaviour on the part or international transfers of documents alone but shared of a defendant. The prosecution alleged or funds related to various fraudulent charges with activities. Jack Boultbee, Peter Atkinson, For Discussion and Mark Kipnis. Some commentators felt that the prosecution was filing an excessive number of All three were charges in an attempt to convince potential jurors that where there was so much also found guilty of some of the smoke there had to be at least some fires. One charge was withdrawn before charges. trial and another dropped just before the prosecution rested its case. In the light of the ultimate result—four convictions on 13 charges— would you agree that this was likely the prosecution strategy? In your view, would the prosecution have been more or less successful if it had focused on fewer charges? Explain.

CBC News in Review • September 2007 • Page 10 THE TRIAL OF CONRAD BLACK The Prosecution Strategy

The indictment against Black and the of mail fraud, to which he pleaded Quote: “Bank robbers use other Hollinger International defendants guilty. The resulting sentence would masks and carry was brought by , one be a maximum of 29 months in prison guns. These four of the most famous U.S. Attorneys. Just and a fine of $250 000. The prosecutors dressed in ties and prior to the trial, Fitzgerald had won also agreed that they would not object wore suits.” — the government’s case against Lewis to Radler’s application to serve his time Prosecutor Jeffrey Libby, an important official in the Bush in Canada, which should actually result Cramer, quoted administration who had been accused in a much shorter time in jail. He also in , July 14, 2007 of lying in his testimony to a U.S. repaid to Hollinger $8.65-million that grand jury. Fitzgerald had also led the he had received from the non-compete successful prosecution of several other agreements. Radler is to be sentenced on corporate executives accused of fraud in December 10, 2007. Further Research An excellent their business dealings. Radler testified that Black was the introduction to Though Fitzgerald brought the man behind the idea to use non-compete the career and charges, he did not personally prosecute agreements to generate extra cash for the the role of Patrick the case. Instead, he selected a team two newspaper executives. According Fitzgerald in of young attorneys to handle the to Radler, in a January 1999 phone call, the Black trial is courtroom work. The team was led by Black first suggested that 25 per cent available from Eric Sussman, an eight-year veteran with of a non-compete payment should go Maclean’s at www.macleans. the Justice Department. He was assisted to Hollinger Inc., the parent company ca/homepage/ by three other lawyers. Perhaps the most of Hollinger International, which Black magazine/article. notable of these was Julie Ruder, who made controlled. jsp?content= such a strong impact on the jury during According to Radler, it was in August 20070312_103133_ her cross-examination of witnesses 2000 that Black and Radler decided 103133. that Sussman selected her to lead the to add themselves to future non- prosecution’s summing up. compete agreements. This was after purchased $3.2-billion worth David Radler of Hollinger newspapers and asked for Many observers believed that the individual non-compete agreements testimony of David Radler, Conrad with Black and Radler. Each received Black’s closest associate, would $19-million as part of the deal. After be critical to the success of the this, their names began to appear in all prosecution’s case. Radler had worked non-compete deals involving Hollinger with Black since their first investment International. in newspapers with the purchase of the Radler’s testimony was important to Daily Record in the 1960s. the prosecution’s case, but they did not Together they built what became a huge believe it to be critical. In their closing newspaper empire. arguments, the prosecution stated to the Like Black, Radler was charged jurors that they “do not need to believe with several counts of fraud by the a word David Radler told you to convict U.S. Justice department. Unlike Black, every single one of these defendants” however, Radler arranged a plea bargain (www.ctv.ca/servlet/ArticleNews/story/ with the U.S. Attorneys. In exchange for CTVNews/20070626/black_trial_ his testimony against Black, Radler’s 070626/20070626/). charges were reduced to a single count

CBC News in Review • September 2007 • Page 11 Obstruction Mike Reed, Lloyd Case, and David Quote Paxton own and run several dozen “He suggested that One major charge gave the prosecution we insert ourselves great confidence: obstruction of justice. small-town newspapers across the U.S. into the non- The camera evidence was undeniable: All purchased papers from Hollinger compete process Black on film removing files from his International, and all were asked to and I agreed.” former offices at a time when he was pay a portion of the non-compete fees — David Radler, under a court order not to do so. The that normally would go to Hollinger quoted in The testimony of his personal assistant, to individuals, including Black. As Globe and Mail, May 9, 2007 Joan Maida, that the removal did not Reed testified, “It just didn’t seem like intentionally constitute obstruction the right thing to do. . . . We did not because the papers were all personal was view these individuals as potential unconvincing. Almost all professional competitors” (The Globe and Mail, July trial observers felt that this one charge 14, 2007). Black, three other executives, would be very difficult for Black to and Hollinger Inc. received a total of overcome. $30-million as a result of these deals. In her closing argument, Julie Ruder Non-Competes emphasized these three non-competes. But the heart of the case against Black “The buyers didn’t request it. The case is and the other defendants was the use of about why. Why was the money paid?” non-compete agreements for personal (The Globe and Mail, July 14, 2007). enrichment. The testimony of three witnesses involved in the purchase of newspapers from Hollinger International made an especially strong case against Black.

Analysis How would you evaluate the effectiveness of the prosecution strategy? Note any changes that you might suggest.

CBC News in Review • September 2007 • Page 12 THE TRIAL OF CONRAD BLACK The Defence Strategy

As his trial was about to begin, Conrad Discrediting David Radler Black proclaimed his innocence and The defence argued that David Radler predicted a complete victory. “The was the real villain, if any fraudulent charges are nonsense and I am looking activity had actually taken place. Only forward to putting this cataract of horrors Radler’s testimony indicated that Black finally behind me,” he wrote in an e-mail had been the partner who came up with to the Financial Times (March 12, 2007). the idea for inserting individuals into the Black chose two high-powered (and non-competes. The defence argued that it high-priced) lawyers to represent him was far more likely that any wrongdoing during the trial. To the surprise of many at Hollinger was Radler’s responsibility. observers, one of these was a Canadian He, they claimed, was responsible for who had never argued a case in a U.S. the day-to-day operations in Chicago. court. While Black was focused on operations in Eastern Canada and Europe, they said, Radler was responsible for Western The Canadian was Edward Greenspan, Canada and the U.S. (where the alleged one of Canada’s most famous criminal illegal activities had taken place). lawyers. Greenspan has defended a Furthermore, Radler had received number of celebrity clients, such as a sweetheart deal because of his plea former premier Gerald bargain, and this gave him the incentive Regan. He is known as an especially to testify against Black. In his cross- effective cross-examiner. But this was examination of Radler, Greenspan tried his first appearance in a U.S. courtroom, to force him to admit that, just as he and U.S. courts place far less emphasis had lied to prosecutors before he made on verbal argument than Canadian his plea bargain, he was now lying to courts. It seemed to take Greenspan a bit convict Black. While Radler was evasive of time to adapt to the new arena. in some of his testimony, most trial observers felt that the defence failed to Edward Genson totally discredit his testimony. In her Edward Genson was chosen as Black’s instructions to the jury, however, Judge second attorney. Genson is one of Amy St. Eve ordered them to consider Chicago’s top criminal lawyers. He, too, Radler’s testimony “with caution and has defended a number of high-profile great care” (Financial Times, June 28, clients (most recently, he defended 2007). R&B singer R. Kelly against child pornography charges). Genson, who Legitimizing the Non- has a neuromuscular condition that Competes requires him to use an electric scooter, is The defence argued that the non-compete considered “colourful.” He likes to bang agreements, central to the charges against his cane on tables during trials as an Black and the other defendants, were a attention-getting device. normal and appropriate business practice The defence strategy anticipated the in the newspaper industry. In the case of prosecution’s arguments and attempted these particular agreements, they argued to overturn them. that all of them had been disclosed to

CBC News in Review • September 2007 • Page 13 Hollinger International’s auditors and The boxes finally made their way to Did you know . . . authorized by the Hollinger Board of court on May 8. The contents found In May 2005, several members Directors. Several members of the board within them at that time were indeed of the Hollinger testified that they had indeed signed off mostly personal papers such as tax forms International on the payments, although they could not and bank records. board of directors remember actually reading the papers agreed to pay $50- that they had signed. No Testimony by the million to settle a Defendants lawsuit brought by shareholders. The No Obstruction Intended None of the defendants in the trial took lawsuit charged The defence argued that Black had the stand to testify in their own defence. that they had been intended no obstruction of justice when In Black’s case, defence lawyers were derelict in carrying he removed the boxes of files from reported to be especially concerned out their duties. his former office at Hollinger Inc. in that he might come across to jurors as Toronto. Black, they said, believed that pompous and arrogant. Black’s past the Ontario court order did not apply experience as a witness was not positive. to his personal papers, which were all He had previously testified on his own that the boxes contained. When he was behalf in another case that went to trial informed that the order applied to all his in Delaware. The judge handling the papers, he returned them. The defence trial said that he found Black “evasive called Black’s personal assistant, Joan and unreliable. His explanations of key Maida, to testify; however, she became events and of his own motivations do confused on the stand and failed to make not have the ring of truth” (Vanity Fair, the defence’s case. February 2007).

Analysis 1. How would you personally assess the effectiveness of the defence strategy? Identify any changes you would have made.

2. In your view, should defendants be forced to testify during trials? Explain.

CBC News in Review • September 2007 • Page 14 THE TRIAL OF CONRAD BLACK The Verdict

On June 12, Conrad Black and the three On July 10, the jury informed the Quote “I ask you to find other defendants gave up their right to judge that they were having difficulty him not guilty testify in their own defence for the last reaching unanimity on some of the in the name of time. After 47 days of testimony by 21 charges. She asked them to go back justice, in the prosecution witnesses and 13 defence and make another attempt to resolve name of fairness, witnesses, the defence rested its case (the their differences. On July 13, the jury in the name of prosecution rested on May 30). Only finally announced that they had reached equality, and in closing arguments remained before the a verdict on all the charges under the name of equal justice for all. . . . judge, Amy St. Eve, gave the case to the consideration. He is a rich man, jury for their decision. . . . but in America Guilty you do not Closing Arguments The jury found all four defendants convict someone The closing arguments made exactly guilty on three of the charges of mail because they are the points that observers expected. In a fraud. Black was also found guilty of rich.” — Edward Greenspan, quoted seven-hour presentation, prosecutor Julie obstruction of justice. in The Globe and Ruder called Black a liar who stole from The three mail fraud charges were all Mail, June 20, Hollinger International’s shareholders related to the non-compete agreements 2007. because he believed he was above the at the heart of the defence case. Two rules. Ruder urged jurors to ignore the of the charges involved companies that paper trail of documents that indicated had been required to sign agreements Hollinger’s directors signed off on the that diverted money to Black and other transactions. “It doesn’t matter that there defendants despite their owners seeing is a paper trail. So what? That’s not what no valid reason for doing so. this is about. It’s about the ‘why.’ There The third conviction was the result of a was no reason for Hollinger International bizarre non-compete agreement in which shareholders to lose this money” (The Black and his associates collected a non- Globe and Mail, June 19, 2007). compete payment from a small Hollinger In their summing up, the defence subsidiary called American Publishing argued that the prosecution failed to Company. In effect, Black was collecting prove beyond a reasonable doubt that money for agreeing to not compete Black had intended to defraud anyone. against himself. Prosecutors successfully Eddie Greenspan was especially argued that this was intended to disguise contemptuous of the testimony of David the payments so that they would be Radler, whom he referred to as a “serial tax-free, as were all non-competes in liar” who only testified against his Canada. Each mail-fraud charge carries associate Black because he received such a maximum penalty of five years in jail a good deal from the prosecution. and a fine of $250 000. Only Black faced and was convicted Deliberations on the most serious charge: obstruction On June 27, the judge read to the jury of justice. Caught on a security camera 77 pages of instructions and then sent removing materials from his former them off to begin their deliberations. These headquarters, Black had no way of deliberations continued for many days— denying his actions. The defence argued a sign that both the defence and the that he had not intended to do anything prosecution saw as favourable for them. wrong, but was only removing personal

CBC News in Review • September 2007 • Page 15 papers from an office from which he filed a motion with Judge Amy St. Eve Quote was being evicted. The jury found it requesting that she order a new trial. In a Just before the verdict was impossible to accept that argument. separate motion, they asked her to grant rendered, Hugh An obstruction of justice conviction an acquittal, arguing that the government Totten, a Chicago carries a maximum sentence of 20 years failed to prove its case beyond a lawyer and non- in jail and a fine of $250 000. Sentencing reasonable doubt. Few observers expect compete expert on all charges has been scheduled for that either motion will succeed. discussed the Black November 30, 2007. The next step will be to take the appeal case with other legal experts for to the U.S. Court of Appeals, where a Maclean’s. He Appeal three-judge panel will hear the case. If commented on Immediately after the verdict was the appeal is unsuccessful at this stage, the obstruction announced, Black’s lawyers announced it may be reviewed by a full panel of all of justice charge: that he was maintaining his innocence the appeal court’s judges. Should it again “There’s a and would be appealing the decision. fail, the defendant may then request question, I think, in They brought on board Andrew Frey, the U.S. Supreme Court to review the the average jury’s mind: ‘Why would a former deputy solicitor-general with decision. It will probably take a year Conrad Black show the U.S. Department of Justice, to assist or two for the appeal to run its course; up on a weekend, with the appeal. The process began during that period Black may remain free when he’s got on August 27, when Black’s lawyers on bail. a butler and a driver and an Analysis assistant, and then 1. In your view, was the trail of Conrad Black fair? Explain. decide he’d all of a sudden comply 2. What is your personal response to the findings of the jury. Explain fully. with his landlord’s wishes to evict the premises.’” Maclean’s, June 25, 2007

Quote “We move on to the next phase of a long war. We got rid of most of [the charges], and expect to get rid of the rest on appeal.” — Conrad Black, quoted in The Globe and Mail, July 16, 2007

CBC News in Review • September 2007 • Page 16 THE TRIAL OF CONRAD BLACK Activity: The Sentence

What prison sentence do you feel would be appropriate for Conrad Black if his conviction stands?

Even though he is appealing the verdict, Black has been convicted of four crimes and will be sentenced by Judge Amy St. Eve on November 30. The possibility exists that Black, who just turned 63 on August 25, could spend the rest of his life in jail. Each of the three counts of mail fraud of which he was convicted carries a maximum penalty of five years in jail. The obstruction of justice charge has a maximum 20-year penalty. Theoretically, Black could face a 35-year jail term and a $1-million fine.

The prosecution team has stated that they will be seeking a prison term of 15-20 years. The defence has said it will argue that sentences for these kinds of offences are customarily considerably shorter. Judge St. Eve will hear the arguments from both sides and make the final decision. She will also issue a sentencing statement outlining the reasons for her decision. Black is expected to appeal whatever sentence she gives him, just as he is appealing the verdict in the trial.

For the purposes of this exercise, you must decide the total number of years you feel Black should spend in jail for the crimes of which he has been convicted. You should base your decision only on what you have learned about the nature of the crimes themselves and Black’s actions in committing them. Black’s lifestyle and past adventures should not enter into your consideration.

As you ponder your decision, you might bear in mind that, in the U.S., criminals really do serve their time. The most a prisoner can get off for good behaviour is 15 per cent of his or her sentence. Before you write your report, gather in a group with four of five of your peers to discuss your ideas and intentions.

Once you have made your decision, write a brief (one page or less) sentencing report explaining how you arrived at that decision. Be prepared to share your report with your classmates.

Notes:

CBC News in Review • September 2007 • Page 17