Let’s see if I’ve got this straight.
As a member of the Hollinger International board of directors and audit committee, Marie-JosÈ Kravis, wife of Henry R. Kravis of Kohlberg Kravis Roberts fame, approves $60 million in non-compete payments that go to former Hollinger CEO Conrad Black and several of his associates. Given the context in which they were paid, the non-compete payments to Black were not particularly unusual or wrong.
The federal government then decides to prosecute Black and his associates on the theory that they misappropriated the $60 million from Hollinger. Probably in fear that she might also be indicted, Mrs. Kravis tells the feds that she didn’t realize what she was doing in approving the non-compete fees in favor of Black, et. al. The two other members of the audit committee said the same thing.
Subsequently, Mrs. Kravis and other Hollinger directors receive Wells Notices from the SEC for being negligent in approving the non-compete payments for Black. The typical SEC sanction in such manners is a ban from serving as an officer or director of a publicly-owned company, usually for life and at least for five years.
As a result, Mrs. Kravis agrees to testify for the government against Black and admits that she didn’t realize what she was doing in approving the $60 million in non-compete fees in favor of Black and the others.
The SEC then withdraws its Wells Notice to Mrs. Kravis.
So, the SEC threatens to ban Mrs. Kravis from being an officer or director of a publicly-owned corporation because she is an incompetent director, and then withdraws the threat when Mrs. Kravis confirms that she is an incompetent director.
And Conrad Black’s freedom and storied career hangs in the balance.
A truly civil society would not tolerate such a travesty.