Maxwell: The Final Verdict

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To prove the point, Cowling was shown certificates for 1 million shares in Banco Commercial Portugues. Although owned by BIM, Maxwell had already pledged the shares against a loan. Among other certificates promised was one for 12 million MCC shares ‘lent’ by BIM to LBI. Trachtenberg had pledged those shares with Goldman Sachs and, to cover that discrepancy, he offered a polite letter to Cowling simply stating that LBI ‘held’ the share certificate.

Cowling would return to Cook towards the middle of February: ‘I’ve received all the information I need from LBI. Everything’s fine.’ Since Cook was not an accountant but an administrator, he gladly accepted Cowling’s assurances. ‘It’s miraculous,’ thought Highfield. ‘They say there’s no problem any more.’ He reasoned that after all LBI was staffed by men – Tapley, Donoughue, Ford, Carson and Trachtenberg – of higher qualifications than himself.

Cowling’s only caveat was that he would send a letter to BIM listing the serious problems to be solved. There were, he would write, ‘control deficiencies and weaknesses’ in BIM and confusion because share certificates were kept in Various locations’. He noted a catalogue of errors in BIM’s accounting system and stated that ‘LBI’s systems had collapsed.’ His conclusion was that there was need for a substantive review, ‘due to lack of basic controls’. But he did certify that the pension funds possessed £792 million, adding that the interest earned from lending money to Maxwell was £0.5 million and that ‘this should please the pension fund’. The audit was completed. Maxwell’s special arrangements remained concealed.

Robert Maxwell greeted the news of Cowling’s self-deception by immersing himself among the famous and rich to discuss the world’s problems. Constant travel was not only a distraction from what he still believed were temporary difficulties but immunized him from reality. He flew to Davos in Switzerland to address the World Economic Leaders. After a dinner at the Fluela Hotel, where he reassured the chairman of Crédit Suisse of his empire’s well-being, he basked in the limelight of constant receptions and meals, happily anticipating his own lecture on ‘Acquiring Media in Eastern Europe’. Naturally, when he delivered the lecture, Maxwell did not confess that his own efforts in Berlin, Sofia, Prague, Zagreb and Moscow were proving expensively unprofitable. Instead he boasted about his close relationships with presidents and ministers across the continent, especially with Mikhail Gorbachev. That relationship, cemented in Minneapolis, Minnesota in June 1990 during their joint consecration of the $100 million Gorbachev Maxwell Institute, had propelled Maxwell’s self-esteem to new heights. Although he had unfortunately forgotten to contribute his promised $50 million towards the institute, founded with the lofty intention of uniting the world’s scientists, the pictures and soundbites of Gorbachev praising Maxwell and warmly shaking his hand had been profitably flashed by satellite around the globe.

That impression of influence was the reason for the request by Yitzhak Shamir, Israel’s prime minister, for Maxwell to visit Jerusalem on 12 February. Shamir needed Maxwell’s help in passing a message to Gorbachev about the danger posed by Iraq should the war with Kuwait spread to Israel. The proximity to power and his importance in Israel, where every minister made himself available, gave Maxwell special pleasure. At the end of twenty-four hours of meetings in Jerusalem he flew on to Zagreb to meet Rudi Perpich, in order to finalize preparations for Maxwell’s hoped-for television and newspaper empire in Croatia. Perpich, hired as Croatia’s lobbyist after his defeat in the Minnesota elections, knew how to impress Maxwell. Lunch had been arranged with President Tudjman to celebrate the signing of letters of intent, an encounter which took place on former President Tito’s Mediterranean island, in the breathtaking villa compound. Perpich watched Maxwell’s spirits rise as he savoured the treatment normally accorded to heads of state. By the second day, Perpich was impressed to find that the visitor had, within his first twenty-four hours on the island, learnt sufficient Croatian to speak with the president without an interpreter. On their return flight to London, for Perpich’s benefit Maxwell reflected at length upon his own glory, ignoring the cost of flying 6,000 miles to earn nothing. At £3,500 per hour, the Gulfstream’s journey cost over £90,000 – £50,000 for the flight plus £42,815 for insurance in a war zone.

Maxwell’s distance from reality struck Rupert Murdoch, who had at last fulfilled a long-standing and much postponed visit on 11 February. ‘We are two big publishers,’ Maxwell had boomed on the telephone, ‘and we should talk.’ Murdoch’s secretary had taken the precaution of warning Maxwell that her employer could not be kept waiting and that he had precisely forty minutes before the next appointment. Their recent but rare encounters, thought Murdoch as he ascended to the ninth floor of Maxwell House, had invariably been characterized by Maxwell’s bombast and Murdoch’s teasing response. Ever since he had outwitted Maxwell in 1969 to win the News of the World, Murdoch’s capacity to irritate him had grown.

At ten minutes past four, five minutes into their meeting, Murdoch’s impatience with Maxwell was turning into contempt. With few pauses for breath, Maxwell was boasting about his worldwide diplomacy, especially his intimate relations with the Kremlin and with the leaders of Israel. His self-indulgence had bemused and then silenced his visitor. At the end of forty minutes, Murdoch asked: is there anything else we need to talk about?’

‘No,’ replied Maxwell with a satisfied grin. In his opinion, he had proved his importance to his rival.

As Murdoch descended to the street, he exclaimed, ‘What was all that about? He’s ludicrous.’

Even for Maxwell, the glow was brief. Five days later, at seven o’clock on the morning of 16 February, he was once more sitting in his kitchen, switching television channels while George Wheeler applied L’Oréal to his hair. The Gulf war, one month after the first Allied attacks, dominated the airwaves, especially on Murdoch’s Sky channel. Once again, Maxwell was morose. The previous evening, after landing by helicopter on the roof, he had deliberately stayed away from the cocktail party to mark Richard Baker’s retirement as managing director of MCC: disloyalty was unforgivable. He would also ignore the invitation to Andrew Lloyd Webber’s Berkshire estate that evening to celebrate the composer’s wedding. He struck that idea out of his mind. Betty could go alone. Maxwell’s thoughts were on his journey the following day to Istanbul to meet the president of Turkey. The $40,000 flight would allow him to speak to the president about the country’s participation in the Gulf war for one hour before returning home for dinner with President Zhelev of Bulgaria.

Maxwell’s interest in Bulgaria, that irrelevant and impoverished Balkan people’s republic, was irrational. Although he confided to Sir John Morgan, a former British ambassador who had joined his staff, that he felt sentimental about the country which had helped him during his escape from the Nazis in 1940, his investments in a school for business management, a newspaper, a television station, a hotel chain and a bank were costing millions without any chance of profits. Ognian Doynov, his Bulgarian adviser and a disgraced former member of the Politburo who had replaced Morgan, appeared to some to be encouraging Maxwell’s waste of money. Paid £110,000 annually plus a motor car and free company flat, Doynov could not, however, be blamed for Maxwell’s waning interest in his expensive fantasy. ‘The Bulgarians’, noted Brian Cole, Maxwell’s fixer in that country, ‘did not trust Maxwell. They just wanted his money.’ Among those travelling to Sofia as part of the team to invest MCC’s money was Helen Liddell, a future Labour member of parliament, employed as director of personnel and public affairs at the Scottish Daily Record, part of Mirror Group Newspapers. Maxwell, with Liddell in attendance, paid out millions but received little more than a royal welcome in return.

Maxwell’s reveries about international stardom were disturbed by Kevin, who was about to fly with Anselmini to Zurich on a mission to reassure the bankers that new anxieties about the empire were groundless. Kevin’s solution was radical. More of the empire needed to be sold, he urged, despite the poor prices they might earn. The recent sale of their shares in TFI, the French television station, had prompted, a temporary rise in MCC’s share price – the market had not realized that some of the shares were in fact owned by the Maxwell pension funds. More sales were needed. His father agreed and added another ploy: ‘We’ll have to buy more shares.’ By 19 February, Maxwell officially owned 68.1 per cent of MCC, an increase of about 5 per cent over three months. A genuine market for the shares had practically ceased to exist.

Among those scenting a profit from the dismantlement of the empire was Robert Pirie, the Rothschild Inc. banker blamed by many for his part in the crisis after he had advised on the $2.6 billion purchase of Macmillan. Although Maxwell had insisted in the glory hours of winning the battle that he would never sell any Macmillan asset, the American publisher’s break-up was inevitable. He had begun selling Macmillan assets in December 1989, although the $131 million he received in a public offering for 44 per cent of Berlitz had been a disappointment. This remedy in any case bore a sting: each sale after the Berlitz disposal would attract tax, reducing the proceeds.

On a recent Saturday morning, Pirie had drunk coffee with Maxwell in London. ‘A client wants to buy Pergamon Press,’ he smiled, asking the Publisher whether he would sell.

‘Yes,’ said Maxwell, agreeing that Rothschilds could investigate Pergamon’s accounts on behalf of their client. But before the bank completed their investigation Maxwell told the banker that he was out of the running. The sale of Maxwell’s jewel, the foundation of his fortune, was already under way – codenamed ‘Project Tokyo’ – convincing the dispirited founder of the empire that it was time to contemplate retirement. The purchaser was Elsevier, a Dutch competitor of Pergamon.

The arguments seemed incontrovertible. MCC was suffering from the ‘Max Factor’: his own presence was devaluing his company’s value. Recent resignations had compounded his troubles, and window-dressing was no longer a sufficient cure. Only his retirement would improve the image and the share price.

Kevin’s proposed successor as MCC chairman was Peter Walker, the Conservative member of parliament and former cabinet minister who had earned his millions in the 1960s with Jim Slater. Their controversial partnership had introduced a new era of unit trust investments in Britain, only to culminate in disaster and scandal long after Walker had departed. Walker, however, had secured his fortune and went on to become a successful politician.

The idea of recruiting Walker had first been mooted by Sir Michael Richardson, MCC’s new stockbroker and the chairman of Smith New Court, which also employed Walker. Richardson, who had willingly accepted MCC as a new client after Maxwell had dismissed Laing & Cruickshank for failing to puff his shares, had first dealt with Maxwell twenty-five years before, when he had floated Pergamon shares on the stock exchange. In the decade after the Pergamon scandal in 1969, he had enjoyed only occasional contact with his erstwhile client, but that changed during the 1980s with Maxwell’s resurrection. During those boom years Richardson had established himself in the City’s higher echelons, reputedly becoming close to Margaret Thatcher, and switching to N.M. Rothschild, the bankers, where he earned a fortune. Like so many in the Square Mile, he wanted to believe, when MCC became a client in 1989, that Maxwell was ‘squeaky-clean’. Sensitive, obliging and knighted for his polished performance in the City, Richardson would plead gullibility in the face of Maxwell’s self-salesmanship, coupled with his promise of enormous fees. In recognition of that special relationship, Richardson had given the speech of thanks in 1988 at Maxwell’s grandiose sixty-fifth birthday party for 500 of the great and the good in Oxford – it was ‘the party of the decade’, Richardson had declared extravagantly, before claiming that their relationship with Bob had ‘enriched’ all his guests’ lives.

Peter Walker’s introduction to the Maxwells was undertaken by Richardson, whose admiration for the politician, as for Maxwell, was unconditional: ‘He’s as tough as they come.’ The result had been an invitation for Kevin to dine, on 21 November 1990, at Walker’s home in Cowley Street, Westminster. That evening, Kevin had propositioned the politician to become MCC’s chairman. The notion appealed to Kevin because, as he observed his father’s increasingly erratic performance, he had, with his mother’s encouragement, developed the desire to run the whole show himself. Walker was seriously interested. The two men had found they had enough in common: lean, mean, ambitious, self-admiring and brutally self-interested.

Three months later, at nine o’clock on 12 February 1991, Richardson and Walker visited Robert Maxwell to discuss the terms for what Sir Michael called ‘an ideal solution’. The outline was blessed by Maxwell and, over lunch two days later, Kevin and Walker settled more details. To Kevin, one of the empire’s problems seemed to have been resolved. Walker would be paid £100,000 per year and would, in addition, benefit from the executives’ ‘incentive’ scheme. He was promised, over the following three years, 605,380 MCC shares in three instalments, and he would receive them free. At that date the shares were worth £1,350,000.

Kevin’s thirty-second birthday fell on 20 February. As a treat, he chartered a Falcon jet and invited three other couples to fly at 7.30 in the morning from Heathrow to Venice for lunch, staying overnight at the Pensione Accademia. The cost could be charged to the company because he would briefly attend a board meeting of Panini, a sticker manufacturer which his father had bought in an expansionary fit and which was losing money.

While his son took a break, Robert Maxwell flew to the American southern states, to relaunch his Central European Fund. Within two days he had tired of the seven-day programme, which was costing £140,000 and flew instead to Miami to inspect the Lady Ghislaine after her repairs. Once there, he decided that the new captain was unsuitable. Summoned to the bridge, the American seafarer was fired for dereliction of duty: he and the first officer had been absent from the boat shortly after Maxwell arrived.

Adding to the army of those dismissed caused Maxwell no concern. Once he had tired of people, their departure was convenient. No one, he believed, other than himself, was entitled to any security of employment, an opinion which he probably did not discuss over lunch with Norman Lamont at 11 Downing Street on 27 February – a meeting which the new chancellor of the exchequer could not subsequently find in his diary.

SIX Vanity – March 1991 (#ulink_daf6b7d5-5d5a-5229-a50a-d495afe9d924)

A night-time telephone call from New York on 5 March 1991 pushed Maxwell further into his indulgent fantasy, sending him off on an adventure that would dangerously compound his plight. The caller was Sidney Gruson, a director of Rothschild Inc. and formerly a renowned journalist and editor of the New York Times. Ever since the Macmillan deal, which had netted Rothschilds $17 million in fees (albeit extracted from MCC only after substantial pressure), Gruson had known that Maxwell was ‘fishing for an American newspaper’. At one time, Gruson had started negotiations with the Reverend Sun Myung Moon (founder of the Unification Church, or Moonies) to buy the Washington Times and had flown to London. Going straight to Maxwell’s office from Heathrow, he was greeted by the Publisher’s then personal assistant Andrea Martin: ‘I’m afraid Mr Maxwell cannot see you.’

‘That’s not important,’ replied Gruson. ‘All I want is a men’s room.’

When he emerged, relieved but anticipating either a long wait or a swift return to New York, he found Maxwell in his socks anxiously searching for him. That was Maxwell’s charm – so different from Kevin, characterized by Gruson as ‘an unmitigated shit without his father’s flair’. Plans were completed for the two men to fly to South Korea, the Reverend Moon’s homeland, but the proposed deal collapsed.

Next Gruson had suggested a bid for the National Enquirer, a sensation-seeking tabloid. A team of Maxwell’s ‘experts’ toured the newspaper’s Florida offices and discussed the project at length, only for Maxwell to baulk at the price – in retrospect a missed opportunity, for the profits were enormous. Gruson’s next proposal, the purchase of the New York Daily News, was different. One of three tabloids in New York, the News in its heyday was the nation’s largest daily with a circulation of 2 million. But in March 1991 its staff had been on strike for nearly five months. Although published and sold throughout the dispute by non-unionists, its circulation had collapsed to 300,000 and its advertising revenue had practically disappeared, aggravating its accumulated losses since 1980 of $250 million.

The Tribune company of Chicago, owners of the Daily News, had adopted abrasive tactics which had in Chicago successfully broken the unions’ power. But in New York politicians and even the police, guided by self-interest, had supported the strikers. ‘Stay strong,’ Governor Mario Cuomo urged strikers, who had been burning delivery trucks and intimidating non-strikers. ‘You’re fighting for all of us.’ The problem had been made worse by the naivety of the Tribune company, whose senior executives in Chicago could not understand the ruthless competitiveness of New York’s Jews and mobsters and ignored the reality that New York City was not a suitable location for printing newspapers. Unable to cope with the violence and the daily losses of $700,000, the company’s management had threatened that unless the strike ended by 14 March the newspaper would be closed permanently. Closure, however, would cost an estimated $100 million in redundancy payoffs to the workers.

The Daily News was suffering an illness which Maxwell believed he could cure: overmanning by a rebellious and corrupt labour force, crippling restrictive practices, uncontrolled expenditure, antiquated print machinery and weak management. Over the previous years, he had stayed in contact with Jim Hoge, the News’s erudite and handsome publisher and president, who counted Henry Kissinger among his friends and owned a fashionable Manhattan address. From time to time, Maxwell or Sidney Gruson would discreetly telephone Hoge to ask if the paper was for sale. Politely Hoge would decline their offer.

That changed when the Tribune company issued its ultimatum to the unions and started to look for buyers. Maxwell declared his interest, but told Hoge that he refused to become involved in a competition. His participation would depend upon other bidders leaving the arena. ‘He played it according to Hoyle, the whole way’, remarked Hoge, comparing Maxwell to the bridge master. On 5 March, Gruson gave Maxwell the all-clear. The Tribune company had offered to pay Maxwell $60 million if he took over the liability within ten days. On the same day, Hoge told George McDonald, coordinator of the nine trade unions involved, to telephone Maxwell in London. McDonald, a generous-minded Democrat stalwart, knew that his call was crucial. Without any competing bidders, the newspaper’s existence depended upon Maxwell’s decision. Even McDonald, a seasoned fighter, was nervous when he made that night-time call. Maxwell’s position was potentially powerful and the unionist’s weak. But McDonald’s fears soon dissolved. ‘Do you think it’s worth my while to come?’ was Maxwell’s surprisingly meek response.

‘We’ll give you concessions,’ answered McDonald. Ten minutes later he felt he had achieved more with Maxwell than he had in two years with the Tribune group. Maxwell, he sensed, was hooked. ‘You know,’ he later reflected in his strong New York accent, ‘owning the Daily News is like a visiting card for sheikhs, kings and queens. It opens the door for people and I guessed he wanted it that bad. He could taste it.’

Bestriding an apparently irreconcilable dispute was honey to Maxwell. Not since he had defeated the Mirror Group’s unionists during the 1980s had such an opportunity arisen, and it was in the same city where Rupert Murdoch had lost a fortune before abandoning his attempt to modernize another tabloid, the Post. Nevertheless, a more rational man, confronting such massive and unresolved problems as Maxwell was, might have shied away from new time-consuming tasks at that stage. Maxwell, however, saw the Daily News not as a distraction from his other problems but as a solution to them.

Fresh from plotting his new empire in Eastern Europe (he had flown for a night to Berlin), he began discussing with Ian McIntosh, of the British bank Samuel Montagu, the sale of 49 per cent of Mirror Group Newspapers, insisting that he should receive £500 million in cash. He desperately needed money and hoped that he might raise a better price selling shares in New York. Unfortunately, however, despite his acquisition of Macmillan, he was unknown to American investors. This weakness was mentioned by Charlie McVeigh of Salomon Brothers, chosen after a beauty parade as the project’s New York brokers for the flotation. McVeigh, a ‘handsome goy’, employed as much for his charm as for his talent, was accompanied by Nancy Peretzman, a stylishly dressed, tough investment banker who had caught Maxwell’s eye when she thwarted his bid in 1986 to buy the magazine Scientific American. Together they had stressed the Publisher’s need to overcome his anonymity in Wall Street. Over twenty-four hours, Maxwell calculated that buying the Daily News could solve several problems.

After an emergency session with George Wheeler – Maxwell had spotted a single grey root – he boarded the Gulfstream at six o’clock on Wednesday, 6 March at Farnborough to fly to Whiteplains, New York. His headquarters would be the Waldorf Astoria in Park Avenue rather than the Helmsley Palace on Madison Avenue. During his last visit to the Helmsley there had been a row. His special telephone fittings in the three floors of the presidential suite had been removed by the US Secret Service when the rooms had been occupied by President Bush, and they had not been replaced. Maxwell had exploded, refused to pay his bill and vowed never to return.

As he arrived at the Waldorf more flamboyant than ever, no one could have guessed his financial predicament. Even Maxwell had probably forgotten it somewhere across the Atlantic. To those whom he met over the following three weeks he was ‘Mr $4.4 billion’, a conjured estimate of his wealth. The combination of money and power attracted Americans, most importantly Charles Brombach, the Tribune’s president. Charming Brombach, who had so misjudged New York’s unions, was not a problem for Maxwell. In a pattern which he had repeated on hundreds of previous occasions, he pulled out a copy of his own biography written by Joe Haines, the idolizing Daily Mirror columnist, from the piles which were always stored on his Gulfstream, on his yacht and even in his hotel suite, and presented it as his visiting card, just as he presented the same volume to the heads of every nation which he visited. Unlike the heads of state, the Chicago Brahmin actually read the hagiography and was convinced by its portrait of ‘a great family man, a brilliant entrepreneur and a brave soldier who could bring the unions to heel’. Brombach understood the difference between his own company and Maxwell’s. ‘We were looking at a fifty-year investment. He was sixty-seven years old and wanted to enjoy a piece of his lifetime’s ambition.’ It would be another vanity purchase.

The public announcement of Maxwell’s interest preceded his arrival in New York. ‘I’m negotiating to save the newspaper,’ he boomed soon after touch-down. Although there were only nine days left in which to finalize a deal, he threatened that the unions had just five, until 11 March, to capitulate to his demands. The following morning he met McDonald on the tenth floor of Macmillan’s Manhattan offices. The union leader had already said, ‘Maxwell will not be granted “management rights” but we will of course consider any demands he makes.’ The hint of concessions, albeit limited (the unions were determined to deny the aspiring proprietor the absolute power of hiring and firing), had been music to Maxwell, who had demanded that 800 of the 2,300 employees be dismissed but had rashly conceded, ‘I’m not asking for “management rights”.’

At the meeting, McDonald noticed another sign of weakness when Maxwell announced, ‘I want the paper.’ True to form, their conversation was marked by the tycoon’s particular charm and cordiality, precisely what McDonald had been warned about by a British trade union leader: ‘He’s a scoundrel. Get everything down on paper. He charms the birds off the trees and then shoots them.’ McDonald knew that he had a deal if all nine unions on the paper gave a few concessions for the redundancies which the Tribune company was funding.

The negotiations followed Maxwell’s favoured pattern. Each union was given its own office so that he could shuttle between the fiefs, playing upon old rivalries. This kind of theatre gave him the opportunity to shine – as a printer, a publisher and a professional. ‘I know newspapers and trade unions better than anyone else,’ he told Robert Pirie, once again advising on behalf of Rothschild Inc. ‘Leave the negotiations to me.’ The banker watched Maxwell and Charlie Wilson, quickly flown from London, moving from office to office in a punishing schedule saying ‘yes and no often to things they didn’t understand’.

‘I bet Murdoch couldn’t beat this,’ smirked Maxwell to Hoge for the umpteenth time.

‘These are the concessions you need from the unions to make profits,’ warned Hoge. But Maxwell ignored the advice. ‘He doesn’t analyse,’ grimaced Hoge. ‘He wants the newspaper.’

Maxwell wanted the publicity just as much. Television camera crews and journalists were encouraged to camp in the Macmillan building to await appearances and pronouncements. ‘The progress made was terrific,’ proclaimed a grinning McDonald after the first day. The crisis hit at the weekend when, inevitably, Maxwell reneged on his earlier promises. He said after all that he wanted the ‘management rights’ which the unions had adamantly refused to concede. It was a good moment for Maxwell to play his ace. ‘I’m going back to London now,’ he told the startled negotiators on Saturday evening, 9 March. As he passed through the waiting journalists his parting judgment was intentionally ominous: ‘I’m not so optimistic.’ He added, ‘When I pass a belt, I can’t resist hitting below it.’ This was vintage Maxwell, exhibiting the qualities which a decade earlier had humbled Britain’s print unions.

Yet his return to London on Saturday night was not really an example of astute tactics. Rather, it was under the orders of Kevin. Maxwell was obliged, said his son, to attend Betty’s seventieth birthday party. For weeks his diary had included the engagement, embellished with an instruction in capitals to ‘KEEP FREE’. He had already missed the family dinner that evening in Oxford.

One hundred and fifty guests had been invited to ‘Betty Maxwell’s Special Birthday’ in the Dorchester Hotel’s Orchid Room. Included among the throng were the Duke of Bedford and Lords Forte, Sieff, Stevens, Weidenfeld and Young. Other well-known City celebrities were Eric Sheinberg, Richard Branson and Sirs Kit McMahon, Alastair Morton, Frank Roberts and Michael Richardson. Among the more controversial guests were Jean Baddeley, Sir Edward du Cann, Lady Duncan-Sandys, Vivien Duffield, Joe Haines, Lady Porter and Gerald Ronson. The most expensive guest was Boris Pankin, then the Soviet ambassador in Prague. His account for staying overnight at the hotel, paid by MCC, would amount to £2,011.

The family had attempted to inject humour into the celebration, although others would remark on the gauche taste. Each of the ten tables was named after one of the houses inhabited by the Maxwells in London, Oxford and France, and not forgetting the Lady Ghislaine. The main course was Lamb Meynard (Betty’s maiden name) served with Légumes du Maurier (Maxwell’s adopted name when he met Betty). The wines, costing £95 per bottle, were grand cru. The £250,000 dinner, to be paid for by MCC, was certain to be memorable – but not in the manner Betty’s children had intended.

Arriving late, Maxwell appeared distinctly uncomfortable. As he mingled with his guests, he made little effort to pretend he was enjoying the occasion. His presents to Betty – jewellery and an elegantly bound book describing their life – had been arranged without his knowledge by someone else. After picking at his food, constantly glancing at his watch and ignoring his wife, Maxwell rose. While his guests were still eating, Maxwell began uttering a short speech about his negotiations in New York, practically forgetting his wife. ‘I’ve now got to leave for New York,’ he ended, already walking towards the door, abandoning his guests and family with their forks in mid-air and their mouths open in astonishment. With barely a farewell, he walked through the exit. He would neither wait for the dance nor see the midnight trumpet fanfare with the champagne toast. His wife could cut her birthday cake without him. She could make her own speech without him. He did not care that she was upset. Betty was his doormat. And she would sleep the night in the hotel – she was not welcome in his penthouse.

Outside, in Park Lane, Maxwell fumed, not about the wretched affair he had left behind but about his temporary chauffeur. He needed to reach the Battersea heliport before it closed and had no confidence in the man. Cursing, he abandoned the hapless chauffeur on the pavement, heaved himself into the driving seat and sped furiously towards the river. Within the hour he was flying back to New York. The thought that he could have flown on Concorde the following morning and so not have missed anything did not occur to him.

During that seven-hour flight he could muse on his new adventure. Owning the newspaper would be compensation for other recently failed ambitions. He had considered buying Paramount Pictures, and one year before had even bid for Sears Tower in Chicago. After a weekend’s negotiation, it had become clear that his sole interest was in securing a name-change for one of the world’s tallest buildings. ‘If I buy this,’ he had said, ‘it must be a condition that it will be renamed Maxwell Towers.’ Shortage of money had eventually curtailed the negotiations. But this time he would succeed. Here was a deal made in heaven: he would acquire a newspaper, and not only for nothing – he would actually be paid for assuming the ownership. He knew he would still be losing $1 million every week thereafter but the prize, the fame and $60 million in cash was too great to ignore. He needed that money badly even if he would soon need to pay it to the print workers.

During his absence, Charlie Wilson had continued the negotiations, alleviating fears that Maxwell might back out. They’re rewriting what we don’t like,’ McDonald reported to his colleagues. Maxwell’s bluff had been called when the union leader had telephoned London: ‘Come back. We’re still talking.’

Maxwell’s eagerness disturbed Hoge. ‘You’re giving too much away,’ he warned. ‘You’re throwing away money on overtime. If you don’t fight hard now, you’ll lose.’

Maxwell was uninterested. ‘Yes, yes,’ he smirked condescendingly. ‘Don’t worry. I know my business.’ He would renegotiate later, he reckoned. Getting the newspaper was all that mattered.

By then, gauging precisely how to impress New York, Maxwell had ordered the Lady Ghislaine to speed from Miami and moor on the marina by New York’s 34th Street, not far from the United Nations building. Ranked as he was by Forbes magazine as Britain’s sixth richest citizen personally worth £1.2 billion, his yacht – like his Oxford mansion – confirmed that Maxwell ‘lived like a king with kings’. In this floating headquarters, Maxwell dreamt of entertaining the emperors of America’s media: men like Steve Ross, Larry Tisch and Ochs Sulzberger. In the event his first guest on board was Jim Hoge, the News’s publisher and president. ‘I am going to buy your newspaper,’ boomed Maxwell standing in stockinged feet to protect the thick-pile white carpet. ‘A whore’s rug,’ mused Hoge, who was nevertheless, like even the most hard-boiled New Yorkers, impressed by the vessel. ‘Maxwell’s walk-out didn’t work,’ he later observed. The Publisher would do anything to get the paper. The unions knew that he wouldn’t walk away.

On Monday morning, 11 March, the day of his self-imposed deadline, Maxwell sat across the negotiating table from Steve Ratner of Lazards, who had vouched to the Tribune company for his probity after consulting Bob Pirie of Rothschilds. In the Publisher’s absence they had been negotiating the Tribune’s payment to him. Pirie’s demands, made amid paroxysms of emotion, had bounced off Ratner’s array of cold calculations. ‘We want $70 million,’ burbled Pirie. ‘No way. $65 million is final,’ replied Ratner, knowing full well that the Tribune would indeed pay the extra $5 million to clinch a sale. Maxwell agreed to extend the deadline. Two days later, despite his passionate rhetoric, Pirie surrendered. Maxwell always demanded sycophants as advisers, and Pirie, keen to remain on the gravy train, failed to restrain his client’s own excitement. Ratner and the Tribune executives smiled at Pirie’s failure to get the last $5 million. Fed by his regular walks through the Macmillan lobby, surrounded by eager journalists and waving television cameras, Maxwell became infected by his own prominence and gradually lost the freedom to say the deal was off. The deal with the Tribune was only half the battle. Next, he needed to conclude the employment contracts with the trade unions.

At 11 p.m. on the 13th as Maxwell sat exhausted on the Lady Ghislaine drinking, unusually for him, vodka and orange, McDonald rang. ‘If we don’t sign tonight,’ he said, ‘it’s all off.’

‘Come down,’ said Maxwell, visibly not at his best when McDonald walked shoeless into the state room. For once the Publisher showed no appetite for attempting a last squeeze of the lemon. Thirty minutes later he clinched a deal which supposedly saved $72 million a year on costs. But he lost on critical issues. It was, McDonald would admit, ‘not the best he could have won. Maxwell could have got more concessions. We weren’t hurt as much as we might have been.’

Ratner was less diplomatic: ‘He was so arrogant and unreceptive to advice. He could have got a much better deal if he had driven harder. He lost tens of millions.’

‘We’re in danger of soon making a profit,’ Maxwell said with a smile as he approached waiting newsmen in the lobby of the Daily News building on 42nd Street. His red bowtie glowed incongruously below the plebeian blue Daily News baseball cap, artfully jammed on to his head. In classic Maxwell-speak, he announced a deal which was ‘historical and unprecedented’. Watching from the side as Maxwell basked in the publicity, Hoge understood the new owner’s motives as he stood amid cheering and weeping News employees. Maxwell then led the jubilant, ever growing throng towards the printing presses. The headline was already set. ‘Roll ‘Em!’ screamed his newest acquisition. As, with a great fanfare, he pressed the button to print 1 million copies, the headline was changed to ‘Cap’n Bob bites the Big Apple’. They were genuinely dancing in 42nd Street that night – on the pavements, in the road itself and on the delivery trucks. ‘Let’s see if Murdoch can beat this,’ shouted Maxwell, enraptured by the enthusiasm.

With the cheers still ringing, he was next led along Third Avenue by Pirie to Mr Fu’s, the ‘best Chinese restaurant in town’. As he sat down to spicy fish, John Lindsay, a former city mayor, led the applause for the man who had saved the News.

By daybreak, Maxwell was the news. ‘Brit saves Daily News’, blared a rival’s headline as the Great Saviour allowed himself to be sucked into a rapacious publicity machine. Every television and radio station beamed his voice across the city as he declared his love for New York, just as on earlier occasions he had expressed his love for Holland, Canada, Russia and Israel. Over the following six months, he pledged, he would remain as a ‘hands-on’ publisher. Maxwell, the star, was surrounded by genuine admirers. It was a glorious moment for him.

The previous night, John Campi, the newspaper’s energetic publicity director, had told Maxwell, ‘I want you at nine a.m. at the News stand outside 42nd Street. I’ll collect you from the boat. If you don’t turn up for this, the press will never show up again.’ With unusual punctuality, the Publisher arrived, donned a News hat once again and played to the hundreds who appeared. ‘Go, Maxwell!’ they yelled as autograph hunters thrust newspapers under his nose and women begged to get near the city’s latest hero. ‘I’ve been with celebrities all my life,’ thought Campi, ‘but this is big. He’s the biggest ticket.’

New Yorkers are not easily impressed, yet few remained unswayed by the Briton’s style. Living on board the Lady Ghislaine, Maxwell was repeatedly featured on television news programmes in whatever pose he desired: the mega-tycoon, interrupted by phone calls, receiving a parade of shoeless guests in the splendid state room bedecked with photographs of himself greeting world leaders. As the city bosses paid their respects, he was not averse to comparisons with Randolph Hearst. His presence was felt, and nowhere was it bigger than on his own newspaper’s front page, where – in all seriousness – he declared himself to be ‘a peacemaker’.

Once back inside the News building, the returning strikers discovered that the joviality was strictly confined to the streets outside. Lex Maxwelliana now ruled. Telephone operators were cursed for failing to man the switchboard twenty-four hours a day. Others were cursed for failing to leave their posts and greet their new employer. Among the first to be fired were 130 security men, spluttering bewilderment about who would protect the middle management from the ire of the returning strikers. Little did they realize that the managers were the next in line to be fired. The peacemaker’s presence was abruptly imposed: ‘When I call, I require instant service.’ Somewhere from beyond a voice counselled, ‘When Maxwell shouts “jump”, just ask, “how high?”’

‘Bob, you’ve lost the very people who can help you,’ sighed Hoge, who had decided weeks earlier to resign. His employer was oblivious to all but one mantra: ‘I bet Murdoch couldn’t have done this.’ To underline his challenge, Charlie Wilson was ordered to launch a new newspaper in New York, the Racing Times, to compete with Murdoch’s Racing Form. The gambler was going for broke.

Meetings, orders, summonses and declarations poured forth from a man whose task was herculean. Restoring a newspaper’s morale, motivation and style required the energy and leadership which were Maxwell’s forte. This was a rerun of the Daily Mirror in 1984, a challenge which only Maxwell was either sufficiently courageous or foolhardy to undertake. With time and money, he was sure of success. Juggling had always eventually proved profitable.

In the first days the omens were not good. Important writers were still deserting; advertising revenue remained poor; and the value of the Tribune’s shares zoomed up by $1 billion just for having paid Maxwell $65 million to get rid of the problem newspaper.

Only gradually would Maxwell realize that this was not Britain: that his ban on overtime would need to be revoked; that the replacement for the managers would need to be ex-union men; that the newspaper’s distribution was controlled by the Mob; and that, unless he remained in New York, his revolution would dissipate. All that was ignored. For his real desire, as the representative of a new constituency, was recognition.

Throughout the negotiations, Maxwell had known that Hoge was due at the end of that week to attend the celebrated Gridiron dinner at the Capital Hilton in Washington. The hosts were the nation’s top satirists and their guests were the president, senators, judges, bankers and the Great and Good of America. Maxwell wanted to attend that dinner. Indeed, some in the Tribune camp believed that his haste in signing the agreement with the unions was to qualify for the invitation. This he duly did.

The occasion required tails. Having just risked millions which he did not have, Maxwell naturally showed no hesitation in requiring Bob Cole, his spokesman, to be dispatched by Concorde from London with his best suit. Cole would be given a $200 tip. ‘Buy something for your wife,’ said Maxwell with underwhelming generosity.

Having enjoyed the most expensive meal of his life, he revelled in the attention. Never had he featured more in newspapers. He stayed in Washington overnight. The following day, Hoge was invited to a private lunch for about twenty-five at which President Bush was guest of honour alongside Generals Schwarzkopf and Powell, leaders of the victorious US forces in the Gulf war. Maxwell, understanding only too well the power of association and endorsement from American presidents, ensured not only that he was invited but that he was seated next to the president. During that meal, Bush’s face gradually fell as he glumly sat through a monologue about Maxwell’s triumphant peacemaking between Gorbachev, Shamir, Thatcher and other leaders. Oh my God,’ Bush groaned to an aide as he departed. ‘Absolutely terrific!’ cried Maxwell to John Campi on his return to New York.

The extravaganza showed the symptoms of the Last Hurrah. For the next week, Maxwell remained in New York to manage the News. To recover the circulation and demonstrate his skills as the master of promotion, he rented a clipper moored in the Hudson River and invited past advertisers to a grand party serenaded by a band named New York Pops. In response to his own advertisement, ‘We’re Back – Buy Us’, the circulation soared from 300,000 to 700,000, a hopeful sign but still too low a figure to produce profits.

The only interruption to the euphoria was a report from Kevin. Oblivious of the celebrations on 42nd Street, several banks were pressing for more collateral or repayment of debts. Kevin had summoned Basil Brookes, the young finance director of MCC: ‘The private side needs a £75 million loan.’ Brookes, although it was obvious to him that the banks were squeezing, agreed to the temporary transfer. There seemed no reason to refuse. Neil Taberner, the Coopers partner, had raised no problems over the 1991 audit, and the finances appeared sound. By way of further reassurance, Kevin added, ‘We’ve agreed the terms to sell Pergamon.’ The £446 million paid by Elsevier, the Dutch publisher and competitor, was a good price, and the rationale for the sale was convincing. Scientists in the future would not read magazines, but would obtain their data through computers. Pergamon and its books, explained Kevin, represented an adventure past its prime, overtaken by electronic publishing, and MCC was retaining those rights. Brookes agreed, but after reflecting that MCC would lose the prodigious cash flow generated by Pergamon he insisted, ‘We will have to issue a press release warning that MCC’s profits will be down.’ Kevin paused. Profit forecasts were among the icons which his father held sacrosanct. Anything other than ecstatic predictions were inconceivable. But according to stock exchange rules Brookes was right. Kevin telephoned New York. ‘No. Absolutely not,’ shouted Maxwell. The last contact with reality had clearly been lost in the midst of New York’s adulation. But there was no alternative, Kevin decided. Only one method of persuasion could succeed: a personal conversation.