Robert Maxwell

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For other persons named Robert Maxwell, see Robert Maxwell (disambiguation).
Robert Maxwell

Born Ján Ludvík Hoch
June 10, 1923(1923-06-10)
Czechoslovakia
Died November 5, 1991
Sea around Canary Islands
Nationality British
Other names Ian Robert Maxwell
Occupation Publisher, media proprietor
Religious beliefs Jewish
Children Ghislaine Maxwell, Kevin Maxwell, Ian Maxwell

Ian Robert Maxwell MC (June 10, 1923 – November 5, 1991) was a Czechoslovakian-born British media proprietor and former Member of Parliament (MP), who rose from poverty to build an extensive publishing empire, which collapsed after his death due to the fraudulent transactions Maxwell had committed to support his business empire, including illegal use of pension funds. [1]

Contents

[edit] Early life

Robert Maxwell was born Ján Ludvík Hoch in the small town of Slatinské Doly, Carpathian Ruthenia, the easternmost province of pre-World War II Czechoslovakia (now part of Slatina-Doly (in Russian Solotvino [Солотвино]) Ukraine) into a poor Yiddish-speaking Jewish family. His parents were: Mechel Hoch, and Hannah Slomowitz. He had 8 siblings. In 1939, the area was reclaimed by Hungary to which it had belonged for a thousand years. Most of his family was killed after Hungary was occupied in 1944 by its former ally, Nazi Germany but he had already escaped, arriving in Britain in 1940 as a 17-year-old refugee. He joined the British Army Pioneer Corps in 1941 and transferred to the North Staffordshire Regiment in 1943. He fought his way across Europe from the Normandy beaches, at which time he was still a sergeant, to Berlin. His intelligence and gift for languages gained him a commission in the final year of the war, and eventual promotion to captain, and in January 1945 he received the Military Cross. In the same year he shot and killed the mayor of a German town his unit was attempting to capture.[2] It was during this time that he changed his name several times, finally settling on Ian Robert Maxwell. He almost never used the "Ian," however; he only retained it as a vestige of his original name.

After the war, Maxwell first worked as a newspaper censor for the British military command in Berlin in Allied-occupied Germany. Later, he used various contacts in the Allied occupation authorities to go into business, becoming the British and United States distributor for Springer Verlag, a publisher of scientific books. In 1951 he bought Pergamon Press Limited (PPL), a minor textbook publisher, from Springer Verlag, and went into publishing on his own. He rapidly built Pergamon into a major publishing house. By the 1960s, Maxwell was a wealthy man, while still espousing in public the socialism of his youth.

[edit] Member of Parliament

In 1964 he was elected to the House of Commons for the Labour Party, and was MP for Buckingham until he lost his seat in 1970 to the Conservative William Benyon. Maxwell was a prosecution witness in the obscenity case concerning the American novel Last Exit to Brooklyn in 1966. He enjoyed mixed popularity in the Labour Party, having what was perceived by some to be an arrogant and domineering manner.[citation needed]

Maxwell had also acquired a reputation for questionable business practices. In 1969 Saul Steinberg, who headed a company then known as Leasco Data Processing Corporation, was interested in a takeover bid for Pergamon. In negotiations, Maxwell falsely claimed that a subsidiary responsible for publishing encyclopedias was extremely profitable.[3] Following Steinberg's withdrawal on the discovery of the dishonesty, Maxwell was the subject of an inquiry by the Department of Trade and Industry (DTI) under the Takeover Code, then in force, and at the same time the U.S. Congress was investigating Leasco's takeover practices. The DTI report concluded: "We regret having to conclude that, notwithstanding Mr Maxwell's acknowledged abilities and energy, he is not in our opinion a person who can be relied on to exercise proper stewardship of a publicly quoted company." It was found that Maxwell had contrived to maximise Pergamon's share price through transactions between his private family companies.[3] Maxwell lost control of Pergamon in England—but not in the United States—for a time. Backed by his editors, he resumed control and eventually sold the company.

[edit] Business activities

Maxwell long sought to buy a daily newspaper, hoping to exercise political influence through the media. In 1969 he was prevented from buying the News of the World by Rupert Murdoch, who became his arch rival in the British newspaper world. The battle for the News of the World was particularly acrimonious, Maxwell accused Murdoch of employing "the laws of the jungle" to acquire the paper and said he had "made a fair and bona fide offer... which has been frustrated and defeated after three months of [cynical] manoeuvring". Murdoch denied this, arguing the shareholders of the News of the World Group had "judged [his] record in Australia".

In 1970 Maxwell established the Maxwell Foundation in Liechtenstein, a tax haven. A condition of this type of company was that very little information is publicly available, which according to the Department of Trade and Industry suited Maxwell's business methods. In 1974 he reacquired PPL. In 1981 Maxwell acquired (through PPL) the British Printing Corporation (BPC) and changed its name to the British Printing and Communication Corporation (BPCC). The company was later sold off to a management buy-out, and is now known as Polestar. In July 1984 Maxwell (again through PPL) acquired Mirror Group Newspapers from Reed International plc. MGN were publishers of the Daily Mirror, a pro-Labour Party newspaper. He also bought the American interests of the Macmillan publishing house.

By the 1980s Maxwell's various companies owned the Daily Mirror, the Sunday Mirror, the Scottish Daily Record and Sunday Mail and several other newspapers, Pergamon Press, Nimbus Records, Collier books, Maxwell Directories, Prentice Hall Information Services, Macmillan (US) publishing, and the Berlitz language schools. He also owned a half-share of MTV in Europe and other European television interests, Maxwell Cable TV and Maxwell Entertainment. In 1987 Maxwell purchased part of IPC Media to create Fleetway Publications.

Maxwell pioneered the dissemination of highly specialized scientific information, responding to the exponential growth of investment in academic research. After 1970, when research universities diverted attention from the growth of their libraries to the growth of financial reserves, he and other publishers were blamed for greatly increased subscription fees for scientific journals. The need to maintain profits for publishers and the profitability of higher education institutions created budget difficulties for academic libraries, and for publishers of monographs. At the same time, Maxwell's links with the Eastern European totalitarian regimes resulted in a number of biographies (normally considered to be hagiographies) of those countries' then leaders, with sycophantic interviews conducted by Maxwell, for which, in the UK, he received much derision.

Maxwell was also well known as the chairman of Oxford United Football Club, saving them from bankruptcy and leading them into the top flight of English football, winning the League Cup in 1986. Oxford United were to pay a heavy price for his involvement in club affairs when Maxwell's questionable business dealings came into the public domain. Maxwell bought into Derby County F.C. in 1987. He also attempted to buy Manchester United in 1984, but refused to pay the price that the owner Martin Edwards had put on the club.

[edit] Business difficulties

Rumours circulated for many years about Maxwell's heavy indebtedness and his dishonest business practices. But Maxwell was well financed and had good lawyers, and threats of costly libel actions caused his potential critics to treat him with caution (the onus of proof in UK defamation law is on the defendant). The satirical magazine Private Eye lampooned him as a "Cap'n Bob" and the "bouncing Czech", but was unable to reveal what it knew about Maxwell's businesses. Maxwell took out several libel actions against Private Eye, one resulting in the magazine losing an estimated £225,000 and Maxwell using his commercial power to hit back with Not Private Eye.[4]

Evidence suggests that Maxwell's business empire was built on debt and deception. He had "borrowed" millions of pounds from his companies' pension funds to prop up the financial position of his group of companies. This was, at the time, not illegal and fairly common practice. In the late 1980s he bought and sold companies at a rapid rate, apparently to conceal the unsound foundations of his business. In 1990 he launched an ambitious new project, a transnational newspaper called The European. The following year he was forced to sell Pergamon Press and Maxwell Directories to Elsevier for £440 million to cover debts, but he used some of this money to buy the New York Daily News.

By late 1990, investigative journalists, mainly from the Murdoch papers, were exploring Maxwell's manipulation of his companies' pension schemes. During May 1991 it was reported that Maxwell companies and pension schemes were failing to meet statutory reporting obligations. Maxwell employees lodged complaints with British and U.S. regulatory agencies about the abuse of Maxwell company pension funds. Maxwell may have suspected that the truth about his questionable practices was about to be made public.

In Christopher Hitchens's 1995 book The Missionary Position: Mother Teresa in Theory and Practice, the author claims that Maxwell was involved with Mother Teresa in a "fund-raising scheme" through his various newspaper businesses. According to the book: "Mr. Maxwell inveigled a not unwilling Mother Teresa into a fundraising scheme run by his newspaper group, and then, it seems (having got her to join him in some remarkable publicity photographs), he made off with the money." One such photograph is reproduced within the book.

[edit] "Death spiral"

Shortly before his death, at a time of high interest rates and during a deep recession, Maxwell had substantial borrowings secured on his shareholdings in his public companies, Mirror and Maxwell Communications. The banks were permitted to sell these holdings in certain circumstances, which they did, depressing the share price and reducing the coverage of the remaining debt. Maxwell then used more money, both borrowed and redirected from pension funds and even the daily balances of his businesses, to buy shares on the open market, in an attempt to prop up the price and provide the shares as collateral for further debt. In reality he was bailing water back into a sinking ship.

[edit] Death

On November 5, 1991, at the age of 68, Maxwell is presumed to have fallen overboard from his luxury yacht, the 'Lady Ghislaine', which was cruising off the Canary Islands, and his body was subsequently found floating in the Atlantic Ocean. He was buried on the Mount of Olives in Jerusalem. The official verdict was accidental drowning, though some commentators have surmised that he may have committed suicide, and others that he was murdered. His daughter, Ghislaine Maxwell, quickly renounced on television the notion of an accidental death.

Politicians were swift to pay their tributes. The then Prime Minister, John Major, said Maxwell had given him 'valuable insights' into the situation in the Soviet Union during the attempted coup. He was a 'great character', Mr Major added. Neil Kinnock, the then Labour Party leader, spoke of the former Labour MP for Buckingham, from 1964-70, as a man with "such a zest for life . . . Bob Maxwell was a unique figure who attracted controversy, envy and loyalty in great measure throughout his rumbustious life. He was a steadfast supporter of the Labour Party". It was later alleged that Maxwell had been financing the Labour leader's private office and that Maxwell was an agent of the MI6, the British Intelligence Agency. One version, proposed by John Loftus and Mark Aarons, has Maxwell hounded to death by the British Secret Service that conspired to deny him the financial credit he needed to save his publishing empire.[5]

Shortly before Maxwell's death, a self-proclaimed former Mossad officer named Ari Ben-Menashe had approached a number of news organizations in Britain and the United States with the allegation that Maxwell and the Daily Mirror's foreign editor, Nick Davies, were both long time agents for the Israel intelligence service, Mossad. Ben-Menashe also claimed that in 1986 Maxwell had tipped off the Israeli Embassy in London that Mordechai Vanunu had given information about Israel's nuclear capability to the Sunday Times, then to the Daily Mirror, (Vanunu was subsequently lured from London, where the Sunday Times had him in hiding, to Rome, whence he was kidnapped and returned to Israel, convicted of treason, and imprisoned for 18 years.)

No news organization would publish Ben-Menashe's story at first, because of Maxwell's famed litigiousness, but eventually New Yorker journalist Seymour Hersh repeated some of the allegations during a press conference in London held to publicize The Samson Option, Hersh's book about Israel's nuclear weapons. A British Member of Parliament asked a question about Hersh's claims in the House of Commons (with the protection of Parliamentary Privilege which allows MP's to ask questions in Parliament without risk of being sued for defamation), which in turn meant that British newspapers were able to report what had been said without fear of being sued for libel. Nevertheless, writs were swiftly issued by Mirror Group Solicitors on instruction from Maxwell, who called the claims "ludicrous, a total invention". Maxwell then sacked Nick Davies, and just days later, was found dead.[6]

The close proximity of his death to these allegations, for which Ben-Menashe had offered no evidence, served to heighten interest in Maxwell's relationship with Israel, and the Daily Mirror has since published claims, again without evidence, that he was assassinated by Mossad after he attempted to blackmail them.[7]

Maxwell was given a funeral in Israel better befitting a head of state than a publisher, as described by author Gordon Thomas:

On November 10, 1991, Maxwell’s funeral took place on the Mount of Olives in Jerusalem, across from the Temple Mount. It had all the trappings of a state occasion, attended by the country’s government and opposition leaders. No fewer than six serving and former heads of the Israeli intelligence community listened as Prime Minister Shamir eulogized: "He has done more for Israel than can today be said" (Gideon's Spies: The Secret History of the Mossad, St. Martin's Press, 1999).[8]

A hint of Maxwell's service to the Israeli state was provided by Loftus and Aarons, who described Maxwell's contacts with Czech anti-Stalinist Communist leaders in 1948 as crucial to the Czech decision to arm Israel in their War of Independence that year. Czech military assistance was both unique and crucial for the fledgling state as it battled for its existence [9]

[edit] Events after his death

Maxwell's death triggered a flood of revelations about his controversial business dealings and activities. It emerged that, without adequate prior authorisation, he had used hundreds of millions of pounds from his companies' pension funds to finance his corporate debt, his frantic takeovers and his lavish lifestyle. Thousands of Maxwell employees lost their pensions.

The Maxwell companies filed for bankruptcy protection in 1992. His sons, Kevin Maxwell and Ian Maxwell, were declared bankrupt with debts of £400 million. In 1995 the two Maxwell sons and two other former directors went on trial for fraud, but were acquitted in 1996. In 2001 the Department of Trade and Industry report on the collapse of the Maxwell companies accused both Maxwell and his sons of acting "inexcusably".

It came to light in early 2006 that, before his death, Maxwell was being investigated for possible war crimes in Germany in 1945. This led to renewed speculation that his death was a suicide.[2]

[edit] Maxwell in popular culture

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  • The character of publisher Victor Ludorum in Clive James' 1985 novel Brilliant Creatures has many similarities to Maxwell (both Jewish refugees with families mostly killed by Nazis, both wealthy socialists, publishers, overweight etc).
  • Former Mossad agent Victor Ostrovsky alleged in his book The Other Side of Deception that Robert Maxwell was a long-time Mossad agent, providing them with money to finance operations. Ostrovsky claims that Maxwell was assassinated by a Mossad Kidon unit on his yacht while in the Canary Islands.
  • The character Lubji Hoch/ Richard Armstrong in Jeffrey Archer's novel The Fourth Estate is clearly based on Maxwell. The character of Keith Townsend, Armstrong's arch-rival in publishing, is based on Rupert Murdoch
  • In The James Bond movie Tomorrow Never Dies, M (Judi Dench) gives instructions for a cover story to be announced in the media for the death of the villainous media tycoon Elliot Carver (Jonathan Pryce): Carver, they are to say, is missing, believed drowned, having fallen from his luxury yacht.[10]
  • A stage play by Rod Beacham, Lies Have Been Told: An Evening with Robert Maxwell, with Philip York as Maxwell, played to critical acclaim[citation needed] in the West End in 2006 and as of May 2007 is touring the UK.
  • A BBC drama titled Maxwell covering his life shortly before his death starring David Suchet was aired on May 4, 2007.[11]
  • A picture of Maxwell is used on the cover of the Iron Maiden single "Be Quick or Be Dead".
  • The character Lord Michael Logan in Stephen Fry's novel The Hippopotamus is, like Maxwell, a media baron who rose to prominence from a poverty-stricken eastern-European background.
  • Maxwell has often been compared to Augustas Melmotte from The Way We Live Now by Anthony Trollope; David Suchet has played both roles on television.
  • In the comedy Only Fools and Horses, Del Boy's character refers to unsecure private pensions as "Maxwell Money" with reference to Maxwell's looting of pensions.
  • Maxwell is also frequently mentioned in Andy Hamilton's Radio Comedy Old Harry's Game
  • Maxwell makes an "appearance" in the fifth episode of season 4 of The New Statesman. In the episode, his death is revealed to have been faked in order to allow him to escape with a misappropriated pension fund. In order to make good his disappearance, he makes a deal with the main character Alan B'Stard. Maxwell was featured using video clips to simulate a conversation between himself and Alan, played by Rik Mayall.
  • In series 2 of Goodnight Sweetheart there is an in-joke concerning Robert Maxwell when Gary meets a foreign soldier fighting in the British army. "Ludo" is looking for a more British name and decides on the first name of Robert. Seeing a jar of MAXWELL House coffee he considers it to be the obvious choice and asks to be called Robert House.
  • In the satirical magazine Private Eye, Maxwell is often referred to as 'Captain Bob'.
  • Maxwell, through his software company Mirrorsoft, played a role in the acquisition of the video game Tetris from its developers in the Soviet Union and its eventual marketing and sale in the West.[12]

[edit] See also

[edit] References

  1. ^ "The pensioners' tale", BBC, 29 March 2001
  2. ^ a b "War crimes police tracked Maxwell", BBC, 10 March 2006
  3. ^ a b Dennis Barker and Christopher Sylvester "The grasshopper", - Obituary of Maxwell, The Guardian, 6 November 1991. Retrieved on 19 July 2007.
  4. ^ "Not Private Eye", Tony Quinn, Magforum.com, 6 March 2007
  5. ^ John Loftus and Mark Aarons, The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People, New York, St. Martin's Griffin, 1994.
  6. ^ "Maxwell's body found in sea", Ben Laurance, John Hooper, David Sharrock, and Georgina Henry, The Guardian, 6 November 1991
  7. ^ "Robert Maxwell was a Mossad spy : New claim on tycoon's mystery death", Gordon Thomas and Martin Dillon, Daily Mirror, 2 December 2002.
  8. ^ "Review : Gideon's Spies: The Secret History of the Mossad", Freedomwriter.com
  9. ^ Loftus and Aarons, The Secret War Against the Jews.
  10. ^ VF Daily: Bruce Feirstein: The Tao of Bond-Film Naming: Online Only: vanityfair.com
  11. ^ Suchet in title role of BBC Two's Maxwell
  12. ^ Tetris: A chip off the old bloc

[edit] Further reading

Parliament of the United Kingdom
Preceded by
Frank Markham		 Member of Parliament for Buckingham
1964–1970		 Succeeded by
William Benyon