Robert Maxwell

Robert Maxwell

Ian Robert Maxwell, MC, (10 June 1923 – 5 November 1991) was a Ruthenian Jew who became an English Labour Party Member of Parliament (MP), and who built an extensive publishing empire, which collapsed after his death due to the multiple fraudulent transactions Maxwell had committed to support his business empire, including illegal use of pension funds. He was also a prolific gambler.

Early life

Robert Maxwell was born Ján Ludvík Hoch in the small town of Slatinské Doly, in Sub-Carpathian Ruthenia, the eastern-most 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 eight siblings. In 1939, the area was recovered by Hungary, who had lost it under the imposed Treaty of Trianon in 1920 .

Britain

In 1940 he left Hungary, arriving in Britain 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 served across Europe from the Normandy landings, at which time he was still a sergeant, eventually reaching Berlin. He gained a commission in the final year of the war, and eventual promotion to captain, and in January 1945 he received the Military Cross. It has been alleged that in the same year he shot and killed the Mayor of a German town his unit was attempting to capture. It was during this time that he changed his name several times, finally settling on the completely false Scottish name of Ian Robert Maxwell. He almost never used the "Ian", however; he only retained it as a vestige of his original name. Also in 1945, he married Elisabeth "Betty" Meynard, a Frenchwoman, they had three children.

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. However, it would appear that he already had been identified as a problem for some people. An obituary for Barclays banker Thomas Ashton states: "One Oxford resident who came to Ashton's attention was Robert Maxwell – to whom Ashton firmly forbade his managers to lend."

Member of Parliament

In 1964 he was elected a Member of Parliament for the Labour Party 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.

Maxwell had also acquired a reputation for questionable business practices. In 1969 another Jew, 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 encyclopaedias was extremely profitable. 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. 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.

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 re-acquired 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 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.

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 "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.

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' 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.

"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.

Death

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 Israeli 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, and 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 The 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.

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. 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.

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).

A hint of Maxwell's service to the Israeli state was provided by writers 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.

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.

=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 and his endless gambling (he was a member of several London casinos). 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.