Robert Maxwell

This article is about the publisher. For the songwriter, see Robert Maxwell (songwriter).

File:Robert Maxwell.jpg

Robert Maxwell

Ian Robert Maxwell MC (June 10, 1923 – November 5, 1991), British media proprietor, rose from poverty to build an extensive publishing business. After his mysterious death it was revealed that he had been stealing from staff pension funds on a massive scale to support the business.

Early life

Robert Maxwell was born Ján Ludvik Hoch in the small town of Slatinské Dôly, Slovakia, (now Velyky Bychkiv, Ukraine) into a poor Yiddish-speaking Jewish family. In 1939, the area was occupied by Hungary. Most of his family was killed after Hungary was invaded in 1944 by its former ally, Nazi Germany but he escaped, arriving in Britain in 1940 as a 17-year-old refugee. He joined the British Army as an infantry private and fought his way across Europe from the Normandy beaches to Berlin. His intelligence and gift for languages gained him rapid 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. It was during this time that he changed his name to Robert Maxwell.

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 the socialism of his youth. In 1964 he was elected to the House of Commons for the British 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 brought against the American novel Last Exit to Brooklyn in 1966. He was not popular 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 practice. In 1969, as a result of a disputed takeover bid for Pergamon from an American company then known as Leasco, he was subjected to an enquiry by the Department of Trade and Industry (DTI) 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." 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 – like many successful publishers – sought to buy a daily newspaper, hoping to exercise political influence through the media. In 1969 he was blocked from buying the News of the World by Rupert Murdoch, who became his archrival in the British newspaper world. The battle for the News of the World was particularly acrimonious, Maxwell accusing 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 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) which became Maxwell Communication Corporation plc in 1983. In July 1984 Maxwell (again through PPL) acquired Mirror Group Newspapers from Reed International plc. MGN were publishers of the Daily Mirror, a traditionally pro-Labour paper. 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 also bought into Derby County F.C. in 1987.

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 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.

Evidence suggests that Maxwell's business empire was built on debt and deception. He had "borrowed" millions of pounds of his employees' money from his companies' pension funds to prop up his financial position. 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 pounds 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 press, 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.

"Death spiral"

Shortly before his death Maxwell had substantial borrowings secured on his shareholdings in his public vehicles, 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 a sinking ship.

Death

On November 5 1991, at the age of 68, Maxwell is presumed to have fallen overboard from his luxury yacht, Lady Ghislane, which was cruising off the Canary Islands, and his body was subsequently found floating in the Atlantic Ocean. He was buried 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 rubbished the notion of an accidental death on television.

Shortly before he died, 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 longtime 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, 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 Sampson 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, which meant that British newspapers were able to report what had been said without fear of being sued for libel. Maxwell called the claims "ludicrous, a total invention," but he 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 killed by the Mossad because he had tried to blackmail them.

Ari Ben-Menashe, however, implied in his now somewhat suppressed book, The Profits of War, that Maxwell had been murdered not by Mossad but by the CIA. The Israeli pathologist that received Maxwell's body pronounced that the injuries were not consistent with naturally falling off a yacht and that he had probably been murdered (a copy of this pathologist's report is reproduced in Robert Maxwell: Israel's Superspy).

According to Ben-Menashe when he was released from US custody, he took out the CIA's share of the profits of the arms sales to Iran, by Israel, which were in a Polish bank account and gave them to Maxwell to give to the CIA. Maxwell lost the money in the black hole of his accounts and threatened the CIA with damaging disclosures (perhaps regarding the mentioned arms deals with the Ayatollahs, George Bush Senior's role in the October surprise conspiracy, The PROMIS defence software which was a Mossad Trojan and the deaths of people connected to the Iran/Contra inquiry).

A 2005 broadcast on the Discovery Channel (in the program Conspiracies on Trial) claimed that even if Maxwell had suffered a heart attack, it is unlikely that he would have fallen overboard without help. The broadcast concluded that the most likely cause of death was the injection of air into his bloodstream to cause a heart attack, after which he was allegedly dropped into the sea.

Regardless of the controversy surrounding his death, Maxwell was given a funeral in Israel that would have befitted a head of state, as described by author Gordon Thomas:

...On November 10, 1991, Maxwell’s funeral took place on the Mount of Olives in Jerusalem, the resting place for the nation’s most revered heroes. 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).

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 authorization, 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 pounds sterling. 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 renewed speculation that his death was a suicide.

See also

• Headington Hill Hall, Oxford
• Scottish Daily News
• Tetris – From Russia With Love A portion of this BBC documentary describes Robert and Kevin Maxwell's failed attempt to secure the rights to the video game Tetris

Further reading

• Short BBC profile of Robert Maxwell
• Accountancy Age timeline
• Department of Trade and Industry report on Maxwell's purchase of the Mirror Group
• Biography
• Hersh, Seymour. 1991. The Sampson Option
• Thomas, Gordon and Dillon, Martin. (2002). Robert Maxwell: Israel's Superspy : The Life and Murder of a Media Mogul, Carroll and Graf, ISBN 0786710780
• Henderson, Albert, (2004). "The Dash and Determination of Robert Maxwell, Champion of Dissemination," LOGOS. 15,2, pp. 65-75.