Maxwell: The Final Verdict

By 12.30, as the cadaver steadily ceased to resemble a human being, West became quite certain: ‘The muscle fibres were torn in a desperate attempt to grab something.’ Hiss did not reply. As the legs and each finger were cut open to scour for other secrets, he remained reserved. The embalmer’s formalin, he realized, had destroyed any chance of finding conclusive evidence. ‘It’s well worth doing, isn’t it?’ repeated West as they drank coffee.

‘Yes,’ replied Hiss, still looking for a pattern of injuries and still feeling restrained by a Health Ministry official’s edict that he should be cautious (the edict was possibly a consequence of the friendship between the deceased and the serving minister of health).

The corpse was turned over on to its shredded back. The Spanish stitches were cut by a sharp scalpel. It was just past one o’clock in the morning and the pathologists were about to enter already trodden ground. Swimming in formalin within the distastefully brown chest cavity were the remains of the Spaniards’ handiwork.

Dr Lamela, the senior Spanish pathologist, had carried out his duties in circumstances very different from those enjoyed by the Israelis. Working in a cramped, ill-lit autopsy room, he had lacked important instruments, and had afterwards been denied any laboratory in which to conduct essential scientific tests. Aged thirty-five, he was a reluctant pathologist, obtaining little satisfaction from his task. In his three-and-a-half-hour investigation of the virgin corpse, he had noted that there were no external marks, bruises or perforations of the skin, the obvious signs of murder or violent death. Later tests had confirmed that no poisons were present.

Lamela’s next theory was drowning. But he had noticed no water in the respiratory tracts leading to the lung, which ruled out death by drowning. Nor had he found much water inside the lung tissue. The single, reliable test for judging whether the deceased was alive or dead when he fell into the sea had been frustrated by nature. That proof depended upon traces of the sea’s diatoms (microscopic algae) in the bone marrow. If the person had fallen living into the sea and swallowed water, the diatoms would have entered the bone marrow, providing irrefutable evidence of drowning. Subsequent tests revealed that at the point in the Atlantic where the corpse had been discovered and hoisted into a helicopter, the seawater contained no diatoms. The ‘little’ water in the lungs Lamela ascribed to pulmonary oedema, water which could arise through a heart attack. He therefore relied upon speculation rather than scientific proof when, mistakenly believing that the deceased was a strong swimmer, he excluded drowning and suicide as a cause of death.

Instead, Dr Lamela had concentrated upon the coronary arteries to the enlarged heart. Both were 70 per cent constricted. The evidence of a heart attack seemed strong. The twenty-two-stone man had lived with only one functioning lung and a diseased heart, and the right ventricular muscle of the stricken heart was acutely enlarged. His widow had disclosed a medical report written some years earlier which had noted a lack of oxygen in the blood, a common cause of sudden death. Taking into account the deceased’s complaints to the ship’s crew just before his death about the temperature in his cabin, Lamela concluded that the fatality had been caused by a heart attack. But, by scientific criteria, he was again speculating. He had failed to test whether there was an infarction of the heart muscle (a noticeable scar in the heart tissue), a certain indicator of an attack. Instead he had relied upon the small blemishes which revealed slight attacks in the past. His shortcomings were manifest.

At 1.20 on Sunday morning in Tel Aviv, eight men and one woman peered into the evidential debris bequeathed by Lamela, the stench from the formalin irritating their eyes and noses. As an assistant ladled the liquid out of the cadaver, Hiss complained, ‘There are some bits here you don’t recognize as a human being’s.’ The Spaniards had butchered the evidence. Dissected organs had been thrown into the corpse rather than sealed in a plastic bag. What remained of the lungs was full of water, but whether natural fluids, seawater or formalin was impossible to determine. The dissection of a remnant of the lung revealed some froth. ‘Consistent with both heart attack and drowning,’ the pathologists agreed. Examination of the liver revealed acute sclerosis, consistent with alcoholism. What remained of the other organs was practically worthless.

‘There’s no heart, nothing,’ complained West.

‘I think we should send the bill for this one to the Spanish,’ laughed West.

‘To the King, Juan Carlos,’ agreed the Israeli.

Suddenly, another assistant excitedly announced the discovery of a blood clot in the head. Further examination revealed no bruising. It was just accumulated blood fixed with formalin, West and Hiss agreed, a relic of Lamela’s butchery. A deep bruise near the right ear also contributed nothing to establishing the cause of death but was probably contemporaneous with the tearing of the muscles. The British pathologist’s earlier excited conclusion that ‘He’s been thumped’ had been jettisoned, along with his initial assumption of murder.

At 2.30 a.m., their work was completed. ‘I think it’s been a very bloody dissection,’ mourned West as he lit a cigarette. Stepping into the warm air outside, he walked towards his car. He would drive back to Jerusalem, where he had landed just twelve hours earlier on a Gulfstream jet formerly owned by the man whose corpse he had just abandoned. ‘I’ll look at Jerusalem before I go home,’ he decided as he sat back in the car for the fifty-minute journey to the Holy City.

The body would soon be transferred to the same destination for its funeral after a mortician had performed some rapid repairs. It would be buried with a mystery. Three pathologists – British, Spanish and Israeli – had ruled out murder but disagreed on the cause of death. Both Hiss and West discounted Lamela’s dismissal of drowning. The ambivalent evidence prevented any definite decision. But Hiss supported the Spaniard’s theory of a heart attack.

In the Israeli’s scenario, the deceased had suffered the preliminaries of the attack, left his cabin and walked to the rail overlooking the sea. Either stumbling or in the early stages of the attack, he had fallen forward, toppling over the ship’s rail or under a steel cord in the stern. At the last moment, he had grabbed at the rail, torn his muscles and, in pain, had plunged into the dark wilderness where the heart attack had come to a swift conclusion. ‘I think he drowned with an epidural haematoma,’ said Hiss.

Suicide was ruled out by the Israeli. In those circumstances, he argued, suicides never cause themselves violent harm before their death. Nor do those contemplating suicide jump naked to their death, and the deceased’s body had been found without the nightshirt which he had worn that night.

On reflection, West was dismissive of Lamela and Hiss. The Briton’s conclusions were determined by the torn muscles and coagulated blood. Lamela would say in retrospect that the muscles had torn during the convulsions of the heart attack. Both West and Hiss rejected that as ‘ridiculous’. Both agreed that the muscles had been ripped by a sudden jerk after the deceased’s left hand had grabbed something. The pain in those seconds would have been intense. West discounted a heart attack, although ‘he had a heart disease which was potentially lethal’. He had two reasons: first, because ‘I would expect him to have fallen on to the deck’; second, even if he had toppled over the railing, ‘He would have been acutely breathless, convulsing and unable to grab anything.’

West favoured the theory that the muscle tears were caused in the deceased’s passage towards suicide or by an intervening accident. He had left his cabin and walked to the railing of his yacht. After climbing over, he had held on pondering his fate. Either he had accidentally slipped or he had deliberately jumped. In either event, in a sudden reaction, he had grabbed for the rail to save himself. His twenty-two stone combined with the fall’s momentum had ripped his muscles and within seconds forced him to release his grip. He had fallen into the dark sea where he had drowned. But even that was supposition: ‘I think that probably death was due to drowning. I can’t prove it. Nor can I prove the opposite.’ In an English court, ‘The verdict would be an open verdict.’

Distillation of the pathologists’ opinions leads towards the most reliable conclusion. Feeling unwell, the deceased had been on deck for fresh air. Stumbling, probably from a minor heart attack, he had fallen forward, passing under the steel cord or over the rail and, as he had twisted to grab it, had hit the side of his head against the boat. In double agony, he had lost his grip and dropped into the sea. There he died, some time later, from exhaustion or a heart attack.

But two critical issues remained unresolved. First, the cabin door had apparently been locked from the outside. If true, it pointed either to suicide or to murder, because anyone feeling unwell would be unlikely to lock a door. Secondly, the corpse had been found in seas notorious for strong currents. Twelve hours had elapsed between the deceased’s disappearance and his discovery. In the frequent occurrences of drowning around the Canary Islands, bodies are rarely found if missing for more than nine hours. Dr Lamela, with years of experience of drownings in that area, was puzzled by the condition of this particular corpse, which had allegedly spent twelve hours in the sea. ‘The body’, he recorded, ‘appeared to have been dead longer than it was in the water.’

Lamela’s conjecture spawned tales of intrigue, unidentified frogmen, a mystery ship, satellite photographs, radio intercepts, intelligence-service rivalries, unauthorized weapons deals, stolen gold, secret bank accounts, money laundering, untraceable poisons and ultimately murder. Given the identity of the corpse, nothing was unimaginable. At four o’clock in the morning of 10 November 1991, it was en route to Jerusalem to be fêted by the world’s most enigmatic government as a national hero.

In his lifetime, the deceased had boasted of his final bequest. ‘Billions of pounds’, he had crowed, ‘will be left to charity. My children will inherit nothing.’ The reality, he knew, was very different. He had bequeathed a cataclysm, but the full nature of his criminality was still known only to his youngest son.

TWO The Secret – 5 November 1990

The plan was finalized precisely one year before he mysteriously died.

Concorde landed at New York’s JFK airport six minutes late on 5 November 1990. Among the forty-nine passengers gliding self-assuredly off the supersonic flight from London at 9.26 a.m. was Ghislaine Maxwell, the twenty-eight-year-old daughter of the media billionaire. Elegantly dressed and wearing a distinctive hat, Ghislaine was blessed as Robert Maxwell’s youngest and favourite child. But even to her father’s most loyal employees, the thin, would-be socialite was condemned as arrogant and a beneficiary of her father’s fame and power. ‘She’d ask for a cigarette and walk out with the packet,’ complained Carol Bragoli, a secretary.

That morning she seemed more purposeful than usual. Robert Maxwell had entrusted her with a mission to carry an envelope across the Atlantic. Stepping into a chauffeured limousine, she was whisked to 200 Park Avenue in Manhattan. Awaiting her on the twenty-eighth floor was Ellis Freedman, an elderly lawyer who worshipped her father and had served his interests for nearly forty years. Ushered into the waiting room, the messenger handed over the envelope. There was no reason for the young woman to be suspicious. Yet, unknowingly, she had become enmeshed in a plan, initiated by her father, to steal $200 million.

Eleven days earlier, at 8 a.m. on 25 October, Kevin Maxwell, the thirty-one-year-old joint managing director of the Maxwell empire, had met Albert Fuller, the thirty-nine-year-old accountant responsible for the empire’s treasury. Like all of Maxwell’s most trusted employees, Fuller’s qualification for his well-paid position was his tolerance of abuse dispensed around the clock by the tycoon. Deliberately, even cynically, Maxwell had gathered in his inner sanctum apparatchiks who were not only beholden to him but even adulated him. Although technically competent, they were weak men attracted to a father-figure. Fuller was especially grateful to Maxwell. Two years earlier, he had been involved in the loss of a banker’s draft worth £4.7 million but had been exonerated and allowed to resume work after several weeks’ suspension.

Fuller did not query Kevin’s instruction to fly immediately to New York. His tasks seemed simple. From one office he was to retrieve a share certificate numbered B1001, bearing 10.6 million shares in Berlitz, the famous international language school. Then he was to travel to another office and there exchange the single document, worth over $200 million, for nine certificates of varying denominations. There was little cause for Fuller to be suspicious about that effortless transaction. Kevin’s request was not illegal and his need for discretion was understandable. Berlitz was owned (with 56 per cent of the shares) by the American Macmillan publishing company, which in turn was owned by Maxwell Communication Corporation (MCC) – the public company, still 60 per cent owned by the founder himself, which aspired to dominate the world’s exploding media industry. By 30 October, Fuller had returned to London, his mission accomplished.

Six days later, an hour before Ghislaine’s arrival in New York, Robert Maxwell telephoned Ellis Freedman, his lawyer. The instructions again seemed straightforward. Ghislaine, said Maxwell, would be bringing an envelope with nine share certificates showing Macmillan’s ownership of the Berlitz shares. Freedman was to secure their reissue in twenty new certificates of 500,000 shares each and one for 600,000 shares. But, said Maxwell, there was to be one significant variation. The new certificates should not mention Macmillan’s ownership. Instead, each certificate was to be issued showing the owner as Bishopsgate Investment Trust (BIT), with the inscribed caveat ‘Purely as a nominee’. Even in Maxwell’s strictly compartmentalized world, Freedman ought to have been suspicious. For BIT was a private company owned by Maxwell. To the inquisitive, the laundering would not have been well disguised.

The legal authority for that exchange was to be an executive committee board meeting to be held in Freedman’s office later on the same day. The participants were three Macmillan directors: Robert and Kevin Maxwell, and David Shaffer, Macmillan’s American president and its chief operating officer in New York. None of the three men, however, was in Manhattan.

The ‘meeting’ occurred at 11.15 a.m. New York time. The two Maxwells were ‘present’ by telephone from London while Shaffer spoke from Stouffers’ Hotel in Westchester, New York State. According to the telephone records, the conference call lasted eleven minutes. One year later, Shaffer would claim to have been duped and would dispute Freedman’s official record. ‘Either I was not told the true purpose of the board meeting,’ he protested, ‘or there was a telephone connection but I was not involved.’

At the end of that day, 5 November 1990, Ellis Freedman handed the twenty-one new share certificates to Ghislaine. By then the youngest Maxwell had varied her plan. Robert Maxwell had agreed that his daughter, instead of flying immediately back to London, could stay in New York overnight. After indulging herself in Manhattan’s shops, Ghislaine met friends for dinner. The following morning, she boarded a Jumbo 747 for the return flight. That night, the envelope was deposited in Robert Maxwell’s personal safe, located in the bathroom of his penthouse apartment on the tenth floor of Maxwell House, adjacent to the Daily Mirror building in Holborn (he had bought the Mirror Group in 1984). He now possessed $200 million, the property of unsuspecting shareholders, for his personal use. That had been precisely his intention.

Two days later, on 8 November, Kevin Maxwell sat in his office, smiling at Julie Maitland, a thirty-year-old banker employed by Crédit Suisse. Over the previous months, Kevin had been assiduously wooing the dark-haired woman, who some would judge in retrospect to be naive and lacking imagination. Like most of the banking fraternity in London, Maitland had eagerly offered her services to the Maxwells and had succumbed to flattery when invited to join what Kevin called the ‘inner circle’ of core banks acting for the family group. Like other bankers, she understood that the Maxwell companies were suffering a financial squeeze. But the truth, cleverly disguised by the Maxwells from the star-struck woman, was worse. The empire was hovering on the verge of bankruptcy and Kevin was hunting for gigantic loans to tide it over. His smiles for Julie Maitland, a wilful adjustment to his customary cold demeanour, were designed to perpetuate that deception and to entice the Swiss bank to lend the Maxwells even more money.

Naturally, the young woman could not act independently. Every discussion with Kevin had been carefully noted and reported in detail, first to her London superiors and then to the bank’s head office in Zurich. ‘The Maxwells want us to understand the private companies,’ Maitland had written plaintively six months earlier about the web of 400 different corporate names through which the Maxwells operated. And there was so much to understand.

Robert Maxwell had always yearned to manage a publicly quoted company, not just for the prestige but, more pertinently, to enable him to play with other people’s money. The Maxwell Communication Corporation was that tool, marred though it was for him by a colossal defect: the legal requirement for public accountability. For a man whose love of publicity went hand in hand with a pathological desire for secrecy, the desire for a publicly quoted company seemed illogical. But the sophist’s empire was designed to fool the honest inquirer. MCC sat at the centre of an utterly confusing and ever changing matrix of private and therefore secret companies. At the very top were a group of Liechtenstein trusts, anonymous and unaccountable owners of the majority of MCC’s shares. In reality, they were controlled by Maxwell. Beneath those Liechtenstein trusts and surrounding MCC like a constellation were 400 private companies of varying sizes and activity, trading with MCC and among themselves, not only in all matters of publishing, communications, printing and technology, but also in property, currencies, gilts and shares.

MCC was the corporate name adopted in 1987, replacing the British Printing and Communications Corporation. The reason, said Maxwell’s spokesman, was to shed the image of ‘dark northern printing halls’, but it was not, claimed Maxwell unconvincingly, ‘an ego trip. It was a decision reluctantly taken.’ To boost MCC’s value, Maxwell had incorporated Pergamon Press, his privately owned and profitable international scientific publishing company which was the foundation of his fortune, into the public company. Maxwell’s own shares in MCC were owned by Pergamon Holdings, which in turn was a subsidiary of the Maxwell Foundation, a private Liechtenstein company which in turn also controlled the privately owned Mirror Group, and which in 1991 was renamed the Robert Maxwell Group. In parallel, there was another Maxwell family company called Headington Hill Investments, ultimately owned by Liechtenstein trusts, which controlled the family’s shares in other private companies.

Maxwell’s purpose in creating this constellation of companies was indisputable. Beyond public scrutiny, he could move shares, assets, cash and debts to satisfy any need, increasingly regardless of rules and laws. So long as MCC was recording gigantic profits in its annual glossy brochure, the City experts did not query his netherworld. But recently a new phrase, its implicit rebuke stirring unease, had entered into the experts’ vocabulary – ‘the quality of MCC’s profits’. There was a suggestion that the empire’s finances were not as sound as their conductor desired the world to believe.

The deliberate confusion created by Robert Maxwell had now become a barrier against the sympathy he required. Maitland’s initial proposal for a loan had been rejected by Zurich. There was more than passing concern about the Maxwells’ ‘rush’ for money and there was some doubt about their ability to repay. The astute feared that they might be ambushed by the confusion.

‘Speculative characteristics’ were mentioned in Zurich and were blamed for the recent drop in MCC’s credit rating from BBB to BB, a warning to banks that their loans were marginally less secure. The doubts which this decline reflected had been fuelled by disparaging newspaper reports about Maxwell’s awkward repayment deadlines and the ‘juggling acts’ he was performing in order to pay off $415 million of debt. To find the cash, he had begun dismantling his empire. Businesses worth $500 million had been quickly sold, arousing suspicion and uncertainty and prompting newspaper comments about strange deals set up to channel money from his private companies to MCC. The very bankers who had rubbed their hands in glee at the prospect of earning fees by helping to finance the creation of the Maxwell empire were being approached to earn more money in arranging sales. In return for commission awarded for selling Maxwell businesses, the banks were expected to lend more money. But, increasingly, they wanted safer security for their loans. That was the reason for Kevin’s smiles at Julie Maitland, the banker.

For years, Robert Maxwell had publicly prided himself on the education of his children. In numerous interviews he had extolled the virtues of the ‘Three Cs’ – concentration, consideration and conciseness. But there was an extra, unpublicized lesson he gave Kevin: the unique importance of a businessman’s relationship with his bankers. For Maxwell, it was said, there were only two relationships: master and servant, and customer and supplier. While most suppliers could be treated with disdain, even contempt, Kevin had been nurtured by his father to cultivate and charm those whose money he wanted to use. Banks, he had learnt, survived and prospered by cultivating a certain trick of confidence, lending more money than they possessed. His father responded by perpetrating a succession of confidence tricks.

So Kevin reacted promptly when he heard from Maitland about her superiors’ reluctance to lend money. Oozing apparent sincerity, he promised: ‘We can provide ample security for the loans.’ The names and quantities of the shares he mentioned as a guarantee for the repayments persuaded Maitland’s superiors to abandon their doubts. He was offering shares in the most prestigious companies – seemingly a testament to Maxwell’s personal wealth hoarded in Liechtenstein. On 7 September Crédit Suisse accordingly granted a £50 million loan for six months. The loan was not to Maxwell Communication Corporation, the publicly quoted company, but to the biggest of Maxwell’s private companies, the Robert Maxwell Group (RMG). Simultaneously, Kevin ordered the appropriate share certificates to be hand-delivered to Maitland’s bank. But there was good reason for the bank to be suspicious of these. On each share certificate, the registered owner was shown as Bishopsgate Investment Management (BIM).

BIM was a private company established by Maxwell to manage the nine pension funds of his 23,400 employees pooled in the Common Investment Fund (CIF) and worth about £727 million. In theory, BIM was the trustee of CIF, which included the Mirror Group Pension Trust (MGPT), but because MGPT’s sixteen directors at the beginning of 1991 included Robert, Kevin and Ian Maxwell (and four trade union representatives), who were also directors of BIM, the self-governance of BIM never existed. Under the regime imposed by Robert and Kevin Maxwell, who were respectively chairman and finance director of BIM, the purchase and sale of BIM’s investments and, equally important, the registration of its share certificates and the location of their physical custody were determined by them rather than by Trevor Cook, the company’s manager (who was also a director).