The early life of Robert Maxwell
Ian Robert Maxwell was born Jan Ludvik Hoch in June 1923 in the small town of slantwise Doly, Carpathian Ruthenia, Eastern of what is now the Czech Republic. He grew up in a tight-knit Jewish Community. He fled the Czech invasion in 1939 and settled in Britain. However, most of his family members were killed in the Holocaust. Upon arrival in Britain, he joined the British army as an infantry private and fought his way across Europe from the Normandy beaches, at which time he was still a sergeant to Berlin. He was an intelligent man who spoke about five different languages. These skills gained him a commission in the final year of the war and eventually promoted him as a captain.
In Jan-1945 he received the military across. In the same year, he shot and killed the mayor of a German town in which his unit was attempting to capture (“war crimes police tracked Maxwell”, BBC, 10th March 2006). During this time he changed his name several times. He finally settled, as I am Robert Maxwell. He almost never used “Ian”.
After the war, Maxwell worked as a newspaper censor for the British military command in Berlin in Allied-occupied Germany. He used various contacts in the Allied occupation authorities to go into business. He became the British and United States distributor for Springer Verlog – a publisher of scientific books.
In 1951 he bought Pergaman Press Limited (PPL) a minor textbook publisher from Springer verlog and went into publishing on his own. He quickly built Pergaman into a major publishing house. By the 1960s, Maxwell was very rich. This time was a public figure in his youth. Pergaman Press Specialised in trade journals, technical and scientific books. He obtained his contracts from local authorities and educational establishments which, he courted, wined, and dined while establishing enormous lines of credit with overseas banks.
In 1964 Maxwell was elected to the House of Commons for the Labour Party representing Buckingham constituency served till 1970 when he lost the seat to conservative William Benyon. He was a prosecution witness in the obscenity case concerning America’s novel last exit to Brooklyn in 1966. He enjoyed mixed popularity in the Labour Party. Having what was seen by some to be an arrogant and domineering manner (intelligence information 1991) Maxwell also acquired a reputation for business practices.
In 1969 Saul Steinberg who was the head of Leasco Data Processing Corporation was interested in taking over Pergams Publishing Limited. At this time Maxwell claimed falsely, that a subsidiary responsible for publishing encyclopedias was extremely profitable(D.Baker and C.Sylvester “The grasshopper” Obituary of Maxwell, The Guardian,6 November 1991.Retrieved 19th July 2007).
Following Steinberg’s withdrawal on the discovery of dishonesty, Maxwell was the subject of 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 Leascos takeover practices. The DTI report concluded, “We regret having to conclude that, notwithstanding Mr.Maxwells acknowledged abilities and energy, he is not in our opinion a person who can be relied upon to exercise proper stewardship of a publicly quoted company”. It was found that Maxwell had contrived to maximize Pergamons share prices through transactions between his private family companies. Maxwell lost control of Pergaman in England but not in the United States for a time backed by his editors, he resumed control and eventually sold the company.
In the same year 1969, Maxwell being a successful publisher sought to buy a daily newspaper, hoping to exercise political influence through the media. In this year 1969, Rupert Murdoch, who became his archrival in the British newspaper world, prevented him from buying the news of the 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 bonafide offer which has been frustrated and defeated after three months of maneuvering”. 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. The 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). The Company was later sold off to a management buyout and is now known as Polestar. In July 1984 Maxwell (again through PPL) acquired mirror Group from Reed International plc. MGN were publishers of the Daily Mirror, a traditionally pro-labor 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 newspaper companies, Pergamon press, Nimbus record, collier books, Maxwell Directories, prentice Hall Information services, Macmillan (U.S) 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 fleet way 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 forms 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. Maxwells links with the Eastern European Totalitarian regimes resulted in a number of biographies of those countries.
Maxwell was also known as the Chairman of Oxford United Football Club, saving them from bankruptcy and leading them into a flight of English football, winning the league cup in 1986. Oxford United was 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. 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.
In 1980 Maxwell using borrowed funds, he acquired the British Printing Corporation (BPC), subsequently renamed Maxwell Communication Corporation. In 1984 he bought Mirror Group Newspaper (MGN) owner of the tabloid Daily Mirror from Reed International, taking them down the market in an unsuccessful war with Murdochs News Group.
In 1988, Maxwell bought the U.S book-publishing group Macmillan Inc. The following year sold his children’s book publishing interests. The late eighties saw a giddy purchase and disposal of staked in other media groups, paper producers, printers, banks, insurance and leasing companies, and even Christian Dior. It is unclear whether the “Churn” generated substantial profits and whether it was driven by Maxwell’s ego rather than speculative gains.
Business Troubles: (Scandals)
Rumors were spread many years about Maxwell’s heavy indebtedness and his dishonest business practices. However, he was well financial and had good lawyers and threats of costly libel actions caused his potential critics to treat him with caution.
Evidence shows that Maxwell’s business empire was built in 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. At the time, it a not illegal and fairly common practice. In the late 1980s Maxwell bought and sold companies at a rapid rate, apparently to conceal the unsound foundations of his borrowed funds, Maxwell acquired the British Printing Corporation (BPC), subsequently renamed it Maxwell Communications Corporation.
In 1984 Maxwell bought Mirror Group Newspaper from Reed International for the sum of a 113million. Later in the decade, he purchased the U.S publishing house of Macmillan, but this drove him further into debt. In 1990, Maxwell launched an ambitious new project, a trans-national 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 the money to buy New York Daily News.
In 1990, investigative journalism, 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.
Shortly before his death, at a time of high interest rates and during a deep recession, Maxwell had substantial borrowings secured on his shareholding in his companies, mirror, and Maxwell communications. The banks were permitted to sell these holdings in certain circumstances, which they did, depressing the same share prices and reducing the coverage of the remaining debt. Maxwell then used more money both borrowed and redirected from pension funds and even daily balances of his business, to buy shares on the open market, in an attempt to prop up the price and provide the shares as collateral for the further debt.
On November 5, 1991, Maxwell died at the age of 68. He is presumed to have fallen overboard from his luxury yacht, lady Ghislaine, which was cruising off the Canary Islands, and his body was subsequently found floating in the Atlantic Ocean. Maxwell was buried in Jerusalem. The official verdict cause of his death was drowning. However, some commentators have held that he may have committed suicide. Others also hold that he was murdered by Mossad. His daughter Ghislaine Maxwell quickly renounced the accidental death of his fate on television.
People of tribute worldwide paid their tributes. The then British Prime Minister John Major said Maxwell had given him valuable advice into the situation in the then Soviet Union during the attempted coup. He described him as a man of character.
Neil Kinnock the then British labor leader said Maxwell was a man of great respect. He further enumerated that Maxwell was a unique figure who attracted controversy, envy, and loyalty in great measure throughout his busy life. He was an active member and superior of a labor party. Later, it was alleged that Maxwell had been financing the labor leaders’ private office.
Shortly before his death, a self-proclaimed former Mossad officer named Ari Ben-Menashe had approached a number of news organizations in Britain and United State claiming that Maxwell and the Daily Mirror foreign editor Nick Davies were long time agents for the Israel Intelligence Service, Mossad, Ben Menasha further claimed that in 1986 Maxwell had tipped off the Israel Embassy in London that Mordechai Vanunu had given information about Israel’s nuclear capability to the Sunday Times the to the Daily Mirror
Maxwell’s death triggered a flood of revelations about his controversial business dealings and activities. It emerged that without prior authorization, he had used hundreds of millions of pounds from the companies pension funds to finance his corporate debt, his tireless takeovers, and lavish lifestyle. Thousand of his employees lost pension funds
On November 10, 1991, Maxwell was buried on Mount Olives in Jerusalem the resting place for the nation’s most revered heroes. It had all the trappings of a state occasion. Over six serving and former heads of Israel Intelligence community attended and listened to prime minister Shamir, where he quoted that Maxwell had done more for Israel than can be said today(then) (Gideon’s Spies: The Secret History of the Mossad, St. Martins Press, 1999).
The Maxwell companies filed for bankruptcy protection in 1992. His sons Kevin Maxwell and Jan Maxwell were declared bankrupt with debts of 400 million pounds. In 1995, the two Maxwell sons and two other former directors went on trial for fraud. They 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. In 2006, it came to the public that before his death, Maxwell was being investigated for possible war crimes in Germany in 1945. This renewed speculations that he may have committed suicide (“War crimes police traced Maxwell”, 10th March 2006).
In 2007 one of his former public relations staff commented that Maxwell bought up companies that had nothing to do with his core business. His main attraction seemed to be their healthy pension funds. Maxwell sold them some time, but first, he transferred the pension funds to a city company that he controlled.
Summing up, Maxwell a man of controversy was hard hit by the Pergamon scandal of 1969 in which he wanted to sell Pergamon press and subsequently inflated share price to make it appear more profitable. He was also heavily hit by the pension funds scandal of 1991 in which he diverted all the pension funds amounting to 400million pounds of his employees to his business. Eventually, the company was declared bankrupt and all his staff lost their pension.
Bibliography
The Mirror (London, England); 2002.
The Washington Report on Middle East Affairs; 2003; Younes, Robert.
Alexander Cockburn. 1991; the Nation, Vol. 252.
D.D. Guttenplan. 1992 Columbia Journalism Review, Vol. 31.
The Daily Mail. 2007 (London, England).
The Evening Standard. 2004 (London, England).
Encyclopedia article, 2007. The Columbia Encyclopedia.
The Mirror, 1996 (London, England).