AS a top bodyguard, James Hyslop saw some of the world’s most powerful people at their most vulnerable. Working in security for the Bilderberg Group, Hyslop came into close contact with the statesmen and leading businessmen that make up the right-wing think-tank’s membership.

Conrad Black, peer, former Telegraph boss and Bilderberg member, always impressed him, said Hyslop. “He didn’t need someone around the way other people on the world stage do — the bodyguard as a status symbol.”

Hyslop acted as Black’s bodyguard, accompanying him on his private jet and attending functions. He has nothing but fond memories of a man he describes as generous, warm, witty and intelligent.

Last week Lord Black’s former colleagues painted a very different picture of the disgraced peer — one that could land him in jail. In a phrase reminiscent of Black’s own famously florid oratory, he was accused of running “a corporate kleptocracy”. A 500-page internal report commissioned by his former company, Hollinger International, alleged that Black and others siphoned off $400m in an “aggressive looting” of the publishing company’s assets.

The cash taken by Black, his former deputy David Radler and their associates including Black’s wife Lady Barbara Amiel-Black, represents 95.2% of Hollinger’s entire adjusted net income during the period 1997-2003, claimed the report. Alongside the big numbers, the report is studded with a glittering trail of outrageous expense claims. Between 2001 and 2003, Black and co spent $23.7m on private jets. “Black’s corporate expense reports charge the company for items such as ‘handbags for Mrs BB’ ($2,463), ‘jogging attire for Mrs BB’ ($140), ‘exercise equipment’ ($2,083), ‘T Anthony Ltd leather briefcase’ ($2,057), ‘opera tickets for C&BB’ ($2,785), ‘stereo equipment for the New York apartment’ ($828), ‘silverware for Blacks’ corporate jet’ ($3,530) ‘summer drinks’ ($24,950), a ‘happy birthday, Barbara’ dinner party at New York’s La Grenouille restaurant ($42,870),” claimed the report.

Shareholders and Hollinger want the money back and are pursuing Black for more than $1 billion in the American courts. Also at risk are his former friends and directors, including Henry Kissinger, American defence adviser Richard Perle and Marie-Josée Kravis, wife of billionaire Henry Kravis. They stand accused of standing idly by as Black raided the piggy bank. Their bill for failing to stop Black’s excesses could run to hundreds of millions of dollars.

As the report makes clear, the claims against Black may well bankrupt the peer, but money could be the least of his worries. The Securities and Exchange Commission (SEC), America’s top financial watchdog, the state authorities and the FBI are investigating various aspects of the Hollinger case. A criminal lawsuit is a strong possibility and, in the current environment, conviction would almost certainly mean jail.

Black and Radler are strongly protesting their innocence. A statement from Ravelston, a company controlled by Black, dismissed the report as “exaggerated claims laced with outright lies”. Radler described it as: “a highly inaccurate and defamatory diatribe written more like a novel than a serious report.” He said KPMG, Hollinger’s auditors, repeatedly reviewed and approved the now controversial payments.

Hyslop said that Black should be treated as innocent until proven otherwise. But if the worst came to the worst and Black was sent to jail, “I think he would thrive. He can adapt to any situation. At least we’d have a far more intelligent prison class.”

WHATEVER the final outcome for Black, he and his former colleagues now look set for years of legal skirmishes. To date Black faces:

Potential investigations by British and Canadian authorities into Black’s activities outside America.

The legal fallout from the debacle will have a wide impact and take years to settle, said Columbia University professor John Coffee, an authority on white-collar crime.

Black’s case, he said, reminds him of the trial of Dennis Kozlowski. The former boss of Tyco is awaiting a retrial on charges that he looted $600m from the conglomerate. Like Black he enjoyed a lavish, company-funded lifestyle, spending $1m on his wife’s birthday bash and $6,000 on a shower curtain for his Manhattan flat.

The Kozlowski case began with an investigation by the SEC. It then passed its findings to Manhattan’s district attorney Robert Morgenthau, who brought criminal proceedings against Kozlowski and other former Tyco executives.

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