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between his private and public companies, moving from one to the other. Although during 1990 the tax expert, seeing through the maze of figures, had realized that the private companies were ‘short of cash’ and that Maxwell was making an effort ‘to prevent MCC’s share-price fall’ by purchasing his own shares through Liechtenstein, he remained faithfully silent. His loyalty was all the more remarkable given that their relationship had been fractured ever since Maxwell had used one of his private companies (Hollis) to buy AGB, a research company, in the summer of 1988. Woods’s protest to Maxwell, who was at the time sailing on his yacht, was rebuffed with the words, ‘It’s not your business to question my judgment. Just obey your orders.’ To break the impasse, Kevin had driven to Woods’s home on a Saturday morning and, after going through the figures, had understood his criticism. Both men had telephoned Maxwell to protest. But their appeal was in vain. That deal, recalled Woods, was the first sign of Maxwell’s bad judgment. The Macmillan deal in October 1988 was the second.

      In the midst of the Macmillan saga, Woods had cautioned Maxwell about the price. ‘Don’t worry,’ smiled the Publisher, touching Woods on the knee, ‘I won’t offer more than $80 a share.’ Shortly afterwards, he paid $90.25, nearly $1 billion more than the company was worth, just to secure a place in history. Woods was appalled and invoked the innovation of which he was proudest – a computer programme capable of predicting Maxwell’s profits. On the eve of that final bid, he had unfolded over his employer’s desk a spread-sheet forecasting the consequence of the Macmillan purchase. ‘You’ll be liable for surplus ACT,’ he said, referring to heavy exposure to taxation. ‘That’s going to hit profits. And that’s going to hit MCC’s share price.’

      For a moment, there was silence. None of the usual telephone calls interrupted Maxwell. ‘Very interesting,’ he murmured at last. ‘Has anyone else seen this?’

      ‘No,’ replied Woods, understanding the reason for the question. ‘If MCC’s share price falls, it will affect the private-side companies’ – many of whose loans were secured against MCC shares.

      Again there was silence. Woods added, ‘I’m predicting a five per cent to eleven per cent growth rate – at best.’

      Maxwell folded the paper: ‘I’ll get twenty per cent.’ Woods was dismissed from the room.

      Days later, Maxwell borrowed a further £170 million from Lloyds Bank to part-finance his purchase of the Official Airline Guides. For Woods, it boded another tax nightmare, with more harmful consequences for MCC’s share price.

      Ever since then, Woods’s fears had grown as he observed Maxwell’s efforts to prop up MCC’s profits. In October 1990 he offered Kevin an unorthodox solution. If MCC’s share price fell further, said Woods with an air of self-congratulation, the family would be able cheaply to buy (through the Mirror Group, still privately owned by Maxwell) the remaining 40 per cent of MCC shares owned by the public. ‘That’s an interesting idea,’ answered Kevin, recognizing Woods’s naivety about the state of the family’s finances. ‘I hadn’t thought of that.’ To his relief, the real crisis had not yet penetrated even into the inner sanctum.

      Woods’s misgivings had been interpreted by Maxwell as evidence of disloyalty, the cardinal sin in the dictator’s eyes. Maxwell’s displeasure was aggravated when a secretary in Woods’s department was suspected of leaking to the satirical magazine Private Eye stories of a sexual affair between herself and Maxwell.

      ‘Sack her,’ ordered Maxwell, doubly outraged by the association with the magazine he had successfully sued for defamation. Woods refused. ‘She’s innocent,’ he insisted. But he was proved wrong. The secretary had forged letters and had invented the relationship. Woods was deemed to be a traitor. ‘Kick him out of his room,’ instructed Maxwell. Woods was removed from his plush office and dispatched to the equivalent of a dungeon, a shabby room in an outbuilding without a secretary. He hinted that he would resign his directorships, but Maxwell gambled correctly that his tax expert, like so many employees, would bear the embarrassment to avoid losing his high salary.

      Of all those people in autumn 1990, few were as trusted by Robert and Kevin Maxwell as Larry Trachtenberg, an excitable, thirty-seven-year-old Californian international relations graduate who until 1985 had sought a PhD at the London School of Economics. During his period at the LSE, Trachtenberg had been renowned as the legman, the gofer amiably operating a photocopying machine late into the night to please a tutor, until he abandoned his studies to earn his fortune. In 1987, his babbling self-salesmanship had beguiled both Robert and Kevin Maxwell into believing him to be a talented investor and, keen to become rich, he had wilfully lent himself as the Maxwells’ tool. The American’s misfortune was his ignorance about the rules governing behaviour in the City. Untrained in finance, he casually assumed an expertise he lacked.

      Almost every day, after the 7 a.m. ‘prayer meeting’ with his father, Kevin awaited Trachtenberg in his office. Together they agreed the implementation of Robert Maxwell’s orders: principally to use the £700 million plus in the pension funds to finance the empire’s difficulties. In Maxwell’s opinion, it was a stroke of genius to delegate to an underling under his own and Kevin’s supervision the negotiations being undertaken with banks over the use of the pension funds. By removing himself from personal contact, Maxwell could always deny any knowledge of any wrongdoing and maintain his worldwide profile as one of the globe’s media moguls. Concealing reality was, he knew, vital for survival.

      Maxwell had begun using pension fund money as a temporary palliative in 1986. In that year he borrowed £1.5 million from MCC’s pension fund. In 1987 he borrowed £9 million. Both sums were repaid. His alleged legal authorization flowed from the ‘Powers of Investment’ clause in the fund’s deed of trust. But the clause stipulated that the trustees could only ‘lend money on such security as the Trustees think fit to any person except an Employer’. Accordingly, Maxwell was breaking the terms of the trust from 1986 onwards. Only the Publisher understood the irony of the presence in his wooden bookcase of a book called ‘Creative Accounting’ by Ian Griffiths. Chapter 4 was entitled, ‘How to pilfer the pension fund’.

      In 1988, two of Maxwell’s financial ambitions coalesced. He wanted common management for the nine pension funds under his control – Mirror Group Pension Scheme, Maxwell Communication Staff Pension Plan, Maxwell Communication Works Pension Plan and six private pension schemes – and he aspired to own a bank. Both ambitions would allow him to authorize investments of other people’s funds for his own personal benefit. He prided himself on being a shrewd investor, in currencies and gilts as well as shares. In 1986, he boasted that he had earned £76 million by buying and then breaking up the Philip Hill Investment Trust, an operation which had earned him genuine acclaim from cynical City observers. His genius was that he had not paid a penny. Instead he issued 112.6 million MCC shares worth £306 million. He then sold off most of the Trust’s assets and used the cash to finance a buying spree in North America. Among the purchasers of the shares owned by the Trust was his own staff pension fund.

      On Maxwell’s instructions, the pension fund bought from Philip Hill 12.4 million shares in Beechams, the pharmaceutical company. Three months later, just before a take-over bid for Beechams was announced, he ordered that the same shares be sold to MCC. When the news of the bid broke, the share price soared. Then, in March 1987, just before the end of the company’s financial year, MCC sold the same shares back to the pension fund and pocketed £17.4 million in profit. That ploy allowed Maxwell days later to boast that MCC had earned ‘record profits’. Only after his death would he be accused of receiving insider knowledge about Beechams, enabling him to manipulate the ownership of the shares and steal from the pension funds.

      Over those ensuing years, Maxwell’s personal investments in banks – Ansbacher, Guinness Peat, Singer and Friedlander, the Midland and Robert Fraser – reflected his ambition to earn a fortune by controlling other people’s money. In his dream, he was emulating Lord Stevens, another newspaper baron and in Maxwell’s opinion ‘a spectacular success,’ who with Lord Rippon had transformed Invesco MIM into a £2 billion investment management fund. Hence in 1988 Maxwell established a new framework for the management of the pension funds. He had few qualms about his use of the funds. Soon after buying the Mirror in 1984, he had

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