The government’s star witness at media mogul Conrad Black’s fraud trial testified Tuesday that Black himself ordered millions of dollars paid to a smaller Toronto-based company he owned.
F. David Radler’s testimony was the first to tie Black directly to the transfer of tens of millions of dollars that the government maintains belonged to the Hollinger International media empire.
Radler, who served as second in command of Hollinger International, was asked if Black had instructed him that 25 percent of all so-called “non-compete” payments received in the sale of company assets would be paid to the smaller, sound-alike company in Toronto, Hollinger Inc.
“He confirmed that was the plan,” Radler testified. “He said yes, and that was it.”
One by one, Radler outlined three sales of Hollinger International-owned newspaper groups and the payment of $15.2 million to Hollinger Inc.
Black, 62, a Canadian-born press baron who became a British lord, is accused of bilking Hollinger International out of $84 million, mainly by selling hundreds of small community newspapers across the United States and Canada and receiving separate payments from the buyers.
The money was in return for promises not to move back into the areas where the papers circulated and compete with the new owners.
Prosecutors say all of the non-compete money should have gone to Hollinger International shareholders. Some did, but millions of dollars were paid to Black and co-defendants John Boultbee and Peter Atkinson, Radler himself and two Black-controlled corporations based in Toronto.
Black’s lawyers say Radler ran Hollinger operations across the United States and western Canada. While Radler was making the deals, they say, Black was busy running papers in eastern Canada and in London, where Hollinger owned The Daily Telegraph.
Yet Radler, who was president and chief operating officer of Hollinger International, said Black maintained authority over all of Hollinger’s worldwide operations and he brought every major financial decision to the attention of Black.
“Would you submit them for Mr. Black’s comments and suggestions?” Sussman asked Radler.
“Yes, I would,” Radler said.
Radler, 64, told jurors that he has pleaded guilty to fraud for swindling Hollinger International out of millions of dollars with Black and his co-defendants. Radler made a deal with the government to testify against Black and in return get a lenient 29-month sentence.
Radler already has paid $8.5 million in restitution.
Eventually, Black and Radler came to own hundreds of community newspapers across the United States and Canada as well as the Chicago Sun-Times, the Toronto-based National Post, The Daily Telegraph and the Jerusalem Post.
All of the large papers except the Sun-Times have now been sold, and the company has changed its name to Sun-Times Media Group.