Conrad Black’s Trial Attorney Grills Former Hollinger Accountant

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The former comptroller for the Hollinger International newspaper empire was grilled for hours Thursday as a defense attorney sought to show there was no effort to hide millions of dollars in payments to former media mogul Conrad Black and other executives.

It was slow going as Fred Creasey took the stand for a second day at Black’s racketeering and fraud trial. Defense attorney Patrick Tuite asked question after painstaking question, and Creasey often had to confess that he had no memory of meetings and memos that were at least five years old.

Tuite was trying to repair damage inflicted Wednesday when Creasey testified that Black and other executives were late in reporting millions of dollars in payments to the Securities and Exchange Commission.

Purchasers of hundreds of Hollinger community newspapers in the U.S. and Canada made the payments to Black and others for promises that Hollinger wouldn’t compete with the new owners in the same markets.

So-called non-competition payments are not unusual in the industry. But prosecutors say all the money should have gone to Hollinger shareholders.

Black says he did nothing illegal and that if anything was wrong with the payments, Hollinger No. 2 man F. David Radler was to blame.

Creasey had testified Wednesday that $80 million in such payments — made to Hollinger executives when the company sold some of its Canadian papers to CanWest Global Communications — were not reported immediately to the SEC.

Creasey also said Wednesday that there was no mention of the CanWest payments in an annual 10-K report that Hollinger filed with the SEC in March 2001. He said Hollinger’s former chief financial officer, John Boultbee, told him he had advice that it didn’t need to be reported.

But on cross examination by Tuite, one of Boultbee’s attorneys, Creasey identified an 8-K report to the SEC from Hollinger in December 2000 that did mention details of the Can-West transaction.

“I have a vague recollection of it,” Creasey testified.

Creasey also identified financial documents prepared for a February 2002 meeting of the audit committee of Hollinger International Inc.

“Lord Black and other executives entered into noncompete agreements with CanWest,” one document said. It included the total of the noncompete payments made in the CanWest deal: $80 million.

Tuite also got Creasey to identify a number of documents that said payments to Black and his co-defendants had “been approved by an independent committee of Hollinger’s board of directors.”

After hammering away all morning and frequently being stopped by objections from prosecutors, Tuite finally asked: “Did John Boultbee ever ask you to knowingly make a false entry in any document?”

“No,” Creasey said. He said that Boultbee never asked him to change, erase, shred or hide documents either.

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