By: E&P Staff
Wednesday was a bad day for Conrad Black, as courts in Ontario and Chicago dealt separate setbacks to his defense in his upcoming U.S. federal trial for racketeering and fraud.
An Ontario judge ruled that Ravelston Corp., the Toronto-based holding company Black used to control his now-shattered worldwide newspaper publishing empire, can plead guilty in a plea bargain with U.S. prosecutors. Ravelston is a co-defendant with Black in the trial that is scheduled to start March 14 in Chicago.
Also Wednesday, the judge in that upcoming trial ruled that prosecutors can present evidence about the spending sprees of Black’s wife, the columnist Barbara Amiel Black, including allegations that she and her husband improperly expensed thousands of dollars to the newspaper publishing company Hollinger International to pay for lavish parties, handbags, and even unspecified “summer drinks.” Barbara Amiel Black has not been charged with wrongdoing.
In both courts, attorneys for Black argued unsuccessfully that the former newspaper mogul’s right to a fair trial would be jeopardized by the rulings.
In Chicago, Judge Amy St. Eve of the U.S. District Court for the Northern District of Illinois ruled that jurors can hear evidence about the spending sprees, saying attorneys can discover during jury selection if a potential juror is prejudiced by that information.
Black is charged with fraud, racketeering, money laundering and obstruction of justice in the alleged looting of $83 million from Hollinger International, now known as the Sun-Times Media Group. Three other former Hollinger executives are also charged in the scheme to divert disguised non-compete fees from the sales of the chain’s community papers: former Executive Vice President Peter Y. Atkinson, former CFO John “Jack” Boultbee and, former General Counsel Mark Kipnis. All have pleaded not guilty.
Black is also charged with filing false income tax returns that underreported his income in 1999 and 2000 by $29 million.
In her ruling, Judge St. Eve sided with Black on some evidence issues. Prosecutor will not be allowed to present evidence of an alleged 1998 scheme to prop up Hollinger’s stock price, or that Black used company money to purchase documents he used for his biography of Franklin Delano Roosevelt.
In Ontario, Justice Peter Cumming ruled that the Ravelston plea bargain had been fairly negotiated. The court had to approve the plea bargain because Ravelston is in receivership.
As part of the plea bargain, Ravelston will pay a $7 million fine and a still-undetermined amount of restitution for the allegedly improperly diverted $83 million.
In a National Post article by Peter Brieger, Black said he will ask the plea to be suspended until he can appeal the ruling. “If the judgment were to be upheld, the receiver would be in an interesting position when we are acquitted,” he told the paper.