Chief U.S. Witness Testifies at Conrad Black Trial

By: Mark Fitzgerald After eight weeks of trial, Conrad Black came face-to-face Monday with his one-time trusted lieutenant, now the star witness in the federal fraud case against him, former Chicago Sun-Times publisher David Radler.

Radler strode into U.S. District Court Judge Amy J. St. Eve's courtroom shortly before noon looking calm, wearing a blue suit, a red tie, and a white shirt that showed off his signature deep tan.

The courtroom was packed. E&P witnessed the proceedings from a media overflow room with a video feed that did not show Radler. Nevertheless, his voice was calm, and within five minutes of testimony he was chuckling under the direct examination of Assistant U.S. Attorney Eric Sussman.

Radler began his testimony by describing the plea bargain that turned him into the chief prosecution witness against Black. Radler pleaded guilty last September to a single count of wire fraud in exchange for a reduced prison sentence likely to be served in Canada, restitution of some 8.5 million, and a fine of $250,000.

"I pled guilty to taking money from Hollinger International under circumstances that were not allowed," Radler said.

The 62-year-old Black is charged with swindling Hollinger out of $84 million. Much of the fraud charges are related to his selling off small papers and keeping payments from the buyers. These payments, which were in exchange for "noncompete" promises from Hollinger, should have been paid to the company, and not to Black and the company's executives, according to federal prosecutors.

Radler described his first meeting with Black in 1969, when he was 27 years old. He was introduced to the future press baron by a mutual friend who would become a longtime business partner of the two, Pete White.

White had spotted a money-losing English-language daily in a small French-speaking town in Quebec. The three new partners bought the Sherbrooke Record for $6,666 each, Radler said.

Within three months, the Record was turning a profit, Radler said.

In the courtroom, Black was seated sideways to the witness stand, and appeared to be avoiding looking at his old partner. Black's Chicago attorney, Edward Genson, on the other hand, who is hobbled by a neuro-muscular condition, moved his seat so he could stare directly at Radler through the testimony.

Radler said he considered Black a friend in those early days in Quebec, recounting how they once vacationed in New Orleans together.

Of his first meeting with Black in 1969, Radler said "I was impressed with Mr. Black's knowledge and his ability, and I thought he would be a great partner to have."

Before Radler electrified the courtroom with his appearance, the proceedings Monday morning mirrored the mixture of tedium and vaguely scandalous gossip that has characterized the trial for the past eight weeks.

Much of the morning was taken up with eye-glazing cross-examination of a KPMG financial analyst who sparred with Black's attorney over how to value non-compete agreements in the newspaper industry.

The testimony veered back to Black's famously lavish lifestyle, however, when his former New York-based executive assistant Janice Akerhelm testified about making arrangements for a December 2000 surprise 60th birthday party for Black's wife, the conservative columnist Barbara Amiel Black.

The party at the posh New York restaurant Le Grenouille cost a total of approximately $42,800. Akerhelm testified that Black instructed her that Hollinger International should pick up two-thirds of the restaurant tab while he would pay the remaining one-third. Under cross-examination by Genson, Akerhelm confirmed that among the boldfaced names attending the party -- including Donald Trump, Peter Jennings, Henry Kissenger, William F. Buckley Jr. and Michael Bloomberg -- were several members of Hollinger International's board of directors.

After a break for lunch, Radler's testimony was to resume later Monday afternoon.