By: George Garneau NEW YORK COLUMNIST Mike McAlary is living testament that it pays to have friends?especially friends who have friends who own newspapers. McAlary testified that he got his latest job at the New York Daily News with help from a "friend," New York Times columnist and former editor A.M. Rosenthal. Testifying in a hearing over his defection from a $275,000-a-year job at the New York Post to the Daily News, McAlary said Rosenthal asked him at a social function about his plans, since businessman Steven Hoffenberg was about to acquire the Post. McAlary responded that he was considering the Daily News and Newsday, both former employers, but was undecided. He said he had written some unflattering things about the News' new owner, Mortimer Zuckerman, and expressed doubt about his prospects there. But Rosenthal offered to call Zuckerman, and McAlary accepted, the contact resulting in a call from Zuckerman and breakfast. "I told Zuckerman I had a contract [with the Post] but I thought they were in breach of it," McAlary testified. "We hadn't been paid and we were bouncing checks all over town." He also told the Supreme Court hearing that he learned that Hoffenberg was to be named in an SEC fraud suit, and, through personal dealings, decided Hoffenberg "was not to be trusted." He said Hoffenberg had "zero credibility" and he felt his reputation was in jeopardy by working for him. McAlary said Hoffenberg was "fixated" on gays and suggested the Post disclose an unnamed person's homosexuality on Page One. He said sources told him they heard Hoffenberg use ethnic slurs. Hoffenberg later branded the accusations "outrageous, disgusting lies" and said it was McAlary who suggested the outing. The Post quoted Hoffenberg as naming the subject. Hoffenberg's attorney, Jay Fisher, sought in questioning to establish that McAlary's contract remained in force, including an exclusivity clause. The Post's current owner, Peter Kalikow, who has turned control over to Hoffenberg, testified that McAlary was among the best 10 columnists in the country and was "a very important part of the Post." Kalikow, who said he had asked McAlary to stay, testified he never told him his contract was terminated nor did the columnist ask to have his contract terminated. Hoffenberg sued the News after it hired the Post's top three editors?editor Lou Colasuonno, managing editor James Lynch and metro editor Richard Gooding?and columnists McAlary and Amy Pagnozzi. McAlary and Colasuonno hired a lawyer to defend against breach of contract charges. The Post's new editor, Gerard Bray, testified that the defections had "a serious negative impact" and exacerbated the staff's uncertainty about the Post's viability. He said two other Post staffers had been offered jobs at the News, movie critic Jami Bernard and sportswriter Frank Isola. As E&P went to press, there was no decision on the Post's request for an injunction barring the News from hiring other Post employees. All Post employees took one-month 20% pay cuts, with union approval, to stem losses and keep the paper alive during the ownership transition.