Partner says Black OK'd questionable fees

CHICAGO -- David Radler, longtime business partner of former Hollinger International Inc. chairman Conrad Black, testified they received $5 million in exchange for a sham agreement not to compete with a newspaper they owned.

US prosecutors claim the two men helped steal $60 million from Hollinger by disguising the money as noncompete payments from companies that bought $3 billion worth of Hollinger assets. Radler, Hollinger's former president, pleaded guilty in 2005 to fraud and agreed to testify against Black.

"This was a bonus that Mr. Black had authorized for the executives," Radler told jurors yesterday in Chicago federal court of the 2001 payment. Radler, who worked with Black for more than 30 years, described the alleged payment during a third day of testimony at his former boss's fraud and racketeering trial.

The men, with ex-chief financial officer John Boultbee, 63, and former vice president Peter Atkinson, 60, stole from the Chicago-based company, now known as Sun-Times Media Group, prosecutors said. Ex-general counsel Mark Kipnis, 59, helped them, the government said. Black, 62, faces as much as 20 years in prison if convicted of the most serious charges.

Black maintains the fees were approved by Hollinger's board. Edward Greenspan, his Toronto-based defense lawyer, began an argumentative cross-examination of Radler, 64, yesterday afternoon.

"I am here to tell the truth, and that's all I'm here for. To tell the truth," Radler told Greenspan after the lawyer challenged his honesty.

"You know full well if you move off your script, the government will tell the judge you're a liar, don't you?" Greenspan continued.

"I have no script, sir," Radler responded. While his plea agreement calls for a 2 1/2-year prison term, he won't be sentenced until after the trial.

Radler admitted lying about Hollinger's activities, including the noncompete payments, in early meetings with prosecutors and Federal Bureau of Investigation agents.

Earlier in the day, Black's lead trial lawyer, Edward Genson of Chicago, unsuccessfully sought a mistrial when Radler testified about documents the defense claimed were outside the scope of the charges.

In February 2001, Black and Radler received identical payments of $2,612,500 for signing agreements not to compete with the American Publishing Co., a Hollinger subsidiary that owned a newspaper in Monmouth, Calif., Radler said. Atkinson and Boultbee each got $137,500, he said.

The noncompete agreements, signed by all four men, were mailed to them by Kipnis, who signed on behalf of American Publishing, Radler said.