Key witness backs Black on payment

CHICAGO -- Conrad Black and other Hollinger International Inc. executives took $5.5 million from a corporate subsidiary believing the money was part of management fees they were owed, ex-Hollinger president F. David Radler testified.

Radler's statement, under cross-examination during his seventh day of testimony, supports claims by Black and three codefendants that they were entitled to $60 million that prosecutors accuse them of stealing. Radler told defense attorney Benito Romano yesterday that $5.5 million drawn on the account of a Hollinger unit, American Publishing Co., was a management fee owed to Black's closely held Ravelston Corp.

The money was "part of the unpaid, but approved management fees to Ravelston?" Romano asked. Radler, a former Chicago Sun-Times publisher who pleaded guilty to fraud in 2005, said it was.

Hollinger and its subsidiaries paid Ravelston for corporate management services provided by Radler, Black, and two other men on trial in federal court in Chicago, former Hollinger chief financial officer John Boultbee, 63, and ex-vice president Peter Atkinson, 60.

Radler said Black and the other men signed noncompete agreements so some of those payments would be tax-free.

Under Canadian law, payments made to individuals in exchange for their signing noncompetition agreements aren't taxable.

Radler and the other Hollinger executives accused of wrongly taking noncompete fees were Canadian citizens at the time.

Black is charged with fraud and racketeering. He could spend the rest of his life in jail if convicted.