Radler testimony critical to Conrad Black case

MUCH-anticipated testimony this week by David Radler, the ex-partner of former media baron Conrad Black, will likely make or break the criminal case against Mr Black and three fellow executives, lawyers said.

The trial, which is entering its eighth week, will reach a crescendo when Mr Radler, who was once operations chief at Hollinger International, takes the witness stand some time today and faces what is sure to be withering cross-examination from each of the four defendants’ lawyers.

Federal prosecutors get first crack and will try to paint Mr Radler, 64, as Mr Black’s co-conspirator in skimming $60 million (€44m) from Hollinger as the two dismantled the Chicago-based company they had built into one of the world’s largest newspaper publishers.

Mr Radler, a Canadian living in Vancouver, pleaded guilty nearly two years ago in exchange for a 29-month sentence and a promise to testify for prosecutors.

Just before the trial began in March, Mr Radler also agreed to pay $29m to settle with the US Securities and Exchange Commission and paid millions more to settle with Hollinger’s successor company, the Sun-Times Media Group.

The Canadian-born Black, 62, is charged with fraud, racketeering, money laundering and obstruction of justice. He faces up to 101 years in prison, millions in fines and $92m in forfeitures if convicted.

“Without Radler, they can’t prove intent,” said a lawyer involved in the case.

“Radler is going to have to be extremely specific about the conversations he had with the defendants and how they planned to get away with this,” said Chicago attorney Hugh Totten, who has defended executives and is observing some of the trial in US District Court.

“There aren’t any smoking gun documents,” Mr Totten said, noting prosecutors would have had to show the defence any such damning emails or recorded conversations before trial.

Defence lawyers have said they intend to portray Mr Radler, who was a key manager of Mr Black’s newspaper empire for more than 30 years, as the real culprit who is lying to save himself.

Testimony by newspaper executives, accountants, lawyers, and former Hollinger directors has been used to buttress the prosecution’s accusation that Mr Black and the other defendants disguised bonuses to themselves as non-taxed, non-compete payments. So-called non-compete fees ostensibly compensate executives or companies for agreeing not to re-enter media markets that they exit.

Prosecutors sought to show that the defendants claimed the non-compete agreements were requested by the buyers of the newspapers when they were not, that some were never presented to Hollinger’s board, and that the payments were left out or glossed over in financial statements or board resolutions.

Defence lawyers focused on bad advice from Hollinger’s Canadian lawyers that the payments did not need to be disclosed.

But the defence might have hurt itself if the jury is persuaded that incomplete disclosures of the payments by executives implied a cover-up, Mr Totten said.