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Racketeering trial begins for Conrad Black

Former media baron Conrad Black's racketeering trial got under way with a US federal prosecutor calling him a corporate swindler who stole millions of dollars and his attorney ripping into the government's star witness as a liar.

"It was theft, it was fraud, it was crime," federal prosecutor Jeffrey Cramer said yesterday in a fiery opening statement.

But defense attorney Edward Genson said the money was made legally and scoffed at the notion that Black and his three co-defendants had defrauded shareholders in the Hollinger International newspaper empire.

"They were entitled to the money," Genson said. "Were they entitled to that much money? That's a philosophical matter."

Genson appealed to jurors not to blame Black for getting millions of dollars in payments from buyers when he sold off hundreds of community newspapers across the US and Canada.

"This was not Enron," Genson said.

Black, 62, is charged along with Jack Boultbee, 63, Hollinger's former chief financial officer; Peter Atkinson, 59, the company's former general counsel; and Mark Kipnis, 60, an attorney who served as corporate secretary in the Chicago headquarters.

The men are accused of siphoning US$60 million out of Hollinger through asset sales in which all but Kipnis pocketed millions of dollars in payments from buyers.

Black by himself is alleged to be responsible for US$84 million that the company lost through the payments, which Cramer told jurors eventually turned into "a bold money grab" by the executives.

Genson painted the government's star witness, David Radler, the No. 2 man in Black's organization for decades, as a liar who would say anything to please the federal prosecutors who have him a deal.

"David Radler will come into this court and lie to you about Conrad Black," Genson said. He said that Radler would claim every deal Hollinger made "magically became a Black-orchestrated deal after Radler cut his deal."

Radler pleaded guilty to one count of mail fraud and agreed to testify for the government in return for a relatively lenient 29-month sentence and US$250,000 fine. Prosecutors say that Black, if convicted, could, in theory, be sentenced to 101 years in federal prison.

US District Judge Amy St. Eve, who is presiding over the trial, would decide on the sentence, and Black would probably receive much lesser time if convicted.

Black, Boultbee and Atkinson received payments in return for agreeing not to compete with companies that bought hundreds of US and Canadian community newspapers from Hollinger.

Cramer told jurors the money should have gone to Hollinger shareholders and that, when questions were asked about the payments, Black brushed them aside as "an epidemic of shareholder idiocy."

But Genson sought to explain why they were legal by telling jurors the story of a fictional "Sam the bartender." He said that anyone who bought "Joe's Bar" would also want to pay Sam, a beloved neighborhood fixture, not to start his own tavern across the street.

Genson also said Radler negotiated most of the noncompete agreements while the one Black negotiated, with Can West Global Communications, was "done right." He ridiculed the idea that Hollinger's board, with such luminaries as former secretary of state Henry Kissinger and former Illinois governor James Thompson, could have been duped by the defendants.

Genson portrayed Black as a brilliant businessman with a bent for politics, who had built the Hollinger empire only to have it taken away from him.

He also said a special committee set up by the board of directors to investigate the noncompete payments had essentially hijacked "a company that he had spent his life building."

The company once owned the Chicago Sun-Times, the Toronto-based National Post, the Daily Telegraph of London and the Jerusalem Post, as well as hundreds of community newspapers across the US and Canada.

All of the big papers except the Sun-Times have been sold and the company has changed its name to Sun-Times Media Group.
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