Defence lawyers in the trial of media baron Lord Black have tried to show that millions of dollars of alleged illegal payments were honestly earned. Lord Black has been accused of stealing $60m (£30m) from Hollinger International while he was chief executive of the newspaper publisher.
Prosecutors claim that Lord Black and his co-defendants used complicated agreements to siphon off the cash. Lord Black has vehemently denied the allegations, saying he acted properly. A Canadian who became a British citizen, Lord Black built up a media empire from a single loss-making newspaper in Quebec. At its peak, the group included some of the world's best-known newspapers including Britain's Daily Telegraph and the Jerusalem Post.
Monies owed
Prosecutors have been trying to prove that Lord Black illegally used non-competition agreements as a way of defrauding shareholders. The agreements relate to the sale of newspaper assets and were put in place to ensure that Lord Black and his companies did not start up rival operations once the deals were concluded. Prosecutors allege that the "non-compete" payments made between 1998 and 2001 were improper bonuses to firm directors. Chief prosecution witness David Radler - once Lord Black's closest ally - confirmed that some of the payments to management were approved. Mr Radler told the Chicago court in his seventh day of cross-examination that Lord Black and other Hollinger executives were owed $5.5m. He added that this money for corporate management services undertaken by himself, his boss Lord Black, and two other defendants, ex-finance chief Jack Boultbee and former vice president Peter Atkinson, was approved by the board.
Mr Radler's testimony is seen as crucial to the prosecution's case, but defence lawyers have tried to portray him as a liar who will do anything to save himself. He pleaded guilty in 2005 to one count of fraud in return for a reduced 29-month jail term and agreeing to take the stand against Lord Black.
'No knowledge'
Mr Radler was also questioned about his role in payments to former Hollinger in-house lawyer Mark Kipnis. Questioned over Mr Kipnis' part in the alleged embezzlement, Mr Radler denied that the lawyer had played any part. Mr Kipnis received bonuses totalling $150,000, but Mr Radler said these were for helping to save the company money on legal fees. Mr Radler also confirmed that Mr Kipnis had no knowledge that a $2m cheque he signed to Hollinger Inc, the Toronto-based parent of Hollinger International, following the sale of American Trucker magazine was not proper. Mr Radler is due to take the stand at the Chicago court for the eighth day on Thursday when defence lawyers say they will conclude their questioning. Prosecutors will then have another chance to question him. The trial could be dragged out for another month, analysts said.
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