Day five of the corporate fraud trial of Conrad Black was over before it began yesterday in Chicago – even before Prosecutor Eric Sussman and Defence Counsel Eddie Greenspan had a chance to present their opening arguments.
Judge Amy St. Eve adjourned proceedings until Tuesday following complaints by defence lawyers, who suggested the timing of regulatory and civil settlements involving star prosecution witness David Radler are interfering with Black’s right to a fair trial.
On Friday, Radler – Black’s former top executive in the Hollinger group – signed a US$28.7-million settlement with the US Securities and Exchange Commission, a deal that will also see him barred from being an executive or director of a US public company. On Sunday night, a second US$63.4-million settlement was announced with Sun-Times Media, the new incarnation of Hollinger International.
In that deal, the Chicago publisher will receive US$63.4 million in “new cash” from Radler and affiliated publishing companies to settle claims and potential additional claims against Radler related to backdated stock options when he was chief operating officer at the company.
The timing is “real troubling,” Black’s US lawyer Ed Genson said, adding that he heard of the Sun-Times settlement on CNN at 11pm Sunday and asked St. Eve to delay opening arguments.
David Radler, 62, has been Conrad Black’s business partner for nearly 40 years. He is said to be a “germophobe” with an abiding fear of germs and is petrified of spending time in the riot-torn US prison system.
After originally pleading innocent, last September he rolled-over and pleaded guilty to mail fraud and agreed to a 29-month sentence instead of 20 years (in a Canadian gaol) and a US$250,000 fine.
Under his “sweetheart” deal with prosecutors, Radler will testify about the inner workings of Hollinger and its related companies. The prosecution case hinges on the testimony of “Judas” David Radler.
It is the denouement of his long partnership with Black that saw the men build Canada’s biggest newspaper chain through acquisitions and frugal cost management. Lead prosecutor Eric Sussman said he had been unaware of the Sunday settlement until Genson mentioned it in court.
A Sun-Times spokesperson said the Chicago-based publisher had been working on a settlement with Radler for some time and had an obligation as a public company under US securities rules to disclose the agreement to shareholders.
Judge Amy St. Eve is expected to swear in the jury Tuesday and then give the floor to Assistant US Attorney Jeffrey Cramer, who will lay out the government’s case.
Prosecutors allege Black defrauded shareholders and used money from the Hollinger International newspaper group to cover extravagant personal expenses. The charges centre on the sale of hundreds of community papers and US$85 million in “non-compete” payments allegedly pocketed by executives of Black’s former newspaper empire
Black is charged with wire and mail fraud, tax evasion, money laundering, racketeering and obstruction of justice. He will plead not guilty.
* watches the wires