All the lord's men

Key players in coming trial of ex-press boss

On Wednesday, former press baron Conrad Black, 62, begins the fight of his life -- a fraud trial in which he stands accused of helping to steal $84 million from the company that owns the Chicago Sun-Times.

If convicted of taking company money while he was chief executive, Black could spend 20 years in prison and pay more than $7 million in fines. Black has declared his innocence, called the charges against him an "unholy onslaught," and vowed to seek libel suits against his accusers.

A key government witness will be David Radler, 64, Black's business partner of nearly 35 years, who pleaded guilty to charges of looting Hollinger International, the former name of Sun-Times Media Group.

"The defense will try to make him out to be a liar, and make that the most important issue in the case," said Robert Kent of Baker & McKenzie, a former federal prosecutor. "The prosecution will try to corroborate his testimony. They're not going to hang their whole case on it. They'll get the jury to look at all of the evidence."

Also charged in the case are former Hollinger chief financial officer Jack Boultbee, former Hollinger executive vice president Peter Atkinson and former general counsel Mark Kipnis.

The central scheme alleged in the case involves the sales of Hollinger International newspapers to other companies, and the siphoning of "non-competition" payments to the defendants and to companies controlled by Black and Radler.

Non-compete agreements are common in the sales of newspapers, to prevent the seller from trying to compete for the same readers and advertisers as the buyer of a paper. But prosecutors say payments for these agreements should have gone to Hollinger International shareholders, not to Black and other executives.

Black also is accused of spending company money on his own luxurious lifestyle, such as $42,000 on a birthday party for his wife, and using the company jet to vacation in the South Pacific.

The trial will give the Chicago federal courthouse international exposure it hasn't experienced since the Chicago Seven trial of anti-war activists in 1969. More than 300 foreign and U.S. reporters have registered with the clerk's office to attend.

Like former Enron executive Jeffrey Skilling and Tyco's Dennis Kozlowski, Black is a celebrity CEO. Before he was ousted as head of Hollinger International in 2003, Black built an empire that included the Sun-Times, the Jerusalem Post, the London Daily Telegraph and community papers in the United States and Canada.

The trial is expected to last three to four months.

Other possible witnesses include former Illinois Gov. James Thompson and former U.S. Secretary of State Henry Kissinger, who sat on the Hollinger board of directors.

If Black is acquitted, he and others still face a $542 million lawsuit by Sun-Times Media Group.

mwisniewski @suntimes.com

Kipnis, 60, is an Illinois attorney with an office in Elgin. Formerly with Holleb & Coff, Kipnis joined Hollinger International in 1998 as corporate counsel.

Kipnis was in charge of documenting and closing the purchases and sales of newspapers by International, and is accused of facilitating the misdirection of millions in non- compete payments to companies controlled by Radler and Black.

Of all defendants, Kipnis profited least in the scheme. In one deal, Kipnis received a $100,000 bonus, while Black and Radler each pocketed $4.3 million, according to the government.

Kipnis has pleaded innocent and is represented by Ron Safer.

Key to the case are the relationships among the defendants, Chicago Sun-Times owner Hollinger International -- now called Sun-Times Media Group -- and the companies that controlled it.

Ravelston is a Toronto corporation whose primary ownership in 2003 was split this way: Conrad Black owned 65.1 percent; David Radler owned 14.1 percent, Jack Boultbee and Peter Atkinson each owned about 1 percent, and the rest was owned by other investors.

Ravelston's main asset was its controlling interest in Hollinger Inc., Toronto. Hollinger Inc.'s key asset was Hollinger International, owner of the Sun-Times and other area newspapers and the London Telegraph.

In 2003, Inc. owned only about 20 percent of Hollinger International's equity, but thanks to "super-voting shares," it controlled 70 percent of the voting stock in International.

Thus, through his controlling interest in Ravelston, Black controlled Inc. and International.

Millions of dollars in "non-compete" payments from newspaper sales flowed to Ravelston and Inc. The government alleges those payments were illegal and belonged to Hollinger International shareholders.

Ravelston, which is now in receivership, pleaded guilty to fraud March 5.

A former Whitewater prosecutor, U.S. District Judge Amy St. Eve, 41, is described by lawyers as meticulous, intelligent and highly organized.

St. Eve joined the federal bench in 2002 at 36, becoming one of the youngest federal judges in the country.

A native of southern Illinois and a graduate of Cornell Law School, St. Eve helped convict former Arkansas Gov. Jim Guy Tucker and Sue and Jim McDougal on fraud charges in 1996. She has worked as both a corporate lawyer and a federal prosecutor, handling public corruption, health and bank fraud cases.

As a judge, St. Eve is known for running a tight ship and expects everyone to be seated and ready to go by 9:30 a.m. sharp.

Edward Genson, 65, Black's Chicago lawyer, is known for defending accused mobsters and disgraced politicians. A lawyer with a theatrical style, Genson recently represented lobbyist Larry Warner, convicted along with former Gov. George Ryan of racketeering and fraud. Genson also defended Ryan aide Scott Fawell, convicted on corruption charges.

Genson's clients include R. Kelly, the R&B star accused of sex with an underage girl. Genson also defended former U.S. Rep. Mel Reynolds (D-Chicago), who was convicted on charges of sexual misconduct and child pornography.

Once, during a Black pre-trial hearing, Genson complained to Judge Amy St. Eve, "I'm a simple criminal lawyer."

"Mr. Genson, I know better," St. Eve said.

Contributing: Natasha Korecki

Lead prosecutor Eric Sussman, 37, won convictions of Gangster Disciples leaders and a former Chicago Police detective who ran a jewelry theft ring.

Sussman's style often is sarcastic. In a brief accusing Black of failing to disclose millions in assets, Sussman quipped that unlike the companies he controlled, Black "appears to have the Midas touch."

Also representing the government are:

•  •  Jeffrey Cramer, 41, who worked white collar fraud cases in New York. Cramer will open for the government.

•  •  Julie Ruder, 34, was part of the team that convicted Mayor Daley's patronage chief, Robert Sorich.

•  •  Edward Siskel, 34, was prosecutor in the case of accused serial bank robber and national fugitive Randy Rencher. He is Gene Siskel's nephew.

Black, 62, of Toronto, was born in Canada but gave up his citizenship to become a British lord. He's called Lord Black of Crossharbour, referring to a train stop near his London office. He built a media empire that became Hollinger International and included the Chicago Sun-Times, the Jerusalem Post and the London Daily Telegraph.

In late 2003, Black stepped down as chief executive amid charges he and others took unauthorized payments from the company. He faces criminal racketeering, money laundering, wire and mail fraud, tax and obstruction charges for allegedly helping to steal $84 million from Hollinger International. The allegations include the abuse of company perks -- like using the company jet for a vacation to Bora Bora. He has pleaded innocent to everything. If convicted, Black could face as much as 20 years in prison and $7 million in fines.

Born into wealth, Black is prominent in Canadian society and has written a critically praised biography of Franklin D. Roosevelt. He has counted among his friends former U.S. Secretary of State Henry Kissinger. Black is married to conservative writer Barbara Amiel Black.

The former publisher of the Chicago Sun-Times, Radler, 64, first joined with Conrad Black in 1969 when they bought the Sherbrooke Record, a small newspaper in Quebec. They bought the Sun-Times in 1994 as they assembled a global media empire that became Hollinger International.

Radler and Black left the company in 2003 amid charges they improperly diverted millions of dollars to themselves. Radler has pleaded guilty to fraud, and in one of the more sensational aspects of this trial, agreed to testify against Black and the others.

As a publisher, Radler was known for his parsimony, even turning off the escalators at the Sun-Times' old Wabash offices to save money. Radler is a native of Montreal, where his father ran a restaurant called Au Lutin Qui Bouffe -- "the elf who gorges himself."

A lawyer close to the case said Radler could receive as little as two years for cooperating.

Boultbee, 63, an accountant, is accused of illegally helping to divert $84 million from the company that owns the Sun-Times. Boultbee helped set up agreements with companies that bought Hollinger International assets and that paid Black not to compete against the new owners. The prosecution claims the non-compete payments were illegally directed to entities controlled by Black, though the money rightfully belonged to shareholders of Hollinger International. Boultbee allegedly "was the architect of much of the tax strategy" that inspired the payments, according to the indictment.

The government also claims Boultbee helped Black abuse corporate perks by facilitating the purchase of a New York corporate apartment below market prices.

Boultbee was chief financial officer of Hollinger International. He has pleaded innocent. Boultbee is represented by Patrick Tuite.

Atkinson, 59, is a Canadian attorney from the Toronto area. Atkinson was vice president and general counsel of Hollinger Inc. and executive vice president of Hollinger International. He also owned about 1 percent of Ravelston.

Atkinson's main duties at International were to oversee legal matters, and he is charged with stealing from the company. According to the government, as it became clear International was going to sell off its newspapers, Atkinson, Black, Radler and Boultbee often discussed how they felt they deserved to get some money from the company they had worked so hard to build, which was now disappearing.

Atkinson has pleaded innocent. He is represented by Benito Romano.

The defendants are charged with stealing about $84 million from Hollinger International, the former name of Sun-Times Media Group Inc., between 1998 and 2001. Where did the money come from?

Here's what the government claims: Intertec Publishing Corp. paid $75 million for International newspapers, and $2 million from the sale went to Inc. for "non-competition" agreements, which ended up at Hollinger Inc. and in the pockets of the defendants.

Community Newspaper Holdings paid $472 million, with $12 million to Inc.

Horizon Publications, owned by Radler, Kipnis and other International executives, paid $43.7 million, and $1.2 million went to Inc.

American Publishing Co., an International subsidiary, paid $5.5 million in non-compete payments to Black, Boultbee, Radler and Atkinson, though by the time the agreement was signed, APC was mostly out of the newspaper business.

Forum Communications paid $14 million; $100,000 went to Inc.

PMG Acquisition Corp. paid $59 million in October of 2000; $500,000 went to Inc.

Newspaper Holdings Inc., a subsidiary of CNH, paid $90 million; $750,000 went to Inc. An additional $9.5 million went to Black, Boultbee, Atkinson and Radler.

CanWest Global Communications paid $2.1 billion; $52.8 million went to Black, Radler, Boultbee, Atkinson and Ravelston.

MISCELLANEOUS:
Black also allegedly spent $40,000 in company money for a birthday party for his wife; used a corporate jet for a vacation trip, and bought a company-owned apartment for below-market value.

The former Illinois governor chaired Hollinger's audit committee while Black was chairman and CEO. Black was ousted over allegations he took improper payments, and angry shareholders sued the company, charging the board with failing to figure out the schemes.

A report by the company's special committee of directors called the audit committee's work "ineffective and careless over a prolonged period."

Edward Greenspan, 63, Toronto attorney for Conrad Black, has defended some of Canada's most controversial and high-profile defendants, including Nova Scotia Premier Gerald Regan; theater magnate Garth Drabinsky, and a young mother accused of throwing her baby over Niagara Falls, according to a bio posted by the University of Ottawa. He also acted in a 2001 case in which the Canadian Supreme Court ruled the death penalty unconstitutional.

Greenspan is known for his vigorous cross-examination style, which will likely be turned with full force on former Black business partner David Radler.