Sun-Times' ex-publisher pleads guilty

Former Sun-Times Publisher David Radler on Tuesday admitted he participated in a scheme to steal $32 million from the paper's parent company, Hollinger International, for himself, his colleagues and a company he partly controlled.

Radler stood before U.S. District Judge Amy St. Eve and pleaded guilty to a single count of mail fraud.

"Are you guilty?" she asked.

"I am," he said, nodding.

In exchange for his guilty plea and for testifying for the government -- potentially against his boss and partner, former Hollinger Chairman Conrad Black -- the government seeks just two years and five months in prison for Radler instead of the five years he is eligible for.

Black, a Canadian-turned-British subject who now refers to himself as "Lord Black of Crossharbour," has not been charged with any crime, though he has been sued for fraud by the U.S. Securities and Exchange Commission and Hollinger and its shareholders.

Radler, 63, agreed he "repeatedly abused his authority and fiduciary obligations" to Hollinger shareholders. He and other executives disguised multimillion-dollar bonuses to themselves as "non-compete" agreements so that they could hide them from shareholders and dodge Canadian taxes.

Black and Radler built Hollinger from a small collection of Canadian newspapers to a worldwide chain that at its zenith owned the Sun-Times, the Daily Telegraph in London and the Jerusalem Post. Along the way they created a series of interlocking companies and looted $542 million from the papers, according to a suit by Hollinger International.

The plea agreement comes closer to implicating Black than the indictment against Radler and other defendants last month: "Radler understood that this decision to disguise $12 million as a 'non-compete' fee was ultimately being made by the Chairman Black, since none of the other International executives were in a position to make a decision of this magnitude," the agreement states.

What about Conrad Black?

Asked if Black will be charged and if Radler will testify against him, either in the criminal case, the financial fraud case or both, SEC Associate Regional Director Tim Warren said, "For that we will have to stay tuned."

Black and Radler no longer run Hollinger International, which owns the Sun-Times and more than 100 other Chicago area newspapers.

Asked if he was in good health, Radler told St. Eve, "I hope so."

Though he is accused of pilfering millions of dollars, Radler, in a modest gray suit jacket and dark pants, appeared the most inexpensively dressed of the four men standing before St. Eve, including his attorney, Anton Valukas, and prosecutors Eric Sussman and Thomas Shakeshaft.

The government says Radler has already paid back the $7 million it would have sought in restitution. But he must pay $250,100 in fines and any restitution St. Eve orders. He still faces multiple claims in civil court.

Had Radler and the other executives fully disclosed to shareholders the generous payments to themselves, calling them "bonuses" and paying taxes on them, shareholders likely would have rebelled, said shareholder Rob Kirkpatrick, a managing director of Cardinal Capital Management Inc. of Greenwich, Conn.

"When you look at the value of what they were doing and the assets they were selling, to give away most of the profit a company makes on a particular transaction to the executives is a little screwy, isn't it?" Kirkpatrick said.

'Conditionally' guilty

St. Eve "conditionally" accepted Radler's guilty plea, postponing sentencing because it is contingent upon his cooperation with authorities. He was released after posting $50,000 of his $500,000 unsecured bond. He is free to travel back and forth to his home in Vancouver. And he can apply to serve his sentence in a Canadian prison.

He declined comment as he walked, then ran, out of court Tuesday, through clicking cameras from American and Canadian media, into a waiting cab.

He later issued this statement: "I regret the obvious pain this whole affair has caused for my family, friends and business colleagues, and I am relieved that I can now begin the process of making amends and moving on with my life."

Black declined comment.