Ex-board member admits missing error
BLACK TRIAL | Documents saying payments were approved were 'flat wrong,' but he didn't fix them
Testifying in former press baron Conrad Black's fraud trial, former Hollinger board member Richard R. Burt said for a second day that he had missed a phrase in financial disclosure documents that said "independent directors" had approved certain non-compete payments to Black and other executives.
Burt said that statement was "flat wrong" and that he and other directors had not approved the payments, but he hadn't caught and corrected the error in the documents.
"You were being paid $5,000 a meeting and $35,000 a year and you didn't read them?" asked Edward Genson, an attorney for Black.
Black and three other former Hollinger executives are accused of helping to steal about $84 million from the company, primarily through unjustified "non-compete" payments skimmed from the sales of newspapers. Hollinger International is the former name of the company that owns the Chicago Sun-Times.
A fifth executive, former Sun-Times publisher David Radler, has pleaded guilty and will testify.
Burt is the first of three audit committee members to testify. He will be followed Friday by economist Marie-Josee Kravis and next week by former Illinois Gov. James R. Thompson, the committee chair.
Their testimony is important to the government's case, since prosecutors have alleged that millions of dollars in non-compete payments either were not presented to or approved by the audit committee and board, or were approved based on false information.
Burt, a former ambassador to Germany and a veteran of several corporate boards, reiterated several times during his testimony that he relied on management to bring important matters like the non-competes to his attention.
Genson also tried to knock back Burt's assertions that Black and Radler worked as a close team. Black's defense position is that Black and Radler handled separate areas of the business, and Radler was behind U.S. newspaper deals that led to allegedly illegal non-compete payments. Burt confirmed that it was Radler, not Black, who made presentations at audit committee hearings.
But Burt couldn't say that Black and Radler worked in separate spheres: "I don't see the compartmentalization you describe," he said.