Ex-gov Thompson said payments approved: lawyer

BLACK TRIAL | Contradicts earlier testimony

A lawyer testifying in Conrad Black's fraud trial Friday said Thompson told him the Hollinger International committee he chaired approved controversial payments to Black and other former executives.

The testimony by New York lawyer Christopher Paci contradicts what Thompson said on the witness stand last month -- that the audit committee wasn't told about and didn't approve more than $31 million in "non-compete" payments.

"He said that yes, the related-party transactions had been approved by the audit committee, and the disclosure was correct," said Paci, under questioning by Michael Swartz, an attorney for Black co-defendant Mark Kipnis.

Black, former Chicago Sun-Times publisher David Radler, Kipnis and two other former Hollinger executives are accused of helping to steal about $84 million from the company, mostly through unjustified non-competes. Hollinger International is the former name of Sun-Times Media Group.

In 2002, Paci had been a lawyer with Sherman & Sterling, doing research work for a proposed Hollinger bond issue. The law firm questioned non-compete payments made between 1999 and 2001, and asked the audit committee about them.

Paci said Thompson assured him during a December 2002 call that the transactions were approved.

Thompson and his two fellow committee members earlier testified that the payments were not approved.