David Radler, the U.S. government's star witness in Conrad Black's fraud trial, took the witness stand Monday to testify against his former friend and business partner.
Radler was asked to spell out the specifics of the circumstances that brought him to the courthouse in Chicago.
He told the jury about his plea bargain with the prosecution— that he had pleaded guilty to fraud and admitted "to taking money from Hollinger International in circumstances that were not allowed."
The Montreal-born Radler— who was given a reduced, 29-month prison sentence in exchange for his full co-operation with U.S. prosecutors— is expected eventually to testify about a conspiracy to loot Hollinger International.
"My obligation is to tell the truth," he told the jury Monday, acknowledging that if he lies, the plea bargain will be thrown out.
No eye contact made
Radler avoided making eye contact with Black as his former business partner and former friend of almost 40 years looked on.
He told the court his first meeting with Black came in 1969, when Radler was 27 and Black was 25. He described how he had been so impressed with the young Black that he decided to go into business with him.
"I was impressed with Mr. Black's knowledge and his ability, and I thought he'd be a great partner to have," Radler said.
The pair joined with a third partner to buy the Sherbrooke Record— the first acquisition in what was to become a huge worldwide media empire known as Hollinger International.
Under questioning from the prosecution, Radler described a long professional and personal connection with Black. He spoke ofhow both men and their wives vacationed together, and how they were constantly in touch as they built their media company.
"We discussed every aspect of every newspaper we had," he said. "I discussed with Mr. Black on any major decision [that] could be considered an executive decision."
By the turn of the millennium, he and Black were presiding over a public company which paid them millions of dollars a year in management fees and bonuses. But those fees started to dry up, as a troubled Hollinger began unloading assets.
Radler said herecalled discussing that with Black.
"Generally," he said, "I was concerned with the decrease in management fees, and so was he … and the consequences of that decrease."
'Inside view' expected
Radler's testimony may be the turning point in the case, which has heard a week of prosecution witnesses who were sometimes forced by defence lawyers to backpedal or admit they only skimmed documents they signed.
"Radler is somebody who is going to be able to, for the first time in this trial, give the jurors an inside view of what was going on with a group of defendants in this case," criminal lawyer Terry Campbell told CBC News.
Black, also originally from Montreal, and three others have been charged with swindling Hollinger, a major newspaper holding company, out of $60 million US, largely by selling off small papers and pocketing payments from the purchasers.
The payments were made in exchange for promises not to compete in the areas where the papers operated.
Payments not unusual
Such payments are not unusual, but federal prosecutors said the money should have gone to Hollinger International shareholders, not to Black and his fellow executives.
Black and former Hollinger executives John Boultbee, Peter Atkinson and Mark Kipnis said they did nothing illegal.
Robert Kent, a former prosecutor, told CBC News that Black's lawyers will argue that Radler is just trying to save his own skin.
"The defence will come after him as hard as they can," he said. "They have a lot of cross-examination material, starting off with his co-operation sentence, which gives him an incentive to lie to please the government."
Defence lawyers have been trying to establish that Black and Radler often had separate responsibilities, saying Black handled Eastern Canada and Britain, while Radler ran Western Canada and the United States.
Prosecutors have tried from the trial's first week to portray Black and Radler as a team, with members of the audit committee all testifying that they were a "duo."