A lawyer for one of Conrad Black's co-defendants said Monday that his client's recollection about the disputed payments at the heart of the fraud trial in Chicago cannot be trusted because he was not involved in negotiating deals.

Michael Swartz said his client, former Hollinger lawyer Mark Kipnis, only suggested there may be something wrong with so-called "non-competes" when he was interviewed by a special committee in 2003 because he was confused after a long day of questioning.

"This was at the end of a long day and Mark was telling you his recollection about events that had happened three years earlier," Kipnis lawyer Michael Swartz told Jonathan Rosenberg, a lawyer with the special committee.

Swartz said Kipnis told the committee that payments received by executives at the newspaper holding company in connection with a deal with CanWest Global Communications in 2000 were bonuses.

But Swartz said Monday that Kipnis didn't have any first-hand knowledge because he wasn't involved in negotiating that deal.

"He told you he was called in for a week to help out with the paperwork," Swartz told Rosenberg.

"He didn't know the actual manner in which the non-compete payments in the CanWest negotiations were characterized."

The CanWest fees — and those received in other newspaper sales — are at the heart of the U.S. government's case against Black and three others.

Prosecutors say the Montreal-born Black, Kipnis, Peter Atkinson and Jack Boultbee orchestrated a scheme to illegally pocket $60 million US in fees in exchange for a promise not to compete with the buyers of some Hollinger International newspapers.

They say the so-called non-competes were actually bonuses that the executives paid themselves, but that they characterized them as non-competes in order to avoid a tax hit.

Kipnis is not accused of taking any money but of helping to facilitate the alleged fraud.

Defence lawyers say the fees were legitimate and required by the buyers. They blame any possible wrongdoing on Black's longtime partner, David Radler. Radler is also the prosecution's star witness.

Rosenberg has also testified that Kipnis told him he believed some of the non-competes were "silly."

Swartz said that comment did not refer to any final deal actually drafted by Kipnis, but rather to an initial purchase agreement that was later re-written.

"My impression is that he thought the whole thing was silly," Rosenberg said.

Black appeared relaxed during Rosenberg's testimony, chatting with reporters during a morning recess and often conferring with his lawyers inside the courtroom.

Paul Healy, a former vice-president of investor relations at Hollinger International, will testify after Rosenberg and is expected to talk about shareholder complaints as well as Black's spending habits.

Judge Amy St. Eve still has to rule on what issues Healy can discuss — especially in relation to a shareholder who called Black a "thief."

Prosecutors are also expected to use Healy's testimony to back up their allegations that Black swindled shareholders when he paid about $3 million to buy a New York apartment from Hollinger in 2000 because that was the same price the company bought it for six years earlier.

Black has said the deal was made at fair market value because he had to spend $2 million in renovations.