The Osterley Times: Black's co-accused deny collaborating with media mogul

Thursday, March 22, 2007

Black's co-accused deny collaborating with media mogul

The co-defendants at the trial of Conrad Black are seeking to set as much distance as they can between themselves and the fallen media mogul. Their lawyers have been keen to point out that neither Jack Boultbee, the former finance chief in Lord Black of Crossharbour's Hollinger empire, nor Peter Atkinson, a former vice-president, enjoyed anything like the lavish lifestyle that Black indulged in. Indeed, Boultbee's lawyer went as far as to describe him "a Canadian all his life", which can only be a reference to Black's giving up his Canadian citizenship in order to become a member of the British House of Lords.

Another defendant claimed not to have made any money at all from the dealings:

Mark Kipnis, the Hollinger lawyer who allegedly signed off a string of questionable deals that enriched the newspaper magnate and his associates, never made a penny from the agreements. He was an "outsider" who had met Lord Black fewer than half a dozen times, according to his lawyer.

They are all basically arguing that the non-competition agreements that they signed were genuine and a way of compensating them for not starting up rival newspapers, although the prosecution allege that such financial rewards were the property of the shareholders rather than of these individuals.

"As he sits here now," Mr Newman said, "Jack Boultbee is not a free man." He cannot take part in any bid for a newspaper group until November 2007. "You talk about that being a sham agreement. This man's life is controlled by that, quote-unquote, 'sham' agreement."

As far as I can work out, these non-competition agreements seem to be the greatest part of the prosecutions case against the other three, so I imagine that much time will be spent discussing exactly why these men felt that the compensation belonged to them rather than to Hollinger and it's shareholders.

However, it's interesting that at such an early stage of the trial that all three should be seeking to distance themselves from Black's profligacy.

And Mr Newman went on to distance Mr Boultbee from Lord Black's lavish spending on Hollinger expenses. He was not at the $60,000 birthday party thrown for Lady Black, or on the couple's vacation to the South Pacific island of Bora Bora, which prosecutors say cost Hollinger $250,000.

Mr Kipnis, 60, a former general counsel at Hollinger International, was portrayed as "an honest man, a hard-working man, a man who did the best he could with the information he had". Far from being the "inside man" who helped Black and his cohorts perpetrate their crimes, as prosecutors said, Mr Kipnis was an outsider who repeatedly asked Hollinger's outside accountants and lawyers what details of the non-competition agreements needed to be disclosed to the rest of the board and to shareholders.

One of the most interesting things about these non-competition agreements is that the companies the men were dealing with did not insist upon them, although I have read that Black told his board that they did. This will be fascinating when we get to it. Because if these men were insisting on non-competition agreements, rather than the people they were selling their newspapers to, then they were essentially demanding that payment be paid to themselves rather than to their shareholders.

And, of course, we will all wait to see what David Radler, Lord Black's right-hand man for more than three decades, has to say when he gets to court. In 2005, Mr Radler negotiated a plea deal, accepting one charge of fraud and a lenient 29-month prison sentence in return for testifying against Lord Black.

In the meantime, the other defendants are making clear that they wish to be tried separately from Black in the jurors minds.

"Out of all these tens of millions of dollars, do you know how much Mark Kipnis got from these payments?" his attorney, Ron Safer asked jurors. "Nothing. Zero." All the defence attorneys stressed to the jury that they would be expected to judge the defendants' guilt or innocence separately according to the evidence. "This is not about sending a message to corporate executives," Mr Newman said.