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Witness: Black approved payments

Former publisher of the Chicago Sun-Times David Radler is due to get a lenient 29-month prison sentence after cooperating with federal authorities in the Conrad Black prosecution. (John Gress/Reuters)

CHICAGO -- The star witness at media mogul Conrad Black's fraud trial testified yesterday that Black personally approved millions of dollars in payments to himself and others from the sale of community newspapers owned by the Hollinger International empire.

F. David Radler, who was second in command of Hollinger International, tied Black for the first time directly to the planning behind what federal prosecutors describe as an $84 million looting of the company.

Radler said the diversion of funds began when Black ordered that 25 percent of all so-called "noncompete" fees paid to Hollinger International in the large-scale sell-off of community papers would be paid to a smaller, sound-alike company that he controlled, Toronto-based Hollinger Inc.

"He confirmed that was the plan," said Radler, who has admitted stealing millions from Hollinger as part of the alleged scheme and is due to get a lenient 29-month sentence for cooperating.

Before the sell-off was over, Black, Radler, and two other executives were themselves getting millions of dollars in noncompete payments, Radler said. The payments were in exchange for promises not to return to the circulation areas of the newspapers to compete with the new owners.

Black, 62, is charged with bilking Hollinger International, largely through selling the community papers and payments from the purchasers.

Prosecutors say all of the money, not just a portion, should have gone to Hollinger International shareholders.

Black and his codefendants, former vice president Peter Atkinson, former chief financial officer John Boultbee, and former Hollinger lawyer Mark Kipnis, say they did nothing illegal.

Boultbee and Atkinson allegedly received noncompete payments, while Kipnis is accused of helping to arrange the transactions.