Black trial gets testy
CHICAGO – Former Illinois Gov. James R. Thompson endured three hours on the witness stand Wednesday as a pair of defense attorneys ripped into his performance as a one-time director of media mogul Conrad Black’s Hollinger newspaper conglomerate.
Thompson acknowledged Tuesday that as head of the audit committee of the Hollinger International board, he had not read key documents carefully and failed to notice $15.6 million in payments that are now the focus of Black’s federal fraud indictment.
When Thompson returned to the stand on Wednesday, Black’s defense attorney Edward Greenspan repeatedly questioned Thompson’s claim that he failed to notice 11 separate references to payments made to Black and other Hollinger executives contained in financial and regulatory documents.
Thompson said more than two dozen times that he skimmed the documents and at one point said, “I should have read it word for word.”
Greenspan capped his cross examination by suggesting that the four-term Republican governor and two other members of the Hollinger International board lied when they claimed ignorance about the payments.
“I’m going to suggest to you, Governor Thompson, you read all of these things and approved all of these things and when there was some criticism of them you all conveniently forgot,” Greenspan said.
“That is false,” Thompson said, raising his voice.
Black, 62, is charged with swindling the Hollinger International newspaper holding company out of $84 million, largely by selling off newspapers and pocketing side payments from buyers.
Prosecutors say these “non-compete” payments that guaranteed Hollinger would stay out of circulation areas should have gone to Hollinger shareholders, not into the pockets of Black and two of his three co-defendants.
Thompson was questioned over the $15.6 million paid to Black and other Hollinger executives in 2000 and 2001 following the sale of a number of community newspapers.
The payments, which included $7,197,500 for Black alone, were disclosed in 11 financial and regulatory documents starting in early 2002.
Whether Thompson knew about the payments is essential because Hollinger documents filed with the Securities and Exchange Commission and elsewhere say the company’s independent directors approved them.
Approval by independent directors who don’t have a stake in the company is required by the New York Stock Exchange for so-called related-party transactions – in which company executives benefit directly from deals they make on behalf of the company.