Conrad Black's Co-Defendants Distance Themselves From Him

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March 22, 2007. The lawyers for two of Conrad Black's co-accused addressed the court yesterday and immediately exposed rifts between their approach and that of Conrad Black's defence team. On the one hand, their statements have the potential of assisting the prosecution's case against Conrad Black. On the other hand, concern remains that the prosecution can overplay their cards and that the lead prosecutor, Jeffrey Cramer, is no match for stars in Black's defence team (who took a back seat today).

At this stage it appears the case could go either way for Black or the prosecution.

Defendant Mark Kipnis

Ron Safer(left) lawyer for Mark Kipnis (right)Ron Safer, (seen on the left) the lawyer for Conrad Black's co-accused, Mark Kipnis, (seen on the right) a former Hollinger International general counsel, put as much distance between his client and Conrad Black - and the other defendants - as he could manage.

Lawyer Ron Safer said Kipnis should not be put in the same category as the others who stand accused in this trial - Conrad Black, Jack Boultbee who is former Hollinger chief financial officer, and Peter Atkinson a former Hollinger vice-president. Safer said the four trials need to be kept separate.

Kipnis, an in-house lawyer at Hollinger, is charged with two counts of tax fraud and nine counts of mail and wire fraud in connection with what the prosecutions alleges are $60 million US in illegal non-compete payments - money that should have gone to Hollinger's shareholders rather than to a handful of Hollinger executives.

Mr. Safer told the jury that while Mr. Kipnis prepared many of the documents for the deals, he did so in close consultation lawyers at Torys LLP, a Toronto-based law firm that had advised Black and Hollinger for years.

He acknowledged mistakes were made with the documents, but that a lawyer at Tory, Beth DeMerchant also made mistakes while only his client has been charged. Nevertheless, it was Mr. Kipnis who pointed out the errors or issues and as a result of his diligence, members of the Hollinger board were made aware of the mistakes. In the end, the board was fully aware of the transactions and the audit committee gave their approval.

He said his client Kipnis was an honest, hard-working man doing the grunt work as "best he could." "He (Kipnis) has had during the entire course of his employment at Hollinger at most five conversations with Conrad Black," Safer said. "He was an outsider." In addition, Kipnis did not receive any money alleged to have been taken illegally.

Defendant Jack Boultbee

Jack Boultbee was Hollinger International former Chief Financial Officer during the time Conrad Black was CEO. The court heard from Jack Boultbee's lawyer Gus Newman, who also distanced his client from Conrad Black. Boultbee, he said, while chief accountant, had nothing to do with Black's expenses account. As such, Boultbee was not involved with Black's surprise $62,000 (Black charged $40,000 to the company as an expense) birthday party Black gave for his wife Barbara Amiel. Boultbee was not responsible for organizing the party and did not attend the party. Nor, was he connected with the Black's expensive Pacific island vacation.

Financial transactions at Hollinger International, including Black's expense accounts, were reviewed and approved by Hollinger's auditors, KPMG.

First Witness: Gordon Paris

Gordon Paris, the man who took over as Hollinger International's CEO from Conrad Black, was the first prosecution witness to testify in the court.

Paris was on the stand for about an hour during which time he was constantly interrupted by Black's lawyer, Ed Genson. The interruptions prompted Judge Amy St. Eve to ask Genson to let witnesses finish speaking before asking another question. "I'm sure it's not the last time I'll have to ask you that," she said to Genson. Genson replied smiling, "I'll apologize every time."

Under vigorous cross examination by Genson, Paris said that while Black "was quite knowledgeable" about Hollinger's financial strategy, Black was not as knowledgeable as Boultbee, who Paris called "the architect of the financial strategy."

Mr. Paris, a former investment banker, stepped down as Hollinger's chief executive officer last December but remains as a director on the board of Sun-Times Media Group Inc.