Second Thots

Sometimes one has to step back, take pause, and have some "second thots"

Tuesday, May 15, 2007


David Radler and Conrad Black

I wrote the following comment on a legal blog. I'm not sure if it's going to be posted, so I decided to cut and past it here as well. It's a basic question pertaining to the Conrad Black trial. Answering it would help me understand this trial a lot better than I do now.

Here is the question:

There's something about this trial that I don't get. Maybe someone can help clarify it for me.

My understanding is that the basic crime here is one of taking non-compete payments without approval from the company.

Those payments did take place. Yet it's the contention of the defence that only Radler committed the crime.

How does that wash, if all the accused received the payments?

In other words, where is the illegality, and can only Radler be responsible for it?

I hope that makes sense.

The trial is determining whether or not the payments were illegal. The payments were approved and signed by the Board of Directors. The prosecution is trying to say they hid this from them, when really they stamped their approval on them.


Well, the defence is saying that Radler is the one who committed the crime. How can he have done so without Black and the other defendants being a party to it?

That's where my confusion lies: Radler's complicity in all of this.

In essence, Conrad Black's freedom lies in the notion that whatever scheme there was, it was Radler's and Radler's alone.

It's a bit of a tough sell, if you ask me.


It is not a crime to take a non-compete payment that has been authorized by the board of directors of the company. At issue is whether the board of directors was appropriately informed by the management that the non-compete payments were going to the them. They are now defendents. The problem is that Radler has confessed to the crime of misleading the board about the payments and he says all the defendents knew about it and acted in the same manner with the same intent as he did. Black et al say that they didn't try to mislead the board and that the evidence shows this: 1. there are dozens of financial statements, reports, and filings distributed to the SEC and the public shareholders with the information about the payments clearly stated in them. Did the board read them - they say they didn't - they skimmed the documents and signed them which is probably true. It would impossible to prove fraud if Radler wasn't a Rat and said they all tried to hide them when it was his intent to defraud the board. 2. Radler is the real criminal and, appropriately, he is going to jail. Is Black? I believe the trial is attempting to determine if Black et al knew the board was being deceived. It appears that Black agreed to the non-compete payments (as you would if you were busy in London and Paris) and we are talking about a lot of tax free money, and left it to Radler to deal with. Being a creepy criminal he did try to slip them under the door because he practically invented the concept years ago at Hollinger and he knew you would have to sell it and it wouldn't be easy. However, because Black isn't a complete idiot, and actually knows how to run a company, he had the payments passed by expensive Canadian legal counsel who approved them. Would you commit a crime and then ask a $400 per hour legal expert to tell you that you had just committed a crime? That's why Black has been protesting his innocence so loudly. He really feels he did not commit a crime. He certainly didn't sit down with Radler one day and say let's rip everybody off and it's kind of risky but we could get away with it if we're lucky. He may be convicted - it would be an injustice - but his real problem is having tied himself up so tightly over the years to a criminal like Radler.


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