A former Hollinger International Inc. executive testified that Conrad Black told him to arrange for real estate mogul Donald Trump to make remarks praising Black at a meeting of rebellious shareholders.
"Donald Trump will be one of those presenting in support of us," Black told Paul Healy, then Hollinger's vice president of investor relations, in a memo before the May 2003 shareholders meeting. "Can you ensure that Mark Kipnis has a proxy for Donald?"
Only shareholders were allowed to speak at the meeting but the proxy allowed Trump to act on behalf of shareholders and make remarks.
Healy, in his third day on the witness stand at Black's racketeering and fraud trial, testified that he had warned Black prior to the meeting that he would face rebellious shareholders.
The shareholders were upset over millions of dollars in management fees that the big newspaper holding company had paid to Black's small Toronto firm as well as payments to Black and other top executives by purchasers of community newspapers from Hollinger.
At the time, Trump had just bought the Chicago Sun-Times Building from Hollinger and he and Black were getting along well. Black asked the real estate mogul to show up at the meeting and say some kind words.
He did speak briefly at the otherwise highly contentious shareholders meeting and expressed his admiration for Black's management.
Trump, who was not accused of doing anything wrong, also was on hand for a birthday party for Black's wife at New York's swanky restaurant La Grenouille. Prosecutors say the company paid two-thirds of the $62,000 (45,960 EUR) tab.
Black, 62, is charged with racketeering and fraud. He and three other former Hollinger International executives are accused of swindling the company out of $60 million (currently 44.5 million EUR) through the sale of assets starting in 1998.
The company had decided to sell off hundreds of small community newspapers across the U.S. and Canada and received millions of dollars in return for promises not to compete with the new owners.
Millions of dollars in non-compete payments also went to two Toronto-based companies controlled by the Canadian-born Black as well as Black himself, Hollinger International chief operating officer F. David Radler and former Hollinger vice presidents John Boultbee and Peter Y. Atkinson.
Prosecutors say all four joined with Kipnis to slip the payments past the Hollinger board of directors, when the money should have gone to shareholders.
Radler testified for eight days as the government's star witness. He has pleaded guilty to fraud and is expecting a lenient 29-month sentence in return for cooperating with the government.
Boultbee, Atkinson and Kipnis have pleaded not guilty and are on trial with Black.
Under cross examination, Healy confirmed that before the contentious shareholders meeting he told Black in a memo that he was "praying for you and for Hollinger."
Healy then testified he became one of the first witnesses before a special committee of the board of directors that was investigating alleged mismanagement at Hollinger.
The special committee ended up replacing Black as Hollinger CEO the next November with its own chairman, financial expert Gordon Paris.
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