Monday, August 22, 2005

When the Right-Hand Man Turns

The indictment of former Chicago Sun-Times publisher F. David Radler, along with the former general counsel for Hollinger Inc. and Lord Conrad Black's private holding company, Ravelston (see earlier post here), signals a significant step forward in the government's civil and criminal investigation of large payments made to Black and other senior officers of Hollinger, the media holding company. A New York Times article (here) discusses Radler's decision to plead guilty and cooperate in the government's investigation of Black, the former CEO of Hollinger.  Radler's role as publisher of the Sun-Times, one of the many newspapers owned by Hollinger, certainly does not appear to have been based on merit, at least if quotes in the Times story are to be believed: "He wasn't averse to quality journalism; he just thought it should go on someplace else" and "I always used to think: 'How stupid can he be? He's the guy with the jet and the money and three homes.' "  For 36 years, Radler was Black's confidante and behind-the-scenes numbers person, so his knowledge of Hollinger's business dealings will be crucial to building a case against Black, who is the obvious target of the continuing investigation.  Much like Scott Sullivan was the key to unlocking Bernie Ebbers' involvement in the fraud at WorldCom, Radler can give investigators a roadmap to the diversion of company funds and perhaps other schemes to siphon assets from Hollinger, a Canadian company whose shares are traded on the New York Stock Exchange so it is subject to the jurisdiction of federal prosecutors and the SEC.  Of course, much like Sullivan, Radler's every peccadillo will be subject to scrutiny to determine whether he can be a credible witness. (ph)

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Fraud, Media, Prosecutions | Permalink

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