- The Washington Times - Wednesday, May 2, 2007

CHICAGO (AP) — Former Illinois Gov. James R. Thompson endured three hours on the witness stand yesterday as defense lawyers ripped into his performance as director of media mogul Conrad Black’s Hollinger newspaper conglomerate.

Mr. Thompson acknowledged Tuesday that as head of the audit committee of the Hollinger International board, he did not read key documents carefully and failed to notice $15.6 million in payments that are the focus of Mr. Black’s federal fraud indictment.

When Mr. Thompson returned to the stand yesterday, Mr. Black’s defense attorney, Edward Greenspan, repeatedly questioned the former governor’s testimony that he failed to notice 11 references to payments made to Mr. Black and other Hollinger executivesin financial and regulatory documents.

Mr. 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.”

Mr. 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,” Mr. Greenspan said.

“That is false,” Mr. Thompson said, raising his voice.

Mr. Black 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 “noncompete” payments, which guaranteed that Hollinger would stay out of circulation areas, should have gone to Hollinger shareholders and not into the pockets of Mr. Black and two of his three co-defendants.

Mr. Thompson was questioned about the $15.6 million paid to Mr. Black and other Hollinger executives in 2000 and 2001 after the sale of a number of community newspapers.

The payments, which included $7.2 million for Mr. Black, were disclosed in 11 financial and regulatory documents starting in early 2002.

Whether Mr. 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 “related-party transactions” — in which company executives benefit directly from deals they make on behalf of the company.

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