Defence lawyer Eddie Greenspan aggressively went after star prosecution witness David Radler on Wednesday, trying to paint the main accuser of his client Conrad Black as a liar.

Greenspan accused Radler, Black's longtime second in command, of sticking to a "script" the prosecutors gave him in order to avoid a long prison sentence.

Radler, who is testifying under a deal with the prosecutors, "must perform here or lose (his) deal," Greenspan said as he attempted to tear down Radler's credibility.

"You know full well that it's the prosecutors who are evaluating your testimony to determine if you're lying to anyone in this courtroom."

Radler said repeatedly that he didn't understand the question.

"You know full well that if you come off your script, you know the government will tell the judge that you're a liar," Greenspan said.

"You're putting words in my mouth, I have no script," replied Radler, who said repeatedly that he didn't understand Greenspan's questions.

Black, one of four defendants, allowed himself a smile when the cross-examination began.

Radler has already pleaded guilty to one count of fraud. He will be sentenced to 29 months in prison and fined US$250,000 if the prosecutors find him to be a helpful witness. If not, he could face more time when sentenced in June.

Radler's testimony

In wrapping up his testimony for the prosecution, Radler said he didn't tell Hollinger International's board about taking unauthorized fees from newspaper buyers because he knew it was "wrong."

Radler said he and longtime business associate Black decided to pay themselves non-compete fees from the sale of newspapers although the buyers never asked for them.

"The buyers hadn't really requested the non-competes," Radler testified during prosecution questioning.

"I knew that the process of creating these non-competes was wrong."

The fees were paid to Black and the other Hollinger executives in exchange for a promise not to compete with the buyers in those markets and to avoid paying tax.

Non-compete fees are legitimate, but prosecutors claim the defendants accepted such payments without the company's board approving them, effectively defrauding shareholders of US$60 million.

Black, 62, and co-accused John Boultbee, Peter Atkinson and Mark Kipnis maintain they didn't break the law and disclosed the payments.

Radler said in deals with Paxton Media and Forum Communications, no money had been set aside for non-compete fees, but there was $600,000 available elsewhere.

"I made the decision to allocate the $600,000," he testified.

"I told Mr. Black that there was $600,000 left and that could be allocated and he agreed -- and we allocated the $600,000" to themselves as well as co-defendants Jack Boultbee and Peter Atkinson.

Hollinger International's board was not told about the move, he said.

In another case, Radler said he and Black took a non-compete fee from American Publishing Company of $2.6 million for a single newspaper in Mammoth, Calif. -- even though both men sat on American Publishing's board.

Radler also admitted he lied to a Hollinger special committee convened in 2003 to investigate shareholder grievances, as well as to the U.S. federal government in 2004.

"I knew the consequences of totally truthful answers and was concerned about the consequences," he said of his dealings with the committee.

Radler said when he met with prosecutors and FBI agents in 2004, he wasn't entirely truthful either. "(I) was trying to rationalize some of the transactions -- I was fighting back," he said.

Radler, Black's former executive, began testifying Monday under the terms of a plea agreement that effectively ended nearly 40 years of close partnership.

In testimony on Tuesday, Radler linked the former media magnate to the alleged fraudulent skimming of money away from Hollinger International Inc.

Prosecutors asked Radler if Black had instructed him that 25 per cent of all "non-compete" fees from the sale of the Chicago-based company's assets would be paid to Hollinger Inc., a Toronto-based firm.

"He confirmed that was the plan," Radler testified Tuesday, his second day on the witness stand at Black's trial in Chicago. "He said yes, and that was it."

Black's musings

Prosecutors had memos written by Black read out at his fraud trial on Wednesday, drawing a furious response from defence lawyers, including a denied demand for a mistrial.

One of the memos referred to Black's chef and chauffeur.

"This is inappropriate and appeals to class prejudice and I move for a mistrial," Black's U.S. defence lawyer Edward Genson told Judge Amy St. Eve.

She rejected the demand and allowed lead prosecutor Eric Sussman to continue.

In one document, Black told other Hollinger International executives they should not have to take a "vow of poverty."

"We have a certain style that all these shareholders were aware of when they came in," Black said in the September, 2002 message.

In the "musing," Black said it was important not to "appease the lust for authority of the more aggressive institutional investors."

"We have pretty well won the great battle over the non-compete agreements and a decent interval has passed," he wrote. "A conciliatory gesture should be made now that could not be construed as a sign of weakness or a confession of excess."

Black felt it justifiable to have the company pick up half the cost of his chef and other hospitality expenses, given "the extent to which my London house is used for legitimate corporate entertainment, some of it quite productive at times," he wrote.

"That is not an abuse and all expenses and visits are recorded."

The jury at Black's trial in Chicago has heard about his allegedly company-funded $600,000 vacation in Bora Bora, along with an expensive birthday party for his wife, Barbara Amiel Black.

The company picked up two-thirds of that party's cost. Radler testified he didn't recall any company business being discussed at the party.

Although Donald Trump was negotiating with Conrad to buy the Chicago Sun-Times building, he was seated next to Barbara. Radler said she wasn't involved in the sale.

With files from CTV's Joy Malbon and The Canadian Press in Chicago