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Party for Black's wife was all business: witness

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Date: Monday Jun. 11, 2007 7:00 PM ET

CHICAGO — A posh birthday party for Conrad Black's wife was really a business event "masquerading'' as a social gathering and was not unlike other Hollinger International dinners, a defence witness said Monday at the former press baron's fraud trial.

"The party didn't seem to me very different from (another) Hollinger party I attended, which was not a birthday party but a party for Hollinger directors,'' said John O'Sullivan, a journalist who also wrote speeches for former British prime minister Margaret Thatcher.

O'Sullivan, who has known the Black family for more than 20 years, said he attended the dinner and considered it a "business event masquerading as a social occasion.''

His testimony was intended to support defence claims that the party at swank New York restaurant La Grenouille was partly billed to Hollinger shareholders because it was also a business event.

Prosecutors have asserted the party was an example of Black's alleged disregard for shareholders and have accused him of using company money to fund his lavish lifestyle.

The defence has said party guests such as Donald Trump, who was at the time negotiating to buy the Chicago Sun-Times building from Hollinger, were at the event at least in part to conduct informal business networking.

"I thought there were a number of people at the party who were business associates,'' O'Sullivan told Black lawyer Eddie Greenspan, noting that Trump and broadcaster Charlie Rose weren't "personal friends'' of the Blacks.

Lead prosecutor Eric Sussman tried to portray O'Sullivan as a biased witness, suggesting he owed Black "a debt of gratitude'' after the mogul helped him secure a position as an editor at the National Review magazine and offered him a job as a consultant at the National Post.

O'Sullivan disagreed with Sussman's suggestions, saying their relationship was more of a "two-way street.''

O'Sullivan is one of the final defence witnesses in the case, as the trial is expected to wind down as early as Tuesday after months of testimony. Closing arguments are set to begin next week and jurors are expected to begin deliberations the week after that.

Defence lawyers also presented an e-mail to the jury in which former Hollinger director Richard Perle alerted Black to a threatening message he received on July 4, 1999 and suggested he "take some immediate action with the British police.''

The e-mail warns Black that "the prophet of God is after him, and I am going to get him.''

"Money. Power. It all comes to nothing,'' the e-mail read. "And how do these rich people do it _ so gosh damned happy all the time? Mr. Black has never learned that dark art, and if he hasn't learned it by now, he probably never will, which is great news, at least from the point of view of this prophet.''

Black's lawyers declined to say why the e-mail was introduced as evidence, but it could be meant to support Black's use of the company's jet for a trip to Bora Bora -- a vacation prosecutors also cite as an abuse of company perks.

The defence has previously said Black took the jet for safety reasons.

The jury also heard expert testimony from Alan Funk, an accountant and former FBI agent who was hired by lawyers for Black co-defendant Mark Kipnis to review what Hollinger's auditors knew about the non-compete payments at the heart of the prosecution's case.

Black, 62, and three other former executives of Hollinger International Inc. are charged with defrauding the newspaper holding company out of millions of dollars through the sale of Hollinger assets.

Prosecutors say Black and two of his co-defendants, Jack Boultbee and Peter Atkinson, illegally diverted much of the money to themselves, with help from corporate counsel Kipnis.

Funk said he didn't find any evidence of fraud when reviewing documents used by auditors KPMG in an investigation of deals that involved non-compete payments.

"I found significant evidence of disclosure that would be inconsistent with fraud,'' he said.

"They (KPMG) had in their possession the necessary information... that would allow them to understand the nature of the transactions (and) the amount of money involved,'' he said, adding that KPMG also disclosed the information to Hollinger's audit committee.

He also testified he did not find any evidence of shredded or doctored documents, or of "cooked books."

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