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How David Radler helped Lord Black's cause

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When David Radler cut a deal with prosecutors in Chicago to testify against his former business partner Conrad Black, Lord Black's lawyers vilified him as a turncoat and a rat. But Mr. Radler's plea bargain has proved to be fairly helpful to Lord Black and three other former executives of Hollinger International Inc.

That emerged yesterday when Judge Amy St. Eve approved Mr. Radler's agreement and sentenced him to serve 29 months in jail and to pay a $250,000 fine.

During a brief hearing, Judge St. Eve said she approved the plea agreement because of Mr. Radler's co-operation with prosecutors and his decision to pay more than $60-million (U.S.) to settle various lawsuits, including one filed by Hollinger and another by the Securities and Exchange Commission.

"You have committed a very serious crime," she told him. "You took a lot of money from Hollinger International at great expense to the company and the shareholders."

In her comments, Judge St. Eve indicated that she was surprised when she first saw the plea bargain, given the extent of the fraud at Hollinger. She didn't elaborate, but earlier in the hearing she said that if she used federal sentencing guidelines, Mr. Radler would have faced nearly six years in jail.

Legal experts say that by negotiating a 29-month jail sentence, Mr. Radler effectively tied the judge's hands when it came to sentencing everyone in the criminal case.

"These other defendants, in a weird way, owe a lot to David Radler for setting the bar so low," said Hugh Totten, a Chicago lawyer who has followed the case and attended yesterday's hearing.

For example, prosecutors wanted Lord Black put away for more than 20 years for three counts of fraud and one count of obstruction of justice. But during his sentencing hearing last week, Judge St. Eve said she could not justify a sentence that long for Lord Black given Mr. Radler's agreement.

She said the two were equally culpable in the fraud and she sentenced Lord Black to 6.5 years. (That was longer than Mr. Radler's sentence mainly because of the obstruction charge which only involved Lord Black.)

Two other defendants, John Boultbee and Peter Atkinson, received 27 months and 24 months, respectively, for three counts of fraud, which was also far lower than what prosecutors wanted. The fourth defendant, Mark Kipnis, was given six months under house arrest for two fraud charges even though prosecutors asked for jail time.

"This judge sort of indicated that she was shocked when she was handed the plea agreement," Mr. Totten said. "The way I interpreted what she said was, 29 months given the amount of money involved here was not what [she] thought was appropriate."

Mr. Totten added that Judge St. Eve had little choice but to accept Mr. Radler's deal. "I know it sounds strange, but in the American system, the wheels of justice would grind to an immediate halt if these plea bargains were rejected by this judge or any judge in this circumstance."

She ordered Mr. Radler, 65, to report to jail on Feb. 25. His lawyers asked that he serve time at Moshannon Valley Correctional Institution, a privately operated, low-security prison in Pennsylvania, but the final decision rests with the Bureau of Prisons. He is expected to apply for a transfer to a prison close to his home in Vancouver.

Mr. Radler built Chicago-based Hollinger with Lord Black over 30 years. At its peak, Hollinger operated hundreds of newspapers across Canada, the United States, Britain and Israel. When prosecutors began investigating allegations of fraud at the company in 2004, Mr. Radler struck a deal. He agreed to plead guilty to one count of fraud and testify against Lord Black and the others.

Yesterday Mr. Radler told Judge St. Eve that he was "saddened" by his conduct. "I made mistakes that hurt me and my family and others," he added. "I will live my life with this, and I am sorry for what I have done."

Mr. Radler's lawyer, Chicago attorney Anton Valukas, declined to comment on Lord Black's sentence. He said Mr. Radler's sentence reflected his remorse and his efforts to help Hollinger shareholders.

Mr. Radler had faced public scorn for co-operating with prosecutors, he said. "But what he did was he made a decision that he was going to try to do right by the [Hollinger] shareholders, and that's what he stood by - not withstanding all of the adverse publicity, scathing cross-examination, everything else - and I think he's done that."

Mr. Valukas declined to comment on Mr. Radler's plans to apply for a transfer to Canada. He would only say that Mr. Radler is relieved the criminal case has finally ended. "This is the first day of the rest of his life."

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