Conrad Black's US trial hinges on executive graft

CHICAGO, Mar 12 (Reuters) Fallen press baron Conrad Black goes on trial this week in Chicago, insisting that charges of pilfering 84 million dollar in proceeds from his crumbling media empire represent the persecution of the powerful.

Jury selection begins on Wednesday in US District Judge Amy St.

Eve's courtroom in what promises to be a lengthy and complex federal trial packed with financial details that could test even Black's famously prodigious memory.

''A lot of people see Conrad Black as a martyr and a victim of an overzealous legal system,'' said lawyer Andrew Stoltmann, an expert on investment fraud who plans to watch portions of the anticipated four-month trial.

If convicted on fraud, racketeering and other charges, the 62-year-old Black, a member of Britain's House of Lords, could spend the rest of his life in prison.

Three other defendants on trial in the case are Black's former deputies, corporate attorneys Mark Kipnis and Peter Atkinson and accountant John Boultbee. All are accused of looting Chicago-based media company Hollinger International Inc.

Black has called the charges ''a smear job'' and cast himself as a ''freedom fighter'' intent on exposing his accusers.

Some critics view Black as pompous and hypocritical, one of a growing list of corporate titans who have enriched themselves at the expense of shareholders and workers, but who believe they only took what was rightfully theirs.

Black, the scion of a wealthy Montreal brewer, bought up hundreds of Canadian and US newspapers and magazines, creating one of the world's largest newspaper publishers that had 2 billion dollar in revenue at its peak in 1999.

He renounced his Canadian citizenship in 2001 to become Lord Black of Crossharbour, an honor conferred on owners of the Daily Telegraph in London -- once his empire's jewel.

Black also owned the Jerusalem Post and started the National Post in Canada, all of which have since been sold off. The Chicago Sun-Times and dozens of smaller newspapers are all that remain at Hollinger International, which has since been renamed Sun-Times Media Group Inc. Educated in history and law and the author of an autobiography, two well-received biographies and a tome about Richard Nixon due out soon, Black became a jet setter. He held forth with his extensive vocabulary at soirees at a London townhouse, a New York co-op apartment, and a Palm Beach, Florida, mansion.

His wife, conservative columnist Barbara Amiel Black, famously told Vogue, ''I have an extravagance that knows no bounds.'' Upon buying newspapers, Black and his former partner David Radler would cut costs and put Black's neoconservative stamp on the publications' editorials. Radler has pleaded guilty and will likely be the prosecution's star witness.

With Hollinger in debt, Black and Radler began in 2000 to sell off pieces of the media conglomerate.

QUESTIONABLE PAYMENTS Shareholders questioned why executives and Black's Canadian holding companies received millions of dollars in non-compete fees -- portions of the sale price that ensure a seller does not open another media outlet in the same region.

Black's cohorts described the payments as over and above the sale proceeds, or as deserved bonuses.

Black told Hollinger shareholders at a 2003 annual meeting that while there were ''some serious abuses in some large and now infamous companies, here, what we are talking about is ...

relatively small amounts of money, properly approved and fully disclosed, paid to those who built and guided this company in a short span from an embryonic state to the brink of the prosperity that does excite the hopes of all of us.'' ''Like all fads, corporate governance has its zealots and its tendency to excess,'' Black said.

An internal committee at Hollinger accused Black and Radler of operating a ''corporate kleptocracy'' that stole hundreds of millions, and the executives resigned or were ousted.

A flurry of civil lawsuits -- some brought by the litigious Black against his accusers -- and U.S. and Canadian government investigations followed, culminating in criminal charges announced in August 2005 by US Attorney Patrick Fitzgerald in Chicago.

Black and his associates were accused of diverting money to themselves or funneling it to the Toronto holding companies Hollinger Inc. and Ravelston Corp. Ltd., through which Black controlled Hollinger International.

Black's lavish spending led to charges he abused corporate perks by flying in a company plane to a vacation idyll in the South Pacific, and paying for part of his wife's birthday party and other luxuries with company funds.

REUTERS SB PM0903