Radler quietly building media empire

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This article was published 20/07/2007 (6898 days ago), so information in it may no longer be current.

AS star witness for the U.S. government during the criminal trial of Conrad Black, David Radler portrayed himself as a contrite former newspaper executive who was prepared to pay the price for his frauds.

To that end, just days before the trial began in March, he agreed to pay a fine of $28.7 million US to the U.S. Securities and Exchange Commission and nearly $64 million US in restitution to settle a lawsuit with Hollinger International Inc.

He also negotiated a plea bargain with the U.S. Attorney for the Northern District of Illinois that will allow him to serve a maximum sentence of 29 months, likely in a Canadian federal prison, in exchange for his testimony.

Even so, Black’s former business partner and trusted lieutenant is still very much a newspaper proprietor who has been quietly amassing a burgeoning community newspaper empire with his daughter.

Corporate filings show that five weeks before the criminal trial in Chicago began, a company headed by Melanie Radler purchased a number of small U.S. newspapers.

Melanie Radler is the eldest daughter of David Radler, Hollinger’s former chief operating officer and Black’s business partner for 38 years.

RISN (Rhode Island Suburban Newspapers) Operations, a private company incorporated in late 2006 with Melanie Radler as president, purchased four daily newspapers for $8.3 million US on Feb. 5, 2007.

RISN also owns the Southern Rhode Island Newspapers, five small weekly papers with a combined circulation of about 13,000 in 2007.

Melanie Radler, who could not be reached, once worked at Winston & Strawn, the law firm that former Illinois governor James Thompson at one time chaired. Thompson was chairman of the audit committee at Hollinger International Inc., which was managed by Black and David Radler during the time the U.S. government alleges that $60 million US was misappropriated by the senior executives in the form of non-compete payments.

Roland McBride, the former chief financial officer of Hollinger International subsidiary American Publishing Co., is listed as RISN’s vice-president and secretary. He is also listed as chief financial officer of Horizon Publications Inc., which David Radler founded while still at Hollinger.

In a November 2005 indictment against Black and his co-defendants, U.S. prosecutors alleged that the former press baron, David Radler, Peter Atkinson and Jack Boultbee received $5.5 million US in non-compete payments. According to the U.S. government’s indictment, the Hollinger executives received the money “not to compete with a company that was, for all intents and purposes, no longer in the newspaper business.”

A special committee of independent directors investigating the fees identified McBride as the American Publishing officer who signed the non-compete cheques to Black, Radler, Atkinson and Boultbee.

When defence lawyers attempted to ask questions relating to Radler’s new business ventures, they were successfully shut down by the U.S. government’s objections.

Radler’s other companies include HPMS 2003 Inc., a Delaware company incorporated on May 15, 2003, which lists both Radler and his daughter as president. McBride is documented as corporate secretary.

He is also listed as chief financial officer of Horizon Publications Inc., which Radler still controls. As Black’s legal troubles required him to rearrange his finances, the press baron and his wife Barbara Amiel sold Radler their minority stake in Horizon Operations last year for $16 million US.

According to the U.S. government’s indictment, Black and Radler received about $1.2 million US in non-compete payments when Hollinger sold some of its publications to Horizon in 1999 for $43 million US. Prosecutors alleged the two Hollinger executives, who were also partners in Horizon, “had in essence, negotiated an agreement with themselves … not to compete against themselves.”

Horizon was formed in 1999 and owns nearly 30 community newspapers in the U.S., as well as the Thunder Bay Chronicle-Journal, the Kelowna Daily Courier and the Penticton Herald in Canada.

Radler and his daughter are shown as presidents of a handful of small subsidiaries of Horizon that were set up in the U.S. four years ago, including HPC of Texas Inc., which lists Mark Kipnis, a former Hollinger International lawyer who was found guilty of three counts of mail fraud, as director and a vice-president, and McBride as secretary.

Another, HPC of Indiana Inc., lists Radler and his daughter as presidents.

Radler’s nearly $28 million settlement in March with the U.S. Securities and Exchange Commission prohibits him from acting as an officer or director of a publicly traded company. But that has no impact on Radler’s interests in private companies such as Alta Newspaper Group Limited Partnership, which owns Alberta papers such as the Lethbridge Herald, the Medicine Hat News and the Taber Times.

Last September, Vancouver-based publisher Glacier Ventures International Corp. paid $28.2 million for a 50 per cent stake in the Alta Newspaper Group. As part of the transaction, Alta borrowed $15 million from Glacier.

Radler has declared that he is a shareholder in Alta, but has not revealed the size of his stake. During the criminal trial, Radler testified that Black held a $4.7 million equity position in the company, and that Atkinson held a $289,297 stake through his wife.

–CanWest News Service