Veteran journalist testifies in support of Conrad Black

A journalist who once worked for former British Prime Minister Margaret Thatcher took the stand Monday to testify for Conrad Black in the former media baron’s fraud trial, telling jurors that a lavish party Black threw in 2000 was a legitimate business event.

The $62,000 party for Black’s wife, Barbara Amiel Black, at La Grenouille restaurant in New York was “a business event masquerading as a social occasion,” said John O’Sullivan, a veteran editor and columnist who once worked for Thatcher as a special advisor.

Prosecutors say Conrad Black, 62, fraudulently charged the company that ran his former newspaper empire, Hollinger International Inc., $40,000 for the party, which they contend was a social affair.

Black and three codefendants are in the 13th week of a trial on charges that they defrauded the company of $60 million. In addition, Black is accused of abusing certain corporate perks, such as using a company plane for a holiday in Bora Bora and charging the bulk of the cost of the New York birthday party to the company.

O’Sullivan, a syndicated columnist who is editor at large of the National Review and senior fellow at the Hudson Institute, described the New York event as “social networking.”

During his cross-examination, prosecutor Eric Sussman suggested that O’Sullivan owed Black “a debt of gratitude” for getting him installed as editor in chief of National Interest, a quarterly international affairs journal, and providing him a job as advisor to the opinion page of the National Post, a newspaper Black founded and later sold.

To make his point, Sussman read what he said was a memo from National Interest Publisher Irving Kristol before O’Sullivan’s appointment at the journal, explaining that he didn’t want O’Sullivan to work there.

“What changed was Conrad Black funded the National Interest to the tune of $400,000,” Sussman said.

O’Sullivan said the Nixon Center in Washington also bought a half interest in the publication and “they asked me to become editor.”

O’Sullivan was among the final witnesses presented by the defense before it is expected to rest its case this week. Closing arguments could begin Monday.

A defense witness who is an accountant and an expert on fraud offered his opinions that Hollinger International’s auditors were aware of payments to executives and companies they controlled that are at issue in the trial.

“All the essential information was disclosed to the auditors,” said Alan Funk, a former FBI white-collar investigator.

Funk said he based his findings on watching parts of the trial and his review of documents including internal papers of Hollinger’s auditors, KPMG.