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CHICAGO, May 1 � Former Illinois Governor James R. Thompson, a Winston & Strawn attorney who is the firm’s former chairman, testified today that certain payments that went to four Hollinger International executives on trial in Chicago should have been disclosed to the company audit committee he served on, but weren’t. Thompson, who was the U.S. Attorney in Chicago before he was elected governor, told the jury that the committee wasn’t informed of millions of dollars in payments to former Hollinger chairman Conrad Black and three other former Hollinger executives that should have gone to the company. Thompson is one of the government’s witnesses in a trial that is in its seventh week and is expected to last three to four months. U.S. prosecutors allege that Black, former Hollinger corporate counsel Mark Kipnis, and former Hollinger executive vice presidents John Boultbee and Peter Atkinson bilked the company and its shareholders of about $84 million dollars through such illegitimate payments and personal spending. The government’s star witness, David Radler, has yet to testify. Radler, another former Hollinger executive and a longtime business associate of Black’s, has pleaded guilty to the government’s fraud changes. About $60 million was funneled to Black, Boultbee and Atkinson through non-compete agreements linked to Hollinger’s sales of some of its smaller newspapers in the late 1990s, the government says. The non-compete agreements were ostensibly to keep the Hollinger executives from competing with the new owners of the assets, but U.S. prosecutors say the money should have gone to the company and shareholders. Thompson, who was a board member and, from 1998 to 2003, chairman of the audit committee, said that such payments should have been disclosed to and approved by the committee and that knowledge of them might have affected compensation to a separate company that provided the executives’ management services. He said he counted in large part on Kipnis to disclose pertinent corporate information. “I would have expected that he would have told that to the audit committee,” Thompson said of Kipnis’s duty to report all Hollinger transactions with another company that might also benefit the company’s executives. Thompson said he agreed with Hollinger’s strategy at the time to sell the smaller newspapers to focus on the larger ones, such as the Chicago Sun-Times and Jerusalem Post. Under questioning by U.S. prosecutor Eric Sussman, Thompson said that Black and Radler agreed on the company’s strategy and worked closely on all aspects of Hollinger’s business, contrary to the picture painted in opening statements by defense counsel.

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