A faithful servant turns the tables

David Radler is to stand before a Chicago judge on Thursday, pleading guilty to fraud charges and jeopardizing a 36-year friendship and business association with former press baron Conrad Black.

His decision to plead guilty and co-operate with federal prosecutors shocked followers of the Hollinger saga, as Mr. Radler was always considered the consummate No. 2 to Lord Black of Crossharbour's very public and pugnacious No. 1. Where Lord Black courted society and the high life, Mr. Radler's reputation was one of penny-pinching and micro-managing, paring newspaper operations to the bone in pursuit of profitability.

Their friendship became the stuff of legend -- some of it written by Lord Black himself. And the unravelling of the relationship yields a complex and contradictory portrait of Mr. Radler and his management style.

In a series of interviews with people who have worked for him, Mr. Radler comes across as a parsimonious individual who occasionally took packets of sugar from restaurants, yet also a quiet philanthropist with a passion for baseball, art and professional wrestling. While sometimes brash and arrogant in public, Mr. Radler kept his personal life so private that company executives rarely visited his home and many did not even know that he has a brother.

Mr. Radler "was scary if you didn't know him, but once you got to know him he was a lot less scary," said one long-time former Hollinger manager.

While Lord Black made Hollinger's corporate manoeuvres, it was up to Mr. Radler to run the operations. "Black was on the bridge and Radler was in the engine room, that was how I would look at it," said Adam Zimmerman, a former director at Southam Inc., which Hollinger owned in the 1990s.

This week Mr. Radler steps onto the bridge, a first and formal step in what many believe will lead to the U.S. Department of Justice launching legal proceedings against Lord Black.

Mr. Radler, who declined to be interviewed, faces seven criminal counts of fraud for allegedly helping to divert $32-million (U.S.) into Hollinger's corporate executives' pockets, including his own. Prosecutors allege Mr. Radler cheated Hollinger International Inc.'s investors and Canadian tax officials. His co-defendants are Hollinger lawyer Mark Kipnis, who has pleaded not guilty, and holding company Ravelston Corp., which has not yet been arraigned.

Franklin David Radler was born in Montreal on June, 3, 1942, into a family where entrepreneurship runs deep. His grandfather owned a men's hat business in New York and moved to Montreal after the First World War. According to family legend, the millinery business slumped when the roofs of cars were lowered and men could no longer comfortably wear hats while driving.

The family changed course and went into the restaurant business. David's father, Herbert, owned a Montreal restaurant with his brother Mac called Au Lutin qui bouffe (the elf who gorges). It became a favourite meeting place for political strategists in the provincial Union Nationale party. The Radlers were staunch backers of the party and young David was a keen organizer.

Mr. Radler graduated from McGill University in 1963 with a degree in commerce and then went off to Queen's University where he earned an MBA in 1967. He worked briefly as a consultant to Indian Affairs, and helped native bands sell art from a booth during Expo 67.

It was through the family's Quebec political connections that in 1966 Mr. Radler met Peter White, a friend of Lord Black's who was also a Union Nationale activist. The three bought the Sherbrooke Record three years later for $18,000 (Canadian), "and quickly set about cleaning house," according to Lord Black's autobiography, A Life in Progress. They sold it in 1977 for $865,000.

Throughout the 1970s, the partners' acquired a string of small newspapers in British Columbia and made investments in several other businesses, including the Slumber Lodge motel chain in B.C. and a cluster of jewellery stores in California called Jessop's. Mr. Radler moved to Vancouver to be closer to the operations and married Rona Lassner in 1972. They have two daughters: Melanie and Melissa.

As the Hollinger empire expanded globally in the 1980s and 1990s, Mr. Radler ran most of the North American papers from an office in Chicago. In 2002, he boasted that he'd managed 600 newspapers in his career.

His work habits were legendary. Mr. Radler has said that he did not use e-mail or a cellphone, preferring face-to-face meetings and lengthy telephone calls instead. He worked so hard that Hollinger executive David Dodd once told a colleague he was moving out of his vacation home in Palm Springs, Calif., because it was too close to Mr. Radler's own property and he never got a chance to rest.

"I would say he is a very driven person to whom financial success meant everything," Mr. Zimmerman said. "He wasn't a person given to any small talk and I don't think he had many friends."

But others said Mr. Radler could be remarkably generous and frequently gave money to the families of employees who died. "He would do what would appear to be random acts of kindness and not tell people about it," said one former colleague.

While he enjoyed fine art and often decorated his office with expensive paintings, Mr. Radler could also be so frugal he more than once flew his parents in for visits on discount airlines. He also had few hobbies that anyone could recall other than baseball and wrestling.

"I remember he used to call me late at night, frequently, and he'd be watching wrestling on TV while he was talking to me," recalled Verne Shaull, who ran dozens of Hollinger papers in the United States and Canada for 14 years.

It is Lord Black's account of Mr. Radler's management style at the Sherbrooke Record that has partly set in stone his reputation as a fearsome, interfering micro-manager. Lord Black describes an employee marching into Mr. Radler's office to present a petition of grievances, only to be fined 2 cents for wasting a sheet of paper.

Mr. Radler bolstered this image of himself as the consummate hatchet man when he told the Kent Royal Commission on Newspapers in the early 1980s that his chief contribution to Canadian journalism has been "the three-man newsroom, and two of them sell ads."

He has admitted to counting the desks in the newsrooms of papers he was considering purchasing, and deciding on the spot how many people to cut -- even before he met any of them.

At board meetings, "he was the taciturn one. Conrad did all the talking," said Hal Jackman, who served twice as a Hollinger Inc. director. "Conrad looked at [Radler] as the guy who put everything together after he did the creative flare stuff."

One Southam board colleague, Montreal investment adviser Stephen Jarislowsky, says Mr. Radler was sometimes too quick to acquiesce to Lord Black's schemes.

Mr. Jarislowsky said he once battled Lord Black over management payments that were paid to Southam executives. The funding approval was "pushed through" the board's audit committee, but Mr. Jarislowsky thought it should have been presented to the compensation committee, on which he served.

Mr. Jarislowsky later asked Mr. Radler for an explanation. "He looked at me and said 'Stephen, don't be naive, you know Conrad.' I fault David for having closed an eye to all kinds of things."

Some of Mr. Radler's former colleagues have scathing memories of his meddling in the operations of individual newspapers. "He was constantly demanding that we write negative stories about non-advertisers and positive stories about advertisers -- which, of course, we didn't do," Chicago Sun Times publisher John Cruickshank, who served under Mr. Radler, told The New York Times last month. "He wasn't averse to quality journalism; he just thought it should go on someplace else."

Mr. Radler was also known for his lofty approach to underlings.

In October, 1998, he arrived in Kelowna, B.C., to tour the Kelowna Capital News, which Hollinger had recently acquired. At the time, the News was in a tough battle with a couple of rival local papers. The Hollinger jet caused a stir at the airport by pulling into a spot reserved for commercial airlines.

"That was just an act of arrogance to begin with because it wasn't supposed to be there," recalled Paul Winkler, who ran the News at the time and later successfully sued Hollinger for wrongful dismissal. "It felt like I was touring [with] Julius Caesar. He just sort of strolled around. He wasn't demonstrative, there was just this sort of air of arrogance."

But some former colleagues say Mr. Radler was a hands-off boss, who seldom interfered with day-to-day operations.

Donald Babick, who was president of the Southam newspaper group when Hollinger owned it in the late 1990s, said his boss had a light management touch.

One of the few instances of direct meddling that he recalled was when Mr. Radler asked that the Vancouver Sun beef up the space devoted to baseball. "He said 'you don't have good enough baseball coverage.' That was about the extent of his interference."

Even Mr. Radler's rivals praise his business acumen. David Black, the B.C. community newspaper publisher (who is not related to Conrad Black) described Mr. Radler as an astute manager who always bought newspaper properties for the long term.

"When he and Conrad started buying papers in B.C. after their experience in Sherbrooke, they were ahead of the industry," Mr. Black said. "They were buying up small papers that nobody else wanted, at inexpensive prices, and making something of them."

Cost cutting often turned money-losing papers around, Mr. Black said. "They've flourished, and some of them are in towns that have been hurting economically . . . The acid test is that the papers are surviving well, 35 years after they started to buy them. They haven't run them down."

Mr. Winkler, who fought Mr. Radler and Hollinger in court for years, said his former adversary could appear extraordinarily vulnerable. He remembered a point during the trial over his wrongful dismissal case when Mr. Radler was being aggressively cross-examined. "My whole life was in turmoil as a result of this man and in a strange way I almost felt sorry for him. I can't really describe why. There was at times this incredible arrogance and then there was another side of him that just seem kind of shy and disconnected."