April 24, 2007 — Hollinger International Inc.’s former finance chief John Boultbee hid details of non-compete payments paid to him and former Chairman Conrad Black, an accountant testified at their fraud trial.

Marilyn Stitt, of the accounting firm KPMG, said she demanded Hollinger disclose the $71 million in payments if it wanted a clean audit in 2002. Her testimony yesterday in Chicago federal court supported prosecution claims that the men looted the company by disguising theft as non-compete fees.

“If they were not disclosed, we would have to qualify our audit report,” Stitt said she told Boultbee in 2002. Boultbee denied there were other payments, she testified.

The $71 million stemmed from Hollinger’s 2000 sale of newspapers to CanWest Global Communications Inc. Records show the executives got additional fees from sales to Osprey Media Holdings Inc. and the sale of U.S. community newspapers, prosecutors claim. Buyers paid the defendants so they wouldn’t compete in the markets Hollinger was abandoning.

THE Scottish National Party suffered a significant knockback yesterday after a failed attempt to grab the trade-union vote from under the nose of Labour.

Nicola Sturgeon, the deputy leader of the SNP, swept into the annual meeting of the Scottish Trades Union Congress, although she was not invited to address delegates.

Her visit was timed to follow a keynote speech by Jack McConnell, the First Minister, thereby taking attention away from his message. In a tour of stalls, she claimed the SNP is gaining ground with the trade unions because of disillusionment with the Iraq war and the party’s stance against Trident’s replacement.

However, in a humiliating swipe, Grahame Smith, the general-secretary of the STUC, said he was not even aware of Ms Sturgeon’s visit.

He said: “Nicola Sturgeon did not even have the courtesy to tell me she was coming. I am not bothered she has come - political parties are welcome - but it would be good if they came along and paid attention to everything we are saying, not because there could be party-political advantage.”

Earlier the STUC, which represents more than 600,000 workers in Scotland, had voted overwhelmingly to reject independence.

Mr Smith said independence would leave Scotland with unmanageable debt and the uncertainty of a referendum would adversely affect the economy. However, he hinted the organisation may well vote in favour of considering more powers for the Scottish Parliament in a debate today. He said: “Devolution has been a success, but that does not mean we want to sit back on our laurels. We are putting forward other policies, propositions.”

Mr Smith went on to say the STUC is against the SNP’s major policy of local income tax because of fears it is unfair.

Earlier, Mr McConnell likened local income tax to the poll tax.

He reassured the unions of Labour’s dedication to a “more fair” system of local taxation based on property. He said: “The council tax is not perfect - few taxation systems are. But I believe in progressive taxation, and without a tax on property the wealthiest get off scot-free.”

Mr McConnell also attacked the SNP’s priority of independence as “the wrong values for Scotland”.

But Ms Sturgeon said she would stick to a positive campaign. She said: “I leave it to the First Minister to campaign in the gutter if he wants to. The SNP has chimed with the trade-union movement because of our policies such as offering an alternative to PFI [private finance initiative].”

Related topics

- http://news.scotsman.com/topics.cfm?tid=757
http://news.scotsman.com/topics.cfm?tid=757
- http://news.scotsman.com/topics.cfm?tid=324
http://news.scotsman.com/topics.cfm?tid=324
- http://news.scotsman.com/topics.cfm?tid=782
http://news.scotsman.com/topics.cfm?tid=782

A REPORT into Scotland’s most notorious child sex abuse scandal has concluded that Orkney Islands Council was negligent and an eight-year-old girl should not have been taken into care, The Scotsman has learned.

The child, now an adult, is demanding 100,000 compensation, claiming her childhood was destroyed when she was taken away from her family by social services.

The landmark case is being brought by May Willsher, 24, who was removed from her family home by social workers in November 1990. The following year, a further nine children were snatched in dawn raids from their South Ronaldsay homes and taken into local authority care.

It was alleged that the children, aged between eight and 15 at the time, had been the victims of ritual abuse, and that there was a paedophile ring operating on the island. A sheriff ruled later that the evidence was seriously flawed and the children were returned home.

A summary of the confidential report, seen by The Scotsman, refers to a catalogue of alleged mistakes on the part of the council. The author, described as an expert in social work, is critical of the standard of care and the council’s failure to adopt recommendations made in the light of the Cleveland child abuse enquiry.

It is claimed those carrying out the children’s interviews lacked knowledge and experience and there was no proper recording of the interviews. Crucially, the report summary says there was a lack of willingness to believe what the children seemed to be saying - that they had not been abused.

The expert raises concerns about “poor standards of practice” and it is understood there are no records in relation to Ms Willsher at all for the period of February 1987-9.

Last night the woman’s lawyer, Cameron Fyfe, said that if a financial settlement could not be reached, he would proceed with an action for damages at the Court of Session.

“We instructed an expert social worker who considers that there was negligence on the part of Orkney Islands Council.

“We have now intimated a claim for compensation to the council and have asked them if there is any room for negotiation at this stage.”

Ms Willsher, who now lives in England, has always maintained that she was the victim of a “witch hunt” by overzealous social workers.

“We kept telling them that we had not been abused, but they wouldn’t listen. The interview techniques used were designed to break us down.”

A judicial inquiry by Lord Clyde criticised social workers, police and child care agencies.

Sheriff David Kelbie, who threw out the original case, said the children had been subjected to cross-examinations designed to make them admit to being abused.

Ms Willsher has always insisted that no abuse took place on Orkney. She remains deeply critical of the interview techniques, and said she was under intense pressure from social workers to give them the “evidence” they wanted.