Tuesday's Auditor Examination

BNN had an interview with Paul Waldie (1:55 PM ET), which discussed Marilyn Stitt's testimony from this morning. Her testimony under direct examination was about the concerns she had about the non-compete payments to the defendants and ex-defendant David Radler, and the questions she raised about non-disclosure and audit committee approval of them. Today, she was shown a lot of internal KPMG documents that showed KPMG knew of them since 1999, but had never raised the issue. She replied that she didn't know about those documents, because she was not with the Chicago office that handled Hollinger International's accounts. Her cross-examination is not finished yet; it may be this afternoon. Richard Burt is scheduled to appear whenever she's finished. His story about Conrad Black's lawyers filing motions to block David Radler's settlement package has a six-paragraph write-up on Ms. Stitt's testmony, including cross-examination, at the bottom of it.

A report by Romina Maurino, which has been webbed by 680 News, describes Ms. Stitt sticking to her guns even when shown facts that she had been unaware of. "Unlike previous witnesses who admitted to making errors in their advice to Hollinger and its executives, Stitt remained confident and firm, dismissing attempts by the defence to link the CanWest and U.S. deals." Unswayed, she testified that even when she had made errors, she was (in effect) wrong for the right reasons.

Bloomberg's Andrew Harris and Joe Schneider recount both the direct and the cross-examination in their report. It notes that "[h]er testimony in federal court in Chicago belies prosecutors' claims that the defendants hid the payments....'My staff did a great job,' Stitt, a prosecution witness, said as she defended the firm's auditors, while being questioned by defense attorneys during her second day of testimony." (Since she and her staff were in the Toronto office, this statement of hers in't directly relevant to the Chicago office's performance on the Hollinger accounts in 1999 and 2000.)

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Mark Steyn notes a recent tendency on the part of prosecutor Julie Ruder to object on the basis of "'asked and answered,'" which often is overruled. Evidently, defense counsels are trying to check for internal inconsistency in Ms. Stitt's testimony.