Broadcaster of Anti-Kerry Film Bows to Pressure
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In the face of intense pressure from investors, lawyers, and Democratic activists, Sinclair Broadcast Group announced yesterday that it will air a cut down version of a documentary that criticizes Senator Kerry for his claims that American troops in Vietnam routinely committed war crimes.
Sinclair, which owns 62 television stations across the country, denied that its decision to package the anti-Kerry film, “Stolen Honor,” as part of a news special was influenced by a massive email and telephone campaign directed at the company by supporters of the Democratic presidential nominee.
“We do not make editorial news decisions based on political or economic pressure, and we did not in this case,” the vice president and general counsel of Sinclair, Barry Faber, told The New York Sun yesterday. However, he acknowledged that the company was concerned about its reputation and audience ratings.
“We always take into account the views of the public,” Mr. Faber said. He denied that the company had ever decided to air the film in full. However, a source familiar with planning for the broadcast told the Sun last week that was the original plan.
Sinclair officials said the “Stolen Honor” segment might be balanced by a clip from “Going Upriver,” a documentary made by a longtime friend of the senator, George Butler. The program is scheduled to air Friday evening on 40 of Sinclair’s stations, slightly fewer than half of them in battleground states. Two Sinclair stations in New York will carry the broadcast, WUTV in Buffalo and WUHF in Rochester.
A spokesman for Mr. Kerry, Chad Clanton, said the campaign has adopted a wait-and-see approach. “Sinclair Broadcasting has been all over the map on this issue. One thing that’s certain is that they have a partisan agenda,” he said. “It remains to be seen whether they decide to put their own narrow interest ahead of the public’s trust.”
Sinclair said it met last week with top officials of the Kerry campaign and invited the senator to participate in the program. There has been no response, the company said.
For Sinclair, the firestorm began 10 days ago after press reports detailed the company’s plans to broadcast “Stolen Honor,” a 42-minute documentary that includes interviews with Americans held as prisoner of war in Vietnam. In the film, 17 American veterans complain that Mr. Kerry’s 1971 Senate testimony alleging widespread war crimes aided the communists and undercut the morale of those held captive in North Vietnam.
Democrats accused Sinclair of launching an illegal, election-eve dirty trick on behalf of President Bush. They noted that company executives donate generously to Republican causes and many of the company’s stations are in states considered pivotal to the outcome of the presidential race.
The fight escalated yesterday as two investor groups announced legal claims against Sinclair. A prominent class-action and securities lawyer, William Lerach of San Diego, said he filed a legal demand with Sinclair on behalf of the pension fund of a large New York labor group, Local 1199 of the Service Employees International Union.
Mr. Lerach said the contretemps over the documentary and the ensuing fall in Sinclair’s stock price indicate the company’s executives have been acting recklessly. “A public company is just that. It is a public company. It is owned by its investors. And those in control of the public company are not permitted to allow their personal political agenda or decisions or views to impact business decisions,” Mr. Lerach said.
He also accused three brothers who are top Sinclair executives – Frederick, Robert, and J. Duncan Smith – of trading on insider information when they sold large blocks of company stock in late 2003 and early 2004. “These stock sales were timed to take advantage of the peak in Sinclair’s stock, which was due to very bullish announcements from the company,” the attorney said.
Mr. Lerach said he began investigating the company after he was approached by Local 1199 officials who were “extremely unhappy over the recent controversy.” However, the attorney, who is among the top donors to Democratic causes, insisted the lawsuit is not politically motivated. “We’re equal opportunity suers. I’ve sued plenty of big Democrats,” Mr. Lerach said.
Separately, a liberal watchdog group, Media Matters for America, threatened a similar legal action on behalf of a Wall Street investment firm that holds Sinclair stock, Glickenhaus & Co. Last night, Media Matters and Glickenhaus released statements reacting positively to Sinclair’s latest announcement and postponing any possible legal action.
Mr. Faber of Sinclair said he hopes the company’s efforts to produce a balanced program will result in the planned lawsuits being dropped.
The New York State comptroller, Alan Hevesi, joined in the complaints, writing to Sinclair on behalf of the state’s Common Retirement Fund, which holds more than 250,000 shares of stock in the firm.
“Some critics suggest that Sinclair management is more interested in advancing its partisan political views than in protecting shareholder value. They say Sinclair’s partisan agenda also risks alienating viewers, advertisers, and regulators,” Mr. Hevesi wrote, according to the Associated Press.
Meanwhile, a planned screening of “Stolen Honor” at a Pennsylvania theater last night was derailed because of fears that Democrats would disrupt the event.
The producer of the film, Carlton Sherwood, said he had sold 600 tickets for the screening at the Baderwood Theater in Jenkintown, Pa. “The theater owner pulled the plug on it because of the ‘threat of civil disobedience,'” Mr. Sherwood said.
He accused Kerry supporters of censorship. He pointed to an e-mail the Pennsylvania director of the Kerry campaign, Anthony Podesta, sent urging Mr. Kerry’s backers to block the showing of the film.
“Politely let the theater-owner know that as a member of the community, you object to the screening of this film and they should not allow ‘Stolen Honor’ to be shown on one of their screen (sic),” Mr. Podesta wrote, according to a local resident who read the e-mail to a reporter. Mr. Podesta did not return a phone call seeking comment.
Mr. Sherwood said the onslaught of Democratic criticism had taken Sinclair by surprise. “I know they’re up to their waist in alligators,” he said.
The main phone number at Sinclair headquarters in Maryland has been busy for several days. Officials there have also been deluged with e-mail objecting to the broadcast. Advertisers who do business with Sinclair and mutual funds who hold stock in the company have also been caught up in the frenzy.
“It has touched off a firestorm that has sort of snowballed into consequences they could not have foreseen,” said a broadcast industry analyst, Robin Flynn of Kagan World Media.
Sinclair’s stock price has declined substantially from its high of $15 late last year. It closed yesterday at $6.26 a share, down 23 cents. Company officials have blamed a drop in advertising revenue on bad weather.
One of Mr. Lerach’s partners, Patrick Daniels, said he doesn’t believe that explanation. “None of those same problems were confronted by Sinclair’s peers,” Mr. Daniels said.
Ms. Flynn disputed that assessment. “The whole television station industry is just starting to soften,” she said. “It’s not just a Sinclair issue.” She acknowledged, however, that a recent drop in the stock from about $8 to its current level was attributable to the flap over the anti-Kerry documentary. “The stock has definitely fallen because of this,” Ms. Flynn said.