Sinclair retreats on airing Kerry film

Under mounting political, legal and financial pressure, Sinclair Broadcast Group yesterday backed away from its plan to carry a film attacking Sen. John Kerry's Vietnam record, saying it would air only portions of the documentary in an hourlong special scheduled for Friday.

The company's announcement came hours after shareholders challenged Sinclair's plans to air the program, saying the controversial broadcast might hurt their investment.

"A POW Story: Politics, Pressure and the Media," will examine the "role of the media in filtering the information contained in these documentaries, allegations of media bias by media organizations that ignore or filter legitimate news and the attempts by candidates and other organizations to influence media coverage," according to a company statement. It will air Friday on 40 of the company's stations.

Sinclair, the owner of 62 television stations, has been criticized for ordering the stations to pre-empt regular programming to air the 42-minute documentary, "Stolen Honor: Wounds That Never Heal," which features 17 former prisoners of war criticizing Kerry's 1971 allegations of U.S. atrocities in Vietnam.

The company, which previously declined comment, said reports that the film would be aired in its entirety were "inaccurate." However, Sinclair commentator and Vice President Mark Hyman had told The Washington Post the movie would air unless Kerry agreed to an interview.

Sinclair fired its Washington bureau chief Monday after he publicly criticized plans to present the documentary as news.

"The experience of preparing to air this news special has been trying for many of those involved," Sinclair Chief Executive David Smith said. "The company and many of its executives have endured personal attacks of the vilest nature, as well as calls on our advertisers and our viewers to boycott our stations and on our shareholders to sell their stock."

Democrats have complained to three federal agencies about the Sinclair special, arguing that the broadcast should be considered an illegal in-kind contribution to the Bush campaign and noting that Smith and his three brothers, who run the company, have contributed heavily to President Bush and the Republican Party.

Groups have also called for advertisers to boycott Sinclair, whose stations reach a quarter of U.S. households, many in key swing states for the upcoming presidential election.

Sinclair's stock has dropped more than 15 percent since the controversy erupted 10 days ago. Alan Hevesi, the Democratic comptroller of New York whose state pension fund holds 257,000 shares of Sinclair, questioned in a letter to the company yesterday whether airing the movie would further depress the shares.

"We have not ceded, and will not in the future cede, control of our news reporting to any outside organization or political group," said Joe DeFeo, Sinclair's vice president of news.

But Andrew Jay Schwartzman, president of the nonprofit Media Access Project, called the move "a surprising cave-in" and said the company "clearly felt a lot of pressure and this is an attempt to find a face-saving way out."

The Sinclair announcement came hours after Deborah Rappoport, a major Democratic donor with her husband, Andy, said they had offered to buy one hour on Sinclair stations. This would finance a 42-minute version of a pro-Kerry Vietnam documentary, "Going Upriver: The Long War of John Kerry," by George Butler. Rappoport said she was "deeply, deeply outraged" by Sinclair's action and was offering $1 million more than the company's usual ad rate in response.

Adding to the pressure on Sinclair, a group of institutional investors alleged yesterday that Smith's brothers sold millions of dollars in Sinclair shares late last year just before the stock began its decline. Prominent shareholder lawyer William Lerach said the family members would face a lawsuit unless they repay the company.

Lerach, who has led investor lawsuits against Enron, Time Warner and other corporations, is a noted Democratic fund-raiser. But he said his involvement is not political, spurred instead by investors who have watched Sinclair's stock slide from a high of $15 per share in late December to its close of $6.15 yesterday.

Lerach noted that Frederick, Robert and Duncan Smith sold about 1.4 million shares of stock for almost $19 million as the stock was peaking at the turn of the year. The attorney, whose clients include a New York pension fund for health care workers, said the plan to air "Stolen Honor" has further hurt the company by driving down the stock price. He said Sinclair executives "should be focusing on creating shareholder value — not pressing a controversial personal political agenda at shareholders' expense."

Also yesterday, James Beardsley, attorney for a former Vietnam veteran who is seen in an anti-war protest in "Stolen Honor," said he would sue Sinclair if it airs the movie. The veteran, Kenneth Campbell, now a University of Delaware professor, sued filmmaker Carlton Sherwood for libel this week. The movie "made him look like a liar, a fraud and a fabricator" over his descriptions of military misconduct in Vietnam, Beardsley said.

Sherwood's lawyer, Cleta Mitchell, called the suit "completely spurious," saying Campbell isn't even named in the film.