FacebookTwitterGoogle+RedditEmail

Sinclair Broadcasting’s Air War

Sinclair Broadcasting Group has tried to influence the outcome of elections long before the media company became a lightning rod for criticism due to its decision to air a controversial documentary ten days before the Nov. 2 election critical of Democratic Presidential candidate John Kerry’s activities during the Vietnam War.

Two years ago, Duncan Smith, vice president of Sinclair, gave then Maryland GOP gubernatorial candidate Robert Ehrlich extensive use of a luxury helicopter Smith owned and billed Ehrlich’s campaign-at a discounted rate of $1,000 an hour-only after an inquiry by the Baltimore Sun. Smith’s company, Whirlwind Aviation, Inc., rents out the aircraft for $2,500 an hour. “Ehrlich used the helicopter at least six times during and after the gubernatorial campaign,” according to a Nov. 20, 2002 Baltimore Sun story. Smith said at the time that the remaining fee of more than $13,750 would be picked up by Whirlwind and listed by the company as an “in-kind” contribution to Ehrlich’s campaign.

The campaign donation appeared to violate campaign finance laws because it wasn’t reported in a timely fashion. Moreover, the donation raised ethical issues for Sinclair. The media company owns two television stations in Maryland and was providing Ehrlich’s campaign with favorable news coverage, while attacking Democratic incumbent, Kathleen Kennedy Townsend.

“If you’re an entity that owns a news outlet that is supposed to provide fair and balanced coverage of the campaign, and yet at the same time are providing aid to one of the candidates in the campaign, that puts them in a severe position of conflict,” Christopher Hanson, who teaches journalism ethics at the University of Maryland’s Philip Merrill College of Journalism, told the Sun. “I don’t see any way around that.”

Sinclair never told its television viewers that it gave Ehrlich use of Smith’s helicopter during its coverage of the campaign. Furthermore, none of the trips Ehrlich took in the helicopter were reported in campaign finance documents his committee filed months after Ehrlich first started using the helicopter, a violation of state law requiring donations to be listed when they are received. Sinclair’s Smith refused to comment about the two-year old scandal.

But the conflict went even further and it highlights the problems with relaxing federal rules governing media ownership. While Ehrlich campaigned for governor, a campaign that he eventually won, he also lobbied the Federal Communications Commission on behalf of Sinclair who was embroiled in a licensing dispute with the agency. The FCC chastised Ehrlich for intervening on Sinclair’s behalf without disclosing that the company provided him with use of its helicopter.

In September, Sinclair and Ehrlich once again made headlines as a result of the media company’s cozy relationship with the governor. Sinclair produced a series of tourism ads in which Ehrlich appeared and waived its production fee on the condition that the state of Maryland purchase $60,000 worth of time on a Sinclair-owned station to air them, a deal which Ehrlich agreed to.

A week after the 9/11 terrorist attacks, Sinclair Chief Executive David Smith and his three brothers who control the media company handed down an edict to their news and sports reporters, and even a weatherman, at the company’s flagship Baltimore television station, WBFF, requiring the broadcasters to follow up each on-air report with a statement conveying full support for President Bush and the war on terror.

The Sun reported that several journalists objected on the grounds that it would undermine their objectivity. Reporters and management, however, reached a compromise. The message read by reporters on-air said that it came from “station management.”

“Still, according to at least four people at WBFF, some staffers believe they now look as though they are endorsing specific government actions,” the Sun reported in Sept. 18, 2001 story. “Several people interviewed at WBFF described the choice as “no-win”: do something that could erode their reputations as objective journalists, or appear unpatriotic and uncaring toward the victims of last week’s terrorist attacks.”

Sinclair also aired spots on its 60 other stations during the aftermath of 9/11 declaring support for President Bush and other government leaders to battle terrorist groups

The controversies continued to pile up.

Then in December of 2001, Sinclair was fined $40,000 by the FCC in December 2001 for exercising illegal control of business partner Glencairn Ltd., the FCC determined after spending three years investigating the companies’ relationship.

The FCC’s three Republican commissioners said Sinclair and Glencairn were liable for misinterpreting FCC policies. Democratic Commissioner Michael Copps wanted the FCC to pursue harsher penalties against Sinclair, saying Sinclair has repeatedly ‘stretched the limits’ of FCC ownership rules. “Several factors contributed to the FCC’s finding that Glencairn’s president and former Sinclair employee Edwin Edwards did not exercise control of his companies,” according to a Dec. 1, 2001 report in the trade magazine Broadcasting & Cable.

“His incorrect report on the amount of debt Glencairn would assume with the purchase of several Sullivan stations. Purchase rights held by Sinclair for Glencairn stations at prices well below market rate. Glencairn’s agreement to sell all but two of its stations to Sinclair as soon as the FCC relaxed rules restricting ownership of local TV stations,” the trade publication reported.

The controversies surrounding Sinclair’s blatant political leanings took its toll on the company’s stock, but none more so than an announcement the company made on Christmas Eve 2002 by Sinclair’s board of directors who voted in favor of investing $20 million in cash in Summa Holdings Ltd., which owns auto dealerships, retail tire franchises and a leasing company controlled by Sinclair CEO David Smith.

In a post-Enron world, the deal appeared to be a serious conflict-of-interest. Sinclair said Summa would spend money to advertise its auto dealerships on Sinclair-owned television stations. The deal sent Sinclair’s stock plummeting 17 percent on Christmas Eve, a historically light day for trading, and sparked shareholder outrage, with many stockholders calling for a Securities and Exchange Commission investigation and threatening to file shareholder lawsuits.

Sinclair told its shareholders at the time that it set up a special committee of outside directors to evaluate the investment and approved the deal, saying a conflict did not exist.

“Because the automobile industry represents the largest category of advertisers for television stations, and because Summa is a profitable and well-run company, we believe that the Summa investment is an attractive one for Sinclair,” said communications attorney Martin Leader, who chaired the committee of outside directors.

Now, two years later, Sinclair plans to air a controversial documentary on Friday, 10 days before the Nov. 2 election, highlighting Democratic Presidential candidate John Kerry’s antiwar activities during the Vietnam War. But the move is backfiring on the company big time.

More than 80 of Sinclair’s advertisers have abandoned the media company’s five-dozen television stations since last week, according to National Public Radio, due to fears of a massive public boycott. Moreover, Sinclair’s stock has been battered over the past two days, falling 10 percent to settle Tuesday at a 3 year low of $6.35-a direct result of its decision to air the anti-Kerry film, “Stolen Honor,” on a majority of its television stations.

The company’s decision to broadcast the documentary and its impact on Sinclair’s shares has led to another shareholder revolt and at least one prominent securities litigator, William Lerach, has threatened to take legal action against the company.

But on Tuesday, David Smith, Sinclair’s chief executive, said Sinclair would not air the anti-Kerry documentary “Stolen Honor.” Instead, Sinclair stations will broadcast a “special one-hour news program” entitled “A POW Story: Politics, Pressure and the Media,” which will “focus in part on the use of documentaries other media to influence voting, which emerged during the 2004 political campaigns, as well as on the content of certain of these documentaries.”

“The program will also 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 the news release.

But, according to the company’s news release, excerpts of “Stolen Honor” will be aired “in the context of the broader discussion outlined above” and will discuss the allegations surrounding Senator John Kerry’s anti-Vietnam War activities in the early 1970s raised by a number of former POWs in “Stolen Honor.”

Joe DeFeo, Sinclair’s Vice President of News said, “As with all news programming produced by Sinclair’s News Central, ‘A POW Story’ is being produced with the highest journalistic standards and integrity. We have not ceded, and will not in the future cede, control of our news reporting to any outside organization or political group. We are endeavoring, as we do with all of our news coverage, to present both sides of the issues covered in an equal and impartial manner.”

Sinclair claimed on Tuesday that company executives have met privately with members of Kerry’s campaign, “including a recent face-to-face meeting with senior campaign officials, for approximately two weeks in order to negotiate participation in the special by either Senator Kerry or his designee.”

Kerry has declined Sinclair’s invitation.

Smith said those involved in producing the documentary “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. In addition, and more shockingly, we have received threats of retribution from a member of Senator John Kerry’s campaign.”

A spokesman for the Kerry campaign vehemently denied the allegations, and Wall Street doesn’t buy it either. Many of Sinclair’s largest shareholders have said privately that Smith has failed to take responsibility for the firestorm he created and has blamed Democrats for the toll his actions have taken on the Sinclair’s finances.

Indeed, as Jim Glickenhaus, general partner of Glickenhaus & Co., a Wall Street firm whose clients own about 6,100 shares of Sinclair stock, said Tuesday in an interview with CBS Marketwatch, Sinclair “management is not acting in the interest of shareholders. By showing something that’s clearly propaganda, they are damaging the (broadcast) network.”

JASON LEOPOLD is the former Los Angeles bureau chief of Dow Jones Newswires where he spent two years covering the energy crisis and the Enron bankruptcy. He just finished writing a book about the crisis, due out in December through Rowman & Littlefield. He can be reached at: jasonleopold@hotmail.com

 

More articles by:

JASON LEOPOLD is the former Los Angeles bureau chief of Dow Jones Newswires where he spent two years covering the energy crisis and the Enron bankruptcy. He just finished writing a book about the crisis, due out in December through Rowman & Littlefield. He can be reached at: jasonleopold@hotmail.com

September 19, 2018
Bruce E. Levine
When Bernie Sold Out His Hero, Anti-Authoritarians Paid
Lawrence Davidson
Political Fragmentation on the Homefront
George Ochenski
How’s That “Chinese Hoax” Treating You, Mr. President?
Cesar Chelala
The Afghan Morass
Chris Wright
Three Cheers for the Decline of the Middle Class
Howard Lisnoff
The Beat Goes On Against Protest in Saudi Arabia
Nomi Prins 
The Donald in Wonderland: Down the Financial Rabbit Hole With Trump
Jack Rasmus
On the 10th Anniversary of Lehman Brothers 2008: Can ‘IT’ Happen Again?
Richard Schuberth
Make Them Suffer Too
Geoff Beckman
Kavanaugh in Extremis
Jonathan Engel
Rather Than Mining in Irreplaceable Wilderness, Why Can’t We Mine Landfills?
Binoy Kampmark
Needled Strawberries: Food Terrorism Down Under
Michael McCaffrey
A Curious Case of Mysterious Attacks, Microwave Weapons and Media Manipulation
Elliot Sperber
Eating the Constitution
September 18, 2018
Conn Hallinan
Britain: the Anti-Semitism Debate
Tamara Pearson
Why Mexico’s Next President is No Friend of Migrants
Richard Moser
Both the Commune and Revolution
Nick Pemberton
Serena 15, Tennis Love
Binoy Kampmark
Inconvenient Realities: Climate Change and the South Pacific
Martin Billheimer
La Grand’Route: Waiting for the Bus
John Kendall Hawkins
Seymour Hersh: a Life of Adversarial Democracy at Work
Faisal Khan
Is Israel a Democracy?
John Feffer
The GOP Wants Trumpism…Without Trump
Kim Ives
The Roots of Haiti’s Movement for PetroCaribe Transparency
Dave Lindorff
We Already Have a Fake Billionaire President; Why Would We want a Real One Running in 2020?
Gerry Brown
Is China Springing Debt Traps or Throwing a Lifeline to Countries in Distress?
Pete Tucker
The Washington Post Really Wants to Stop Ben Jealous
Dean Baker
Getting It Wrong Again: Consumer Spending and the Great Recession
September 17, 2018
Melvin Goodman
What is to be Done?
Rob Urie
American Fascism
Patrick Cockburn
The Adults in the White House Trying to Save the US From Trump Are Just as Dangerous as He Is
Jeffrey St. Clair - Alexander Cockburn
The Long Fall of Bob Woodward: From Nixon’s Nemesis to Cheney’s Savior
Mairead Maguire
Demonization of Russia in a New Cold War Era
Dean Baker
The Bank Bailout of 2008 was Unnecessary
Wim Laven
Hurricane Trump, Season 2
Yves Engler
Smearing Dimitri Lascaris
Ron Jacobs
From ROTC to Revolution and Beyond
Clark T. Scott
The Cannibals of Horsepower
Binoy Kampmark
A Traditional Right: Jimmie Åkesson and the Sweden Democrats
Laura Flanders
History Markers
Weekend Edition
September 14, 2018
Friday - Sunday
Carl Boggs
Obama’s Imperial Presidency
Joshua Frank
From CO2 to Methane, Trump’s Hurricane of Destruction
Jeffrey St. Clair
Maria’s Missing Dead
Andrew Levine
A Bulwark Against the Idiocy of Conservatives Like Brett Kavanaugh
T.J. Coles
Neil deGrasse Tyson: A Celebrity Salesman for the Military-Industrial-Complex
FacebookTwitterGoogle+RedditEmail