In Re Application of STAR STATIONS
OF INDIANA, INC. For Renewal of Licenses of Stations WIFE AM-FM,
Docket No. 16612 Files Nos. BR-1144,
BRH-1276
FEDERAL COMMUNICATIONS COMMISSION
19 F.C.C.2d 991 (1969)
RELEASE-NUMBER: FCC 69-992
September 17, 1969 Adopted
ACTION:
DECISION
Marcus
Cohn, Paul Dobin, and Joel Levy, on behalf of Star Stations of Indiana, Inc.;
Philip N. Baker, on behalf of Ronald Mercer; and Thomas B. Fitzpatrick, Leo I.
George, Larry M. Berkow, and William A. Kehoe, on behalf of the Broadcast
Bureau, Federal Communications Commission.
BY THE
COMMISSION: COMMISSIONER BARTLEY DISSENTING; COMMISSIONER
JOHNSON DISSENTING AND ISSUING A STATEMENT IN WHICH COMMISSIONER COX JOINS;
COMMISSIONER H. REX LEE CONCURRING AND ISSUING A STATEMENT.
[*991] BACKGROUND
1. The history of this proceeding is accurately
reflected in the "Initial Decision" of Hearing Examiner Thomas H.
Donahue (F.C.C. 67D-73, released December 19, 1967), and hence will not be
repeated here. Exceptions to the
initial decision, a statement in support, and a brief were filed by the Chief,
Broadcast Bureau. Exceptions to the
initial decision and a supporting brief were filed by Star Stations of Indiana,
Inc. n1 Oral argument
was held on February 10, 1969.
n1 Star Stations of Indiana
submitted a motion for leave to file a brief 6 pages in excess of the 50-page
limitation set out in our rules. We
grant this motion.
2. This proceeding involves applications for
renewal of the licenses of stations WIFE and WIFE-FM,
n2 See our public notice of June
18, 1963, 28 F.R. 6243, regarding the use of audience ratings.
3. Accordingly, on May 17, 1965, applications
were filed for renewal of the WIFE AM and FM licenses. Once more we were unable to make the
requisite finding that renewal would serve the public interest. This time, the applications were designated
for hearing on issues seeking a determination of whether, during the short-term
license period, fraudulent contests had been held and whether false invoices
and affidavits of performance had been rendered to advertisers and/or agents
misrepresenting the times of presentation of commercial spot announcements,
resulting in overcharges and overpayments.
The
matter of the contests
4. The facts as to the Eaton water-filter
contest are accurately set forth in the initial decision, and we agree with the
hearing examiner that WIFE's actions with respect thereto constituted a fraud. The argument is advanced by WIFE that there was
no fraud because Eaton received that for which it bargained, i.e., a number of
spot announcements. We believe,
however, that it was implicit in the agreement that the filters would be
awarded to persons who had at least listened to the announcements and had
participated in the contest as a result, with consequent advertising benefits
to Eaton. The false report to Eaton was
obviously made for the purpose of concealing the fact that there had been no
entires in the contest, perhaps because there had been no listeners to the
announcements, a fact which was likely to discourage future business. No other reasonable purpose has been
suggested to us, and none is indicated by the record. We note, however, that the examiner made no effort fasten direct
responsibility for this dereliction on Don Burden, the licensee's controlling
stockholder, vis-a-vis Ronald Mercer, the station manager. We also note that whereas prior to the
hearing, Mercer had executed an affidavit assuming all culpability for the
episode, at the hearing he indicated that his acts were at Burden's direction
to "go get some winners." While we cannot resolve this dispute, we do
in any event fix responsibility on the licensee since it is fully responsible
for the conduct of its officers. See Continental
Broadcasting, Inc., 15 F.C.C. 2d 120, recondieration denied, 17 F.C.C. 2d 485
(1969), and cases therein cited.
5. While we adopt in the main the hearing
examiner's findings of fact 7-10, our independent examination of the record and
exhibits discloses that there is no support for his conclusion that the public
was misled in the conduct of the mystery Santa Claus contest. We are satisfied that the award at random of
Top Value stamps to one entry from each store complied with the rules and was not
unfair to any party. We do discern that
47 correct guesses as to the "Mystery Santa Claus," out of 5-10,000
entries, were not replaced in the bags from which the random drawings at the
station were made, but this we consider as de minimis carelessness and not
fraud. We further agree with the
Broadcast Bureau that while WIFE was on notice well before the close of the
contest that there had been submitted more than enough correct entries to
account for all of the prizes to be awarded, this matter does not warrant
further consideration.
[*993]
The matter of the false and misleading bills and affidavits
6. As set forth at length in the initial
decision (which we adopt in this respect), there is no question but that during
its probationary 1-year renewal period, WIFE furnished numerous statements of
account to clients along with affidavits of performance which contained false
and misleading information with respect to the times and dates purchased
advertising was broadcast. the record
contains at least 10 instances, conceded by the applicant, where specific
instructions were give to change the times in the affidavit from the times of
actual broadcast. n3 It is also clear that the licensee
took no steps to insure that more spots would not be booked for a particular
hour than could be or, under the commercial policy adopted by the station,
would be broadcast. In fact the record
shows that the station's aggressive promotion and sales policies encouraged
overbooking and that a control book used by the former owner to prevent such a
happening was deliberately abandoned.
The practice of false billing pursued by WIFE is rendered even more
reprehensible by the fact that bills were supported by affidavits certifying
that the "broadcasts were made according to the official station
log." Although testimony was introduced to indicate that these affidavits
were pro forma and that no particular significance was attached to them by
those in the advertising business, the fact remains that they purport to be statements
under oath and were clearly intended to mislead the advertisers into believing
that the individual who signed the affidavit had personally checked the
accuracy of the bill.
n3 The applicant has conceded the
fraudulent billing and has made restitution to advertisers in excess of
$6,000. Star Stations on Mar. 4, 1969
moved to reopen the record to show that, in addition to some $3,306.48 already
refunded by station WIFE to its overcharged advertisers, $2,794.95 has been
refunded since the close of the record for a total refund of $6,101.43. This request will be granted and our
decision will be based on the record as amended. Other relief sought by the motion is to show a change of status
of Dorothy Storz, an officer of the parent corporation, and Don W. Burden. This will be denied as being of no
decisional significance. Mrs. Storz at
no time held an ownership interest in the licensee; Mr. Burden continues to be
its 76-percent stockholder.
7. Although it cannot be satisfactorily
resolved on this record, it appears that Mr. Burden may not actually have been
aware of these deceptive billing practices.
Nonetheless, it is undisputed that false bills were issued and that the
ultimate responsibility for this practice lies with Burden. See Continuental Broadcasting, Inc., supra;
KWK Radio, Inc., 34 F.C.C. 1039 (1963), affirmed 119
Conclusion
8. This is a very difficult and close
case. n4 On the one hand we credit Burden
with lack of knowledge and recognize that not only has some restitution been
made, but that the licensee has voluntarily unearthed and made reimbursement in
regard to additional infractions. On
the [*994] other hand, however, we cannot forget that WIFE's derelictions
occurred during the period of a 1-year renewal when it should have been
exercising the greatest degree of care.
In light of the facts and circumstances here, we believe this is a case
which requires the imposition of certain conditions and sanctions, but that
denial of renewal is not required in the public interest since the evidence
below simply does not warrant disqualification as a licensee. That punishment would be unduly harsh. We stress, however, that WIFE's operation
has only minimally met the public interest standard. In view of this, we believe the best way to proceed here is to
grant a 6 months' renewal of these licenses.
This means that new applications must be filed within 90 days.
n4 We note that we have imposed
monetary forfeitures in similar situations where a licensee's principals
knowingly engaged in, or permitted fraudulent billing practices. WBZB Broadcasting Service, Inc., 10 F.C.C.
2d 321 (1967).
9. During this interim period, any deviation
from a high standard of performance will result in the initiation of
proceedings seeking termination of the station licenses. As soon as possible after the release date
of this order the licensee must effectuate a management system of internal
controls to prevent overbooking of spot announcements, to insure that billing
is done accurately from the station logs, and to provide that the licensee's
principals and employees are comprehensively, accurately and promptly apprised
of the full nature, conditions, rules, and all other matters relating to radio
contests aired and billing practices followed in the licensee's operations;
and, further, the licensee shall with its renewal application file a
comprehensive report disclosing the details of the said management system of
internal controls and the institution of that system.
10. In the appendix to this decision we have
ruled on the exceptions of the parties to the initial decision of the hearing
examiner. Except as modified by the
rulings or by our decision, the findings of the hearing examiner are adopted.
11. Accordingly, It is ordered, That the motion
of Star Stations of Indiana, Inc., to file a brief in excess of 50 pages Is
granted, and the brief Is accepted for filing; and
12. It is further ordered, That the motion of
Star Stations of Indiana, Inc., to reopen the record Is granted to the extent
set forth herein and in all other respects Is denied; and
13. It is further ordered, That the
above-captioned applications of Star Stations of Indiana, Inc., for renewal of
licenses of stations WIFE and WIFE-FM, Indianapolis, Ind., Are granted, the
licenses to be issued, however, for a period of only 6 months pursuant to the
conditions required by the decision.
FEDERAL
COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
CONCURRING
STATEMENT OF COMMISSIONER H. REX LEE
Neither
the evidence nor law of this case supports denial of WIFE's licenses. To decide otherwise engenders a rather novel
proposition that the Commission will deny the renewal of broadcast licenses
where employees of a licensee, without the licensee's knowledge or
authorization, engage in fraudulent billing practices, but will only impose
monetary forfeitures where the licensee knowingly permits or authorizes the
practice to exist. This unique precept
tends to produce judgments in which lesser offenses require greater penalties,
while the greater offense is less impugned.
If administrative fairness means anything, it must denounce such a legal
practice for the abuse it causes to equal protection and due process.
The
Commission has consistently ordered monetary forfeitures in every case of
fraudulent billing. WBZB Broadcasting,
10 F.C.C. 2d 321 (1967); Lawrence Broadcasting, Inc., 14 R.R. 2d 1 (1968);
Robert D. Rapp, et al., 13 R.R. 2d 32 (1968); Rocket Radio, Inc., 15 R.R. 2d
1151 (1969); and Perry Radio, Inc., 16 R.R. 2d 524 (1969). In all except the
Rapp case, fraudulent billing practices were engaged in by managers and
officers who were also the sole or partial owners of the broadcast licensees
involved. Consequently, there could be
no dispute about the licensee's knowledge.
For purposes of imposing a monetary forfeiture, the Rapp case
established that licensees are legally responsible for the conduct of
employee-managers who, though not holding any ownership interest, nevertheless
engage in fraudulent billing under circumstances where the exercise of due
diligence would have prevented the practice.
This is the nearest precedent to the instant case involving the licenses
of WIFE; and the legal conclusion there resulted in a forfeiture rather than
the denial of a license.
Even if
the Commission did not differentiate between the ownermanager who knowingly
engages in fraudulent billing and the licensee who fails to exercise due
diligence, in view of these precedents an arbitrary result would still be
produced by applying the harsh alternative sanction which requires denying a license
renewal. The disparity of [*1005]
consequences between a monetary forfeiture and the denial of a license
is so great that the severity of a denial, based on the inconclusive facts of
this case, results in a refutation of the principles of administrative
fairness. The entire area of
broadcasting commercial practices urgently requires investigation; and until
the Commission establishes a comprehensive policy in this field, it should
limit the application of its ultimate sanction to the most clear and grievous
situations.
The
merit of this view is even more pronounced where lack of due diligence becomes
the primary element of decisional relevance.
In that case, when employment or ownership of the culpable individual is
terminated, the Commission has settled on monetary forfeitures as a more
equitable sanction than license revocations, reasoning that the lesser penalty
is sufficient to assure "direct continuing supervision" of the
licensee's facilities. Quality
Broadcasting Corp., 13 F.C.C. 2d 642, 685-686 (1968).
The
Commission, nevertheless, did not impose a monetary forfeiture in this
case. The only reason seems to be that
a notice of apparent liability was not issued within the 1-year limitation
period prescribed by section 503(b)(2)(3) of the Communications Act. However, it appears difficult to assume this
is an appropriate bar. The Commission's
regulation covering fraudulent billing practices n1 came into effect on October 22,
1965, subsequent to the time the instant proceeding was commenced. However, on March 9, 1962, the Commission
issued a public notice warning licensees that such activity would be regarded
as contrary to public interest. n2 The 1962 statement was notice that
liability was possible and that rules could be adopted. The initiation of a hearing, within 1 year
from the date the fraudulent billing practices became known to the Commission
was, in itself, a sufficient receipt of written notice on which to base
compliance with the statute. The
Commission's regulation prohibiting deceptive billing became effective prior to
a conclusion of the hearing record in this proceeding; and that again was
notice of the applicability of its provisions -- that the licensee was as much
entitled to any benefits accruing from the regulation as it was subject to any
sanctions it might impose.
n1 47 C.F.R. 73.124.
n2 F.C.C. 62-272, 23 R.R. 175
(1962).
During
the oral argument in this proceeding, counsel for the licensee petitioned the
Commission for discretionary relief, requesting the imposition of a fine. Considering the state of evidence on the
record, the Commission should have accepted the petition as a salutary
indication of the licensee's interest in assuming a proper degree of
responsibility for misconduct of which it was unaware and apparently could not
prevent. Therefore, the petition for
discretionary relief seemed entirely appropriate and should have been
granted. Cf. KFNF Broadcasting Corp., 16 F.C.C. 2d 731 (1969). To say that
regulatory authority is limited to the alternatives of either denying or
renewing a license when the technicality of giving notice is not fully (though
it is practically) observed, merely elevates form over substance to the
disadvantage of sound administrative judgment.
The
Commission may perform any and all acts not inconsistent with the
Communications Act, as may be necessary in the execution [*1006]
of its functions. n3 "While such 'necessary and
appropriate' provisions do not have the same majesty and breadth in statutes as
in a constitution, there is no dearth of decisions making clear that they are
not restricted to procedural minutiae, and that they authorize an agency to use
means of regulation not spelled out in detail, provided the agency's action
conforms with the purpose and policies of Congress, and does not contravene any
terms of the act. * * * The source of
discretion is available not only where an agency has the explicit power to
impose penalties * * *." Niagara Mohawk Power Corp. v. FPC, 379 F.2d 153,
158-159 (D.C. Cir., 1967). See
generally
n3 47 U.S.C. 154(i).
Unfortunately,
the Commission has not reached this view of its authority. Perhaps in time it will come to see its
merit and importance. Nevertheless, the
omission of a monetary forfeiture does not properly dictate a different result
than the majority reached in this case.
II
The validity
and effect of Commission decisions in the fraudulent billing area is not
altered by the fact that this case, in addition, arises out of charges of fraud
in the conduct of certain contests.
With respect to these latter allegations, the Commission properly found
there was no deception practiced upon the public in the conduct of two giveaway
contests, and that the evidence was inconclusive concerning the licensee's
knowledge or lack of due diligence in preventing the conduct which resulted in
a fraud upon the advertiser sponsoring a water-filter contest.
THE
WATER-FILTER CONTEST
The
hearing record of the water-filter contest was marked by doubt. At best, the evidence and testimony probing
the knowledge and involvement of the licensee's majority stockholder, Don
Burden, was conflicting and unresolved.
Prior to the hearing, the station manager, Ronald Mercer, executed an
affidavit in which he admitted full responsibility for the manner in which the
contest was conducted. n4 At the hearing, however, he
repudiated his oath and testified that he had, in fact, reported the complete
absence of entries to Burden, who told him to "go get some winners." n5 Mercer said all his subsequent acts
were performed with Burden's knowledge and under his direction. Burden, on the other hand, denied any such
knowledge; and considerable testimony was offered to show that information
copies of correspondence were deliberately withheld from Burden, even though it
was routinely required that they be sent to him at the corporation's home
office in Omaha, Nebr. Burden insisted he was surprised when he finally learned
of Mercer's activity.
n4 Broadcast Bureau exhibit 19A,
enclosure 3A.
n5 Tr. 966 et seq.
In this
contradictory state of evidence, the most important fact appears to be that the
conduct of the contest violated WIFE policies
[*1007] prohibiting free
advertising and the award of prizes to station employees and their families. The question, of course, arises -- if one
assumes the conduct of the contest was an unauthorized act committed by Mercer
-- whether there was adequate supervision by the licensee, without which lack
of actual knowledge is unavailing as a defense. The examiner did not resolve this question other than to find
Mercer and Burden "were in pari delicto insofar as misconduct at WIFE is
concerned." n6
This conclusion was simply insufficient as probative evidence either of the
licensee's knowledge or of its lack of due diligence.
n6 "Initial Decision,"
F.C.C. 67D-73, Dec. 19, 1967, finding 57.
THE
FRAUDULENT BILLING CHARGE
Without
recounting the details surrounding the fraudulent billing practices conducted
by employees in the WIFE station, it is readily observed from the record and
the hearing examiner's decision that there was an almost complete failure of
proof to establish the licensee's liability.
The testimony describing the circumstances in which the conduct occurred
was not sufficient to find renewal of the applicant's licenses would not be in
the public interest. A preponderance of
the evidence established that the false billing practices were instigated at
the station manager's instructions. n7 The employee of the licensee's
parent company, principally responsible for supervising WIFE's administrative
operations, admitted being aware of WIFE's improper billing practices, but
feared her position might be jeopardized by reporting them. n8 During one period when the
n7 Ibid, finding 27.
n8 Ibid, finding 56.
n9 Ibid, findings 50-52.
Whether
the licensee exercised due diligence to prevent the existence of this deceptive
conduct is equally incapable of being resolved on the record. Much has been made of the fact that
employees of WIFE ordered the abandonment of a "master control book,"
used by the predecessor licensee, which purportedly foreclosed the possibility
of fraudulent billing practices. It is
difficult to see how any system of bookkeeping, whatever internal control it
provides, can serve to check an intention to issue false invoices. The hearing record adequately disclosed [*1008]
that WIFE's journal system supplied detailed information about
commercial overbooking. Nevertheless,
the fact that a station may overbook advertising does not, in itself, warrant
finding a licensee authorized or ratified false billing. The relevant issue still remains whether the
licensee knew or could have known about the misconduct. This is the type of question which cannot be
satisfactorily resolved by saying it is somewhat difficult to see how the
principal stockholder could have been unaware.
Even though the burden of proof was on the licensee, in a hearing where
the denial of a license is in issue, the licensee should not be denied the
benefit of doubts which the hearing failed to resolve. The hearing examiner simply assumed a lack
of due diligence from the established fact of false billing. n10 He deemed irrelevant the question whether WIFE's
accounting procedures might be accurate in view of the station's sales and
promotion policies. n11 Unfortunately, without an inquiry
into the character and quality of those procedures, and their design to prevent
fraudulent billing, there was no standard against which to judge the licensee's
diligence.
n10 Ibid, finding 57.
n11 Ibid, finding 22.
The Commission's
decision does not, in this regard, change the burden of a licensee's
responsibility to prove its license renewal will serve the public
interest. It merely reflects the
generally accepted view that "[the] Commission and the examiners have an affirmative
duty to assist in the development of a meaningful record which can serve as the
basis for the evaluation of the licensee's performance of his duty to serve the
public interest." United
If the
commission were to turn away from this responsibility, the burden of proof
standard could then come to represent a denial of due process. Existing administrative practice places a
broadcast licensee in a position where, in a sense, he is both prosecutor and
defendant. If the admission of
uncontroverted misconduct cuts off the possibility of defenses, the burden of
proof with respect to service in the public interest can never be met under any
circumstances. If that means a man must
admit his own guilt, and then for the sake of showing fairness be required to
go through the motions of fashioning a defense against the admission, the whole
hearing process merely becomes an idle gesture in futility -- proceeding from guilt
to a presumption against innocence.
With all the cards stacked against success, are we then to say he is not
entitled to any doubts which remain? If
this is the system we intend to pursue, we might as well admit due process has
been supplanted by a form of administrative tyranny in which no defense is ever
possible.
The
decision in this case is entirely consistent with the United Church of Christ
standard. In that decision, even though
a short-term renewal was previously granted, the court refused to find the
licensee disqualified, and ordered filings for the issuance of a new license in
which the existing licensee was permitted to participate. The Commission's order in the instant case
has the same effect in the context of a license renewal proceeding.
[*1009]
In determining the proper action to take as a result of WIFE's
dereliction, it was impossible to discount the fact that misconduct occurred
under circumstances which, at least, raised doubt about the licensee's
supervision to avoid misconduct by station personnel. The inferences drawn from the record are not entirely overcome by
the examiner's failure to fully explore the due diligence issue. Moreover, it cannot be determined whether
the licensee's failure to come forward with evidence fully controverting the
reasonable presumptions against due diligence was effectively caused by the
examiner's denying any relevance to the subject of accounting and management
systems.
While
WIFE's billing practices and its conduct of the water-filter contest cannot be
condoned, the most compelling fact is that there was a failure of substantial
proof to result in findings upon which a sound conclusion would reasonably
justify denial of a license. There is
no doubt that considerable weight must be given to the fact that WIFE was
previously denied more than a 1-year renewal because of "hypoing"
audience ratings to the detriment of advertisers. But unless we are to disregard proof of knowledge and the lack of
due diligence as essential elements of liability, once the licensee succeeded
in overcoming the presumption of its impropriety in the conduct of the giveaway
contests, there seems no reasonable ground for distinguishing this case from
the usual fraudulent billing situation in which monetary forfeitures are
ordered.
If the
Commission had a general policy prohibiting one short-term renewal to succeed
another, I would have been inclined toward a contrary result on that basis
alone. That consideration would have
placed on the licensee the entire onus of unresolved doubt about its due
diligence with respect to the false billing charges. My belief is that, unless very substantial mitigating
circumstances would make such a policy result arbitrary or unreasonable, it should
govern all future cases of this type.
III
There is
sufficient legal basis for the majority opinion founded solely on the
fraudulent billing precedents to which previous reference has been made. However, the majority relies on prior
Commission decisions which are almost totally irrelevant to the instant
case. Those opinions confirm the
general view that licensees are ultimately responsible for the dereliction of
employees. Unfortunately, their use,
based on the result in this case, creates the impression that renewal and
revocation proceedings will not longer be regarded as an appropriate recourse
in the fraudulent billing situation. If
the cited cases were needed to support the result, the majority, at least,
should have announced that they do not imply a narrowing of the sanctions which
may govern the area of fraudulent billing practices. Accordingly, some clarification seems justified to dispel any
inference that this decision may be construed to restrict the ambit of
Commission authority.
With the
exception of the KWK Radio, Inc., 34 F.C.C. 1039 (1963) case, all the
referenced precedents expressly hold that misrepresentation and lack of candor
in dealing with the Commission is an independent ground for revoking a license
or denying its renewal. The [*1010]
preservation of this standard is an essential condition prerequisite to
the maintenance of an effective regulatory process. Any conduct in derogation of its integrity places in issue the
character of a licensee's qualifications to remain the recipient of valuable
public benefits.
These
precedents form a pattern of requiring disqualification where there is
misrepresentation and lack of candor, among other things, in a licensee's
failure to prevent course, vulgar, suggestive, and indecent programming (
Palmetto Broadcasting Co., 33 F.C.C. 250 (1962)); in practicing deception upon
the Commission by altering program logs and misrepresenting program proposals (
Eleven Ten Broadcasting Corp., 32 F.C.C. 706 ( 1962), aff'd sub nom. Immaculate Conception Church of Los Angeles
v. FCC, 320 F.2d 795 (1963)); in maliciously rigging contests to deceive the
general public, and to produce results based on racial selection ( KWK Radio,
Inc., supra); and in falsifying time brokerage contract documents to deceive
the Commission ( Continental Broadcasting, Inc., 15 F.C.C. 2d 120 (1969)). In
the opinion of the Supreme Court of the
These
precedents emphasize the dangers inherent to public interest in attempts to
conceal, misrepresent, and falsify information on which that interest
necessarily depends. A notable aspect
of the WIFE case was the licensee's complete candor and veracity in disclosing
to the Commission detailed facts about the conduct which occurred at its
n12 Star Stations' motion to
reopen record, filed Mar. 4, 1969.
In these
circumstances, it would not be fair to suggest the licensee was less than
forthright in dealing with the Commission.
I am not willing to say this show of candor entirely overbalances a
licensee's obligation to maintain an especially high standard of performance,
particularly during the period of a short-term renewal. But to the extent it may weigh on this
decision, WIFE must be credited with having properly [*1011] fulfilled an
important public obligation. This is
not to imply that there could never be a sufficiently aggravated case of
fraudulent billing calling in question a licensee's character qualifications,
or that future cases of a similar character will be decided the same way when
one short-term renewal is made to succeed another. But this is not such a case.
The hearing examiner left substantial doubts unresolved on the record of
the proceeding; and the licensee is entitled to the benefit of that doubt. Accordingly, I concur in the Commission's
decision.
DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON, IN
WHICH COMMISSIONER KENNETH A. COX JOINS
The
result reached here is truly shocking.
In an astonishing opinion, the majority has concluded that, although the
licensee of WIFE (AM) in Indianapolis, Ind., fraudulently deceived its clients
with respect to certain promotional contests and bilked its advertisers of more
than $6,000 in advertising revenues (all during a 1-year probationary license
renewal period), the licensee's operation has nevertheless "minimally met
the public interest standard" (majority opinion, par. 8) and its license
should be renewed.
If fraud
and deception of more than $6,000 are minimally in accordance with the public
interest, then I think it must be apparent to all that the FCC's attempts at
serving the public interest are themselves without even minimal standards.
The
facts here which are largely undisputed are summarized in the majority
opinion. Briefly, on October 28, 1964,
this Commission found that the licensee of WIFE and WIFE-FM had
"hypoed" its ratings by using an audience rating report made during a
period when the station was conducting an intensive give-away contest. The Commission found that the licensee's
conduct fell "considerably short of the degree of responsibility in the
operation of a broadcast station which the Commission has the right to expect
of a licensee." Star Stations of Indiana, Inc., 3 P. & F. Radio Reg.
2d 745, 748 (1964) (Commissioners Hyde and Robert Lee joining the
majority). Nevertheless, we decided to
grant the licensee a probationary 1-year license renewal, from August 1, 1964,
to August 1, 1965, "affording the Commission," as we said then,
"an early opportunity to re-examine your operations and determine [*997]
the degree of responsibility which you have exhibited during the
year." Ibid.
On May
17, 1965, applications for renewal of the licenses of WIFE and WLFE-FM were
filed. On September 14, 1965, the
Commission received its first indication that WIFE had fraudulently falsified
its bills to advertisers in a letter of c complaint from the Central Indiana
Better Business Bureau. (tr. 392, et seq.)
The license renewal applications were accordingly designated for hearing on
April 28, 1966 ("Order," F.C.C. 66-395 [corrected], released May 4,
1966). On December 19, 1967, Hearing
Examiner Thomas H. Donahue released his "Initial Decision" (F.C.C.
67D-73), concluding that the licensee of WKFE had misled and defrauded
advertisers and the public, and recommending against renewal of both WIFE (AM)
and WIFE-FM.
Today
the Commission finally reaches that long-awaited re-examination of the
licensee's qualifications which it promised in 1964. Despite blatant and admitted fraudulent misconduct by the
licensee, despite the licensee's probationary 1-year-renewal status, and
despite the findings and recommendations of the hearing examiner to deny
renewal of the WIFE-AM-FM licenses, the licensee is again let off merely with a
warning -- which I am forced to assume means as little now as it apparently did
in 1964.
The
majority does not attempt to dispute the licensee's misconduct in any
respect. With respect to the Eaton
water filter contest, the majority agrees with the examiner that WIFE's actions
were fraudulent -- that the licensee falsely told the sponsor of a contest that
there had been winners when there were none, and then collected the prizes and
gave them to station employees. Quite
properly, the majority holds the licensee of WIFE-AM-FM "fully responsible
for the conduct of its officers" (majority opinion, par. 4), even though
the fraud may have been initially perpetrated by officers below the ownership
level.
More
importantly, the majority also finds that the licensee, on numerous occasions,
furnished to clients "false and misleading information with respect to the
times and dates purchased advertising was broadcast." Spot announcements,
for example, were deliberately broadcast at times outside the time called for
by the contracts (and upon occasion were not run at all) -- apparently when
time was not available within were not run at all) -- apparently In preparing
the bills for the spot announcements, WIFE utilized a variety of means in order
to keep advertisers from being alerted as to what was transpiring. One such method was the preparation of
signed and executed affidavits which effectively served to lull unsuspecting
advertisers into the mistaken belief that the commercials set forth were
actually broadcast according to the official station log. In actual fact, the bills were not prepared
from the logs at all.
The
record also reveals that the customer was either billed off the orders, i.e.,
on the basis of what he had ordered rather than on the basis of what the
station log disclosed that he had received, or from an intermediate
"recap" sheet on which entries abstracted from the logs were forced
into the proper time segments. The net
result was that a minimum of $6,101.43 was paid by advertisers for spot
announcements which either had not been carried or which were run in time
segments for which a lesser charge should have been assessed.
[*998]
What is more, the licensee took no steps to ensure that blatant fraud
such as this court not happen. Indeed,
it deliberately abandoned a control book used by an earlier manager to prevent
just such fraud -- again as the majority acknowledges. Confronted by all this, the majority
concludes: "It is undisputed that false bills were issued and that the
ultimate responsibility for this practice lies with Burden," the station's
principal owner.
Presented
with clear, acknowledged, and repeated fraud by the licensee, during a
probationary period which would normally call for higher than average performance,
what does the majority conclude? Its
conclusion, a cosmic nonsequitur, can only be described as a pathetic
equivocation (majority opinion, par. 8):
"This
is a very difficult and close case." [Emphasis added.] How many other
Federal regulatory agencies, when shown clear and repeated cases of fraud,
could still describe them as posing "a very difficult and close
case"?
Despite
this closeness, however, and without much apparent strain, the majority finds
itself able quickly to conclude (a mere three sentences later) that WIFE has,
after all, "minimally met the public interest standard," and that
"denial of renewal is not required in the public interest. * * *" (Majority opinion, par. 8; emphasis
added.)
What
public interest? If more than $6,000
worth of fraud is minimally consistent with the public interest, is there
anything a licensee could do that would not meet this minimal public interest?
Their
conclusion reached, the majority then falls comfortably back into the tried
rhetoric of how the Commission (of course) will henceforth hold the licensee to
very high standards of performance. Yet
is it not perfectly clear from this decision that the Commission majority
appears willing to whitewash almost any sort of licensee misconduct -- including
substantial involvement in dishonest practices?
Is it
not ironic, for example, that the Commission majority is willing to admonish a
television station for purportedly inducing criminal conduct (such as the
smoking of marijuana, see Columbia Broadcasting System (WBBM-TV), 18 F.C.C. 2d
124, 142 (1969), yet excuse a licensee when that licensee itself commits what
may very well be a crime? And is it not
equally ironic that on the same day that the Commission finds repeated fraud by
WIFE to be minimally in the public interest and renews the licenses of
WIFE-AM-FM without imposing even a monetary fine, it levies numerous fines on
other stations for far less culpable behavior -- $700 on WKVA in Lewistown, Pa.
(failure to make field intensity measurements and excessive modulation), $500
on WSNO in Barre, Bt. (operating above power), $2,000 on KFLN in Baker, Mont.
(logging violations, excessive power, and post-sunset operation), $500 on KWMC
in Del Rio, Tex., (unauthorized operator, logging violations), and $7,500 on
WVOZ in Caroline, Puerto Rico (overmodulation, excessive power after sunset,
and false logging)? Is there any doubt
that this Commission too often reserves punitive action for smaller licensees? Is there any lingering doubt that the
majority's marked disinclination to enforce its rules and policies by
revocation of valuable broadcast properties simply enshrines the precept that
the wealthier and more influential any broadcaster becomes, [*999]
the more immune he is to regulation? n1 Can there be any doubt left that there is something
very wrong with the will of this agency to discharge its responsibilities to
the public?
n1 I cannot agree with the
assertion that revocation of WIFE's license would "produce judgments in
which lesser offenses require greater penalties, while the greater offense is
less impugned." (Concurring opinion, pt. I.) In actual fact, the majority
has adopted an opinion in which "the greater offense" [i.e., fraud]
receives no penalty at all. The cases
cited for the proposition that the Commission has "consistently ordered
monetary forfeitures" and not license revocation "in every case of
fraudulent billing" are inapposite.
The offenses in those cases did not occur during a probationary 1-year
license renewal period, were generally far fewer in number than here, and
involved far less money than WIFE's repeated fraud.
Nor can
I agree with the statement that "[the] disparity of consequences between a
monetary forfeiture and the denial of a license is so great that the severity
of a denial, based on the inconclusive facts of this case, results in a
refutation of the principles of administrative fairness." (Concurring
opinion, pt. I.) I fear that this position may have serious consequences for
this Commission's attempts to regulate the broadcasting industry. If followed, it might rapidly become an
apologia for deference to wealth, placing the larger and wealthier broadcasters
beyond the reach of the Commission's regulations. If a majority of this Commission finds itself unable to grasp the
nettle of license revocation -- for the wealthier broadcaster as well as the
smaller and less experienced -- than I am afraid the Commission will lose its
credibility as an even-handed regulatory agency in the eyes of the American
public.
One can
read and re-read the majority's opinion, and find scant recital of any
mitigating factors which might excuse the licensee for the fraud committed by
WIFE. The only justification even
attempted by the majority (and off-handly at that) is the conclusory assertion
that:
[We]
credit Burden [the licensee's controlling stockholder] with lack of knowledge
and recognized that not only has some restitution been made, but that the
licensee has voluntarily unearthed and made reimbursement in regard to additional
infractions. (Majority opinion, par. 8)
Utterly
fantastic. If the latter part of this
assertion is truly taken sexiously, one can only assume the majority will tend
to excuse fraud so long as the licensee makes restitution when caught, and
cooperates with the Commission in discovering additional wrong doing in which
it has been involved and apprehended. n2
n2 The majority's position was
squarely rejected in Lawrence Broadcasters, Inc., 14 P. & F. Radio Reg. 2d
1, 2 (1968); "The corrective action taken by the licensee after being
advised of the violations in no way excuses them or justifies reduction of the
forfeiture."
As for
the assertion that Burden lacked knowledge of the fraud, an assertion which the
concurring opinion apparently accepts, the contention is almost certainly
incorrect -- and in many ways immaterial to this proceeding. Although there is some conflicting evidence
in the record as to whether Bruden was actually aware of, and was affirmatively
responsible for, the deceptive billing practices carried out by his manager,
Ronald Mercer, it is difficult to see how Burden could have been unaware of the
false billings (if not directly responsible for them) in view of his close
supervision of all station operations.
A
reading of the record demonstrates how preposterous this lack-of-knowledge
claim is. The licensee of WIFE and
WIFE-FM is Star Stations of Indiana, Inc., which is wholly owned by Star
Stations, Inc. Star Stations, Inc., also wholly owns the licensees of KISN,
Vancouver, Wash., and KOIL and KICN-FM (now KOIL-FM), Omaha, Nebr. The stock of the holding company, Star
Stations, Inc., is owned 76.36 percent by Don W. Burden, 16.34 percent by J. P.
Wilkerson, and the remainder (7.29 percent) by four other persons. Thus, it is clear that Don Burden was the
controlling figure in the enterprise from the standpoint of ownership interest.
[*1000]
The record further indicates, for example, that Burden directed the
staff to put spots on at times other than those for which they were ordered,
without also telling them to notify the advertisers that this was being
done. It also contains substantial and
direct evidence that he must have known of the false billings, even if we
disregard the testimony of the general manager, Mercer, who claimed at hearing
that Burden knew of the irregularities.
Thus, Louis T. Rudol, who was Burden's secretary from September 1960
until April 1966, testified that she heard Burden instruct the station manager
of WIFE to "spread out" trade account spot announcements when the
station was oversold (tr. 1305-1326), and she also made clear on cross
examination that Burden said to spread the announcements around and not merely
to sell the business on a spread-out basis.
(tr. 1346-1352.) Another witness, Patricia Van Cleave, testified that
she told Burden she could not get the spot announcements into the times for
which they were ordered and that his response was to "move them out but
just as close to what they wanted to buy." When she told him there were
too many, he told her to "Do as I say." (tr. 326-327.) Apparently at
no time was the instruction or suggestion made that the advertiser was to be
told or asked whether he still wanted the announcements.
The
testimony of another witness, A. E. Donegan, indicated that Burden's alleged
misconduct was not confined to WIFE, but may well have encompassed the billing
practices of other stations controlled by him as well. Thus, Donegan testified (tr. 839) that
Burden had given instructions with respect to station KOIL in Omaha, Nebr., to
put on daytime announcements at night, even though the advertisers were paying
daytime rates.
Although
the record does not contain undisputed evidence that Burden had knowledge of
the actual billing practices, it is difficult to conclude, in light of his
apparent knowledge that spots were being moved from contracted period coupled
with other evidence of record, that he was unaware of the fraud perpetrated on
WIFE's advertisers. All other WIFE
officers concerned with sales and billing (Storz, Mercer, Shireman) testified
that they had knowledge of the practice.
All of the personnel at the station also had knowledge of the practice
and acted to implement it. The record
additionally evidences that Burden was in constant close touch with all station
affairs.
In any
event, such considerations are of lesser importance in light of established
Commission policy that the licensee must be held responsible for the actions of
its employees -- absent clear and convincing exculpatory evidence to the contrary. In this case, Burden's responsibility is
clear. The misconduct was engaged in by
Mercer, a vice president of the licensee, and Mrs. Storz, an officer of the
parent corporation, not merely by employees down the scale of
responsibility. Furthermore, there has
been no significant showing that a reasonable effort was made to maintain even
basic bookkeeping, much less adequate procedures, in order to avoid misconduct
by station personnel. In fact, when the
licensee acquired the station, there was in existence a "master control
book" (finding 25) which, properly used, made it impossible to sell more
spots than there was available time.
The book was abandoned and
[*1001] no effective control
substituted by Burden. The examiner's
conclusions, therefore, should come as no surprise: n3
n3 In light of this accumulation
of evidence, the concurring opinion's contention that "the evidence was
inconclusive concerning the licensee's knowledge or lack of due diligence in
preventing the conduct" is unsupportable.
There is ample evidence to indicate Burden's direct involvement with
WIFE's fraudulent billing practices, and Burden's failure to adopt any
procedural safeguards -- indeed, his abandonment of the prior licensee's
control procedures -- appears to establish a prima facie case of lack of
diligence.
Further,
this position, if pushed to its logical conclusion, would place the burden of
proving actual knowledge on the Commission -- a burden which would grow in
difficulty as the complexity of the licensee's managerial organization
increased. Responsibility is already
substantially diffused throughout the corporate hierarchies of many large
licensees. And when this Commission is
alerted to charges of "payola," or news "staging." or
fraudulent billing, its investigations often run into a blank wall. Thus, we may be told that the chairman of
the board was out of the country at the time, the president of the corporation
wasn't told of these things, none of the numerous vice presidents were in
charge of that particular problem, the general manager had issued instructions
that the given offense was never to occur, his assistant didn't see it happen,
and lower ranked employees were fired last week (for "unrelated
reasons," of course) -- but in any case, "it will never happen
again." The problem is finding out "who's in charge here?"
I have
often noticed that licensee responsibility has a tendency to vanish under
Commission scrutiny. It is essential,
therefore, that this Commission not set the stage for a "disappearing
act" by licensee responsibility.
We must not make the concept of responsibility, so important to a lawful
and orderly society, a figment or fiction.
We must hold licensees responsible for at least promulgating control
procedures to prevent fraud and other kinds of misconduct. The 1-year license renewal is designed to
give the licensee fair warning that such procedures must be rapidly
implemented. As WIFE failed to adopt
such procedures. I do not understand
how one can contend that "[whether] the licensee exercised due diligence
to prevent the existence of this deceptive conduct is * * * incapable of being
resolved on the record." (Concurring opinion, pt. II.)
[While]
various people were permitted to play with the ends, the reins of authority [at
WIFE] were at all times firmly in the hands of Don Burden and manipulated by
him with varying degrees of firmness, depending on his mood of the moment and
the exigencies presented by the obstacle at hand * * *. (Finding 55.)
The
record makes abundantly clear that Don Burden and Ronald Mercer were in pari
delicto insofar as misconduct at WIFE is concerned * * *. (Finding 57.)
The
burden of showing diligent supervision of WIFE's operations clearly lay with
Burden, for where an issue involving serious misconduct is involved, the
Commissions Act requires that the applicant carry the burden of proof on this
issue. The necessity for this showing
is heightened where, as here, the station is on a 1-year short-term
renewal. Office of Communication of the
United
Manifestly,
the licensee must be held responsible for the fraudulent billing practices
established on this record. This
principle has been clearly enunciated by us over and over again. See KWK Radio, Inc., 34 F.C.C. 1039 (1963),
aff'd, 119 U.S. App. D.C. 14, 337 F. 2d 540 (1964), cert. denied, 380 U.S. 910
(1965); Eleven Ten Broadcasting Corp., 32 F.C.C. 706 (1962), reconsideration
denied, 33 F.C.C. 92 (1962), aff'd sub nom, Immaculate Conception Church of Los
Angeles v. F.C.C., 116 U.S. App. D.C. 73, 320 F.2d 795 (1963), cert. denied,
375 U.S. 904 (1963); Palmetto Broadcasting Company, 33 F.C.C. 250 (1962), pet.
for reconsideration denied, 34 F.C.C. 101 (1963); and, most recently, our
decision in Continental Broadcasting, Inc., 15 F.C.C. 2d 120, reconsideration
denied, 17 F.C.C. 2d 485 (1969). As we stated there:
[The]
Commission must insist upon the effective exercise by the licensee of actual
control over station operation and management, and it is only by holding the
licensee accountable for the operation and management of the station that there
can be any assurance that the operation and management will be responsible. [*1002]
The degree of responsibility imposed and the standard of conduct
required are the same for all licensees, irrespective of their form or the
relative size of their operations. [See
Prattville Broadcasting Company, 4 F.C.C. 2d 555 (1966), citing KWK Radio,
Inc., supra, and Eleven Ten Broadcasting Corp., supra.] A multiple station
owner, or an absentee owner [such as Burden], is subject to the same degree of
responsibility for adequate supervision and control over station operation as a
local station owner who is integrated in ownership and management. To hold otherwise would result in giving an
added benefit to absentee ownership as compared to local ownership.
In
addition, the majority erroneously shifts the burden of proof by suggesting
that the licensee's lack of diligence should be proved by the Commission and
not the contrary -- namely, that the licensee has the burden of proving its
diligence in light of its repeated fraudulent conduct and the significant fact
that its station was already on a short-term probationary license.
In
Office of Communication of the United Church of Christ v. F.C.C., supra, for
example, the court vacated the Commission's action granting a license renewal
application because, in large measure, of what it termed an "erroneous
concept of the burden of proof" by the Commission. The court stressed that a probationary grant
(as was given to WIFE and WIFE-FM) stems from the Commission's inability to
make the requisite finding that a license renewal will serve the public
interest, and that the burden of proof -- both of producing evidence and of
persuasion -- in the next renewal proceeding lies heavily with the
licensee. As the court said, a 1-year
probationary grant is "a grant which by its nature assumes that the
renewal licensee has been unable to persuade the Commission that it is
presently in the public interest to grant a 3-year renewal." As the
licensee presented no convincing evidence that it was unaware of the fraudulent
conduct involved, the issues must be resolved against it. n4 One can only wonder why the majority seems so
willing to evade this conclusion and violate the clear mandate of the U.S Court
of Appeals for the District of Columbia Circuit. One might surmise the majority feels safe in doing so because
there is no losing party in this proceeding that could appeal the question to
the courts -- as there was in the United Church of Christ case -- and thus
obtain another embarrassing reversal.
n4 The concurring opinion argues
that "even though the burden of proof was on the licensee, in a hearing
where the denial of a license is in issue, the licensee should not be denied
the benefit of the doubts which the hearing failed to resolve." As the
United Church of Christ case, supra, unequivocally indicates, however, the
burden of going forward with the evidence may be on the Commission, but the
burden of proof lies with the licensee.
Where a licensee is on a 1-year probationary renewal, and the issues
raised involve facts peculiarly within the knowledge of the licensee (e.g.,
whether the licensee's major stockholder had knowledge of, or actively
directed, the fraudulent billing; whether there was adequate superivision of
the licensee's staff to prevent illegal practices; etc.), the licensee must either
sustain the burden of proof or lose his case.
The licensee cannot, for example, refuse to submit evidence to establish
that his supervisory practices were adequate, and then argue that the
Commission has failed to prove its case.
The United Church of Christ case specifically holds that the burden of
proof is on the licensee. WIFE cannot
"benefit" from any "doubt" which is casued by its own
failure to present evidence sufficient to overcome that doubt.
The
majority today gives the licensee yet another chance to demonstrate that it can
operate its station in the public interest, and repeats the same warning given
it with the last 1-year renewal. How
many chances must we give licensees for fraud or other misconduct? Has not the time come simply to say that
when licensees, on repeated occasions, "hypo" ratings, conduct
fraudulent contests, and defraud
[*1003] advertisers out of
thousands of dollars, they have lost their right to function as a
"trustee" for public property?
One
final point warrants special emphasis.
The disposition of this case may determine for years to come the
usefulness of the short-term renewal.
The power to grant short-term renewals in doubtful situations can be
extremely useful in obtaining operation in the public interest where a
licensee's operation, while not entirely satisfactory, does not warrant
absolute disqualification. However, if
this is to be a meaningful compliance procedure, the licensee on a short-term
renewal must be expected to improve his operation and to be diligent in
maintaining proper standards. In this
case, whatever the conclusion as to the majority stockholder's actual
participation in the wrongdoing, it is absolutely clear that he made no
reasonable effort to maintain proper supervision and standards of good practice
in the station. In theory, a short-term
probationary license renewal ought to have a sobering impact on any licensee's
conduct; in fact, it seem here to have had no impact whatsoever. Indeed, the licensee's performance appears
to have degenerated substantially during its 1-year probationary period. If a further license renewal is granted in
such situations, the industry cannot be expected to consider short-term license
renewals as a serious warning that operations must improve. The short-term renewal will become nothing
more than a patently transparent whitewash, a subterfuge to cover up
unwillingness to hold erring licensees to meaningful standards. This case, therefore, is bound to affect the
Commission's future ability to use the short-term renewal as an effective
compliance tool.
If this
Commission refuses to adopt programming standards, continues to grant
engineering violation waivers, and persists in ignoring undue concentrations of
media control, then the very least it can do is hold its licensees to accepted
standards of business behavior. This
agency should at least protect other businessmen who must deal with
broadcasters on a commercial basis. It
is highly significant to note that the Commission first learned of WIFE's
fraudulent billing practices, not from a member of the listening public, but
from the Central Indiana Better Business Bureau (tr. 392, et. seq.),
representing businessmen in the Indianapolis area. Apparently a competitor of WIFE monitored the station's
broadcasts (which is apparently more than WIFE's owner did) and then informed
Amalie Oil, a WIFE advertiser, that its spots were not being carried at times
specified in the contract and the affidavit-accompanied bills. I imagine the Central Indiana Better
Business Bureau will not react with pleasure to today's majority decision. I would have thought that the broadcasting
industry and the business community in general would want the FCC to supervise
stations closely in this regard. the
reputations of all stations suffer when the advertisers upon whom those
stations depend for support are bilked, cheated, and defrauded through a
station's illegal practices.
WIFE's
admittedly fraudulent and indefensible billing practices, its conduct of the
Eaton water-filter contest, its failure to show adequate supervisory control
and licensee responsibility and, of great importance, the fact that the
derelictions and lack of control occurred
[*1004] during the period of a
1-year probationary grant -- all are clear evidence that its licensee should
not be permitted to continue as trustee for the public in its control of a
valuable broadcast frequency. Why must
this Commission, and the American public, brook the sort of corruption which
has been clearly acknowledged in this case? Can the licensee's economic
interests here be of such overriding importance that this Commission, on
equitable grounds, must deem its further operation to be minimally in the
public's interest? WIFE was given a
second chance. It is not entitled to a
third.
In
condoning fraud in the operations of WIFE, the majority has itself deprived the
public of the protection to which it is entitled.
I
believe that the public is entitled to far more from the broadcasting
profession and this Commission.
I
dissent.
APPENDIX
RULINGS
ON THE EXCEPTIONS OF STAR STATIONS OF INDIANA, INC.
Exception
No. Ruling
1, 2, 4,
5,8 Denied. The examiner is not required to make findings
on every conceivable fact
which might be deduced
from the evidence, absent a
showing of materiality
or decisional significance in
the exception, or a readily
identifiable reference to the
brief.
3, 6, 22 Denied.
The Commission's disposition of this case being
bottomed on failure to
exercise licensee control and
supervision, it is not
material whether Don Burden
himself or the licensee
generally had actual knowledge;
the adverse import lies in the
failure of actual
knowledge and control.
7 Denied. The documents sought were not statements of
the witness-to-be-impeached;
they were notes of in-
vestigators to whom he
talked. No attempt was made
to subpoena the investigators
to give countervailing
testimony.
9, 10,
11,
35, 37,
38,
39, 40. Denied.
Moot in view of the Commission's disposition of this matter.
12, 13 Denied. The examiner's finding fairly reflects the
evidence.
14 Denied. Exceptor fails to specify the contrariness to
the record with
particularity. Further, assuming
arguendo that all of the
requested findings are correct,
it does not negate the rendition of
false bills
"according to the
official stating log."
15 Denied. The requested finding did not apply to the
period under scrutiny.
16 Denied. The sentence is of no decisional significance
17, 20,
24 Denied. Exceptions must run to facts -- not implications.
18 Denied. If the excepted to words be accurate, they do
no harm; if inaccurate, the
exception must be to the
findings and conclusions which
they inaccurately
characterize.
19 Granted to the extent that the
first sentence of finding
23 is amended to read
"in April 1965 when he was
station manager of KOIL * *
*";
Denied in all other respects,
as the examiner saw
and heard the witnesses.
21 Denied for failure to indicate
with particularity the
incompleteness or
contrariness to the record. The
sought-for finding has no
materiality or relevancy
to the false bills proved and
conceded.
23 Denied. Finding 26 in no way indicates anything about
incorrect billing.
25 Denied for failure to specify
error with particularity.
26 Denied. The evidence in question was offered only
(exceptor's brief, pp. 54 et
seq.) in support of possible
rulemaking which would have no
relevancy to this
proceeding.
27 Denied, in view of the
Commission's disposition of this
case on the grounds that the
licensee failed to exercise control,
the chronology of discovery,
restitution,
etc., being immaterial.
28 Denied. The Commission agrees with the examiner. As
to the requested findings, no
showing of materiality
was made by the exceptor.
29 Granted. The words in finding 57 "hardly
scratches
these practices" are
deleted.
30 Denied as to finding 55 in that
exceptions must run
to facts, not implications.
Denied as to finding 57 in
that nothing in such finding
"indicates * * * that
Don Burden knew of, condoned or ratified the practices."
Denied as to the requested
findings in view of the
Commission's disposition of
this case on the grounds
that the licensee failed to
exercise control.
31 Denied. The examiner's finding fairly reflects the
evidence.
32 Denied for lack of
particularity. The exceptor cannot
cast upon the Commission the
burden of selecting
"the extent [to which]
it finds or concludes."
33 Denied. The brief contains nothing relating to this
exception.
34 Denied. Conclusion 1 contains none of the statements
excepted to.
36 Denied except as to the word
"innumerable" because
the Commission agrees with
the examiner;
Granted, to the extent of
substituting "numerous" for
"innumerable."
RULINGS
ON THE EXCEPTIONS OF THE CHIEF, BROADCAST BUREAU
Exception
No. Ruling
1 Denied in view of the
Commission's action in this matter.