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Friday, June 2, 2000

Hearst ordered to
explain Justice threats

Associated Press


SAN FRANCISCO -- A federal judge presiding over a newspaper antitrust case has ordered the Hearst Corp. to explain statements they say the Justice Department used to pressure the company not to close the Examiner.

Hearst lawyer Gerald Connell testified during closing arguments Wednesday that Justice Department officials told him, "If you are going to close down the Examiner, we are going to sue you."

U.S. District Judge Vaughn Walker today ordered Hearst to submit by June 7 "one or more declarations by Hearst employees or representatives" about the details of the statement.

Calls placed to the Justice Department requesting comment were not immediately returned.

Walker's order was prompted by Connell's testimony about how Hearst hoped to avoid Justice Department opposition to purchase of the Chronicle by giving away the Examiner, along with a $66 million subsidy, to local publisher Ted Fang. Hearst officials hoped the giveaway would clear the way for it to buy the larger morning Chronicle for $660 million.

The Justice Department has said it supports the plan because a Fang-owned Examiner would be competitive with a Hearst-owned Chronicle.

The antitrust suit was filed by Clint Reilly, a former mayoral candidate and a failed bidder for the Examiner, who says Hearst is trying to boost its profits by creating an illegal monopoly.

Hearst is attempting to dissolve the joint operating agreement that has tied the morning Chronicle and the afternoon Examiner since 1965. Lawyers say they expect the judge to rule within about two weeks.

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