The Right Coast

October 23, 2004
"Sharedholder activism" as blackmail
By Tom Smith

So here, apparently, is what happened with "Stolen Honor." Bill Lerach, strike suit entrepreneur, threatened Sinclair with a shareholder suit if it ran the movie. Then the controller of the state of New York, in charge of a public employee pension funds, threatened Sinclair with legal action as well. Sinclair caved, but who can blame them. Running the movie probably would have been good business, but standing up to political thuggery is not.

This may be the most outrageous thing Bill Lerach has done since he vowed, with respect to legal economist Dan Fischel, to "put that little fucker out of business." A remark that cost him $50 million or so when Fischel sued him, and won. Does anyone need to ask if trial lawyers have too much power when they use it to muzzle the free press? Why is it, someone remind me, that we call these people "liberals"? The only thing liberal about them is the liberal way they use their money to keep themselves in power. It is time everyone with a libertarian bone in their bodies realize the Democrats are as hostile to liberty as the most benighted, snake handling, bible thumping fundamentalist nutcase. At least those nutcases don't call themselves liberals. It would be giving Lerach to much credit to say he is just trying to do the public the good of sparing them a movie that would be bad for them. If Bush wins, the odds of tort reform go up. Shutting down a movie critical of Kerry is good business for the tort kings of the world. Of course, the liberal thing to do would be to congratulate yourself on the good you've done for the public, that just happens to be so good for business, preferably at a charity event where 5 percent goes to charity organizations, who in turn spend a little on your favorite group of victims. Make sure they're registered to vote.

As to the New York state pension fund, well, some of us in the corporate law world said a long time ago that shareholder activism was a bad idea. Pension funds are run by bureaucrats, who are no more immune to the temptations of power than anybody else. The idea that a New York pension fund has an economic stake in whether Sinclair shows a movie, which probably would have garnered many viewers, is beyond absurd. The political hack who made that call should be tossed out of her job, but who's going to launch the hostile tender offer on the pension fund and the state of New York? Oh, I forgot, nobody monitors the Solons at the pension funds.

You can read Roger Simon's review of the movie here. It sounds like a right wing Farenheit 9-11, except with more facts.

If you don't want Bill Lerach deciding what you see, you can see the movie here.