4B/Las Vegas Revlew-Journal/Wednesday, January 18, 1989 License From ^B stock. His wife, Janet (Phillips) Rogers, is executive vice president and owns another 11.07 percent. Louis Wiener Jr., a longtime Las Vegas attorney and accountant, is the second largest stockholder with a JO percent stake. Hernstadt’s play for KYBC is chronicled in 2.500 pages of hear ing transcripts that, along with other papers from the proceeding, till 21 phone book-sized binders. The file speaks volumes about the lucrative nature of owning a license to broadcast on the public air waves, especially when the station enjoys the best ratings in its mar ket, as-KVBC did in 1988. In.,the 1970s. Channel 3 was op erated by the Donrey Media Lrnup. which owns the Review- Journal. but lost its license because i: ran iota! advertisements in lime slots also paid for by national ad vertisers. The FCC granted Valley Broad casting temporary authority to op erate the station in 1979. But Val ley soon ran into severe financial problems and tapped shareholders for SI.4 million to stay on the air. This divided the owne's into two groups. One side favored cutting expenses, while the other, led by Rogers, favored spending more money to compete with the other two network-affiliated stations in Las Vegas. During this time. Valley’s own ers were a constantly changing cast of characters as the two stockhold er groups fought for control. Hernstadt charged that Valley Broadcasting lied to the FCC about ownership changes, concoct ed a phony sale of stock to protect one owner’s wealth from a govern ment loan foreclosure, misled the commission about who would man- Police age the station, and failed to dis close stockholders’ interests in oth er broadcast outlets. In its defense, Channel 3’s own ers said they did their best to com ply with myriad reporting rules. They also gathered glowing testi monials from civic leaders and key politicians of both major parties, including then-governor and now Sen. Richard Bryan, former Sen. Paul Laxalt, Sen. Harry Reid, and Scott Craigie, then chairman of the state Public Serv ice Commission. Hearings on Hernstadt’s charges were held in 1986 and 1987. In a decision last August, Stirmer ruled in Valley Broadcast ing’s favor on all the major issues covered in the hearings. “Neither individually nor collec tively do the matters explored un der those issues justify the denial of Valley’s renewal application,” Stirmer wrote, referring to Hem- stadt’s charges. "Moreover, Valley has an enviable record of service to the community of Las Vegas, one that entitles the licensee to a strong renewal application.” Stirmer said Valley appeared to be the more likely applicant to pro vide good service. The only advan tage the judge gave Hernstadt, and he called it slight, was that Hern stadt might focus more of his at tention on KVBC than Valley, which owns a stake in two other television stations. Stirmer said he knew of no pub lic complaints about the station’s performance, “and the evidence of Valley’s programming performance has been uncontested." The judge dismissed what was perhaps Hernstadt’s most serious accusation: that Rogers and Dr. James McMillan, a Las Vegas den tist, conducted a “sham" stock sale in 1982 to shield McMillan’s stock from the Small Business Adminis tration, which was moving to fore close on a $220,000 government loan. The $258,000 sale was never consummated. Stirmer said some circumstances of the sale were unusual, but he believes the SBA knew of the transaction and wisely decided in stead to settle the debt by taking property that McMillan owned in Hawaii. He said Hernstadt’s alle gation of fraud was “based on spec ulation, and it is rejected.” In asking the review board to overturn Stirmer’s decision, Hern stadt attorney Robert W. Healy of Washington said KVBC’s owners — many of them lawyers — de fended themselves by saying they were ignorant of FCC reporting rules. Healy said they repeatedly violated FCC rules. In turn, Gerald S. Rourke, Val ley’s Washington lawyer, said Hernstadt had distorted the record and omitted key facts during the FCC proceedings. Dinner Buffet