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Suit Accuses BET of Illegal Dealings

Courts: Former executive says he was fired after he complained. Company denies allegations.

August 17, 2000|From Bloomberg News

WASHINGTON — Black Entertainment Television Inc. and its chairman, Robert L. Johnson, were sued by a former executive who claims that he was fired for complaining about "illegal practices" at the company.

Former Chief Financial Officer Dwight Crawford of BET Holdings Inc., which owns Black Entertainment Television, is seeking $21 million in damages for wrongful discharge and civil conspiracy. He said BET officials conspired to evade federal taxes and used corporate funds and credit cards for personal purchases.

Crawford said he was fired in January after telling BET officials he would not go along with the allegedly illegal practices.

BET "terminated Mr. Crawford's employment because he was outspoken in his opposition to the company's illegal and improper financial practices [and] because he refused to participate in such practices," the suit claimed.

After Crawford refused the company's request that he resign, Johnson allegedly threatened that "he would make it difficult for him to secure future employment" if Crawford took legal action against BET.

"The law in the District of Columbia is clear: A company cannot fire an employee for refusing to participate in illegal practices," Crawford's attorney, Debra Katz, said in a statement.

The suit, filed in District of Columbia Superior Court, also named Debra Lee, president and chief operating officer of Black Entertainment Television and BET Holdings, as a defendant.

BET said in a statement that although officials had not seen the suit, the claims were made by "a disgruntled former employee" and are "totally without merit." The company said it "will defend aggressively against any such lawsuit."

Among other allegations, Crawford claimed that Black Entertainment Television set up a shell company to avoid paying taxes. The company's advertising sales employees also deliberately billed advertisers for spots that they had not purchased and that BET had not aired, the suit claimed.

The company hired Crawford in December 1998 to serve as executive vice president and chief financial officer.

Before joining BET Holdings, Crawford was senior vice president and treasurer at Discovery Communications Inc., which owns cable outlets Discovery Channel, Learning Channel and Animal Planet.

In annual reviews with BET, Lee had rated Crawford's performance as "very good' and bordering on "outstanding," the suit claimed.

Washington-based BET Holdings is a closely held company controlled by Johnson and Liberty Media Corp., which purchased it from shareholders in 1998.

Black Entertainment Television, the first and essentially only black cable channel, has succeeded for Johnson, who began it with $500,000 in seed money in 1980.

He now controls a media empire worth an estimated $2 billion.

Johnson is trying to start a Washington-based airline called DC Air, which would serve 44 cities with 122 flights a day.

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