*

'60 Minutes' staffer says the deal sets a 'horrible

precedent'

for the network

*

Paramount needs Trump administration approval to seal

Skydance

merger

*

Sen. Elizabeth Warren called for an investigation into

donations

to Trump presidential library

By Dawn Chmielewski

LOS ANGELES, CALIFORNIA, July 2 (Reuters) - Paramount

Global's ( PARAA ) settlement of the "60 Minutes" lawsuit filed

by U.S. President Donald Trump provoked condemnation on

Wednesday from CBS News current and former employees, press

freedom advocates and legislators.

Paramount's agreement to pay $16 million to resolve a civil suit

over what Trump alleged was the network's deceptive editing of

an interview with presidential candidate Kamala Harris sets a

dangerous precedent that threatens the free press, journalism

advocates warned.

One current "60 Minutes" employee who spoke with Reuters

said that during a call Wednesday, newsroom staff expressed

"widespread distress" about the settlement and concerns about

the future of the CBS News prime time news magazine and its

hard-hitting brand of journalism.

The staffer, who requested anonymity to speak publicly about

his employer, said that while CBS News avoided the worst outcome

in its settlement with Trump - an apology - the agreement

nonetheless sets a "horrible precedent" in agreeing to make

public transcripts of future interviews with presidential

candidates.

The settlement follows ABC News's decision in December to pay

$15 million to settle a defamation lawsuit over anchor George

Stephanopoulos's on-air description of the president's conduct

in the E. Jean Carroll case.

"With two major network owners bowing to the president in

quick succession, the danger is clear: emboldened politicians

and powerful actors will feel more free than ever to weaponize

lawsuits and bring regulatory pressure to bear to silence and

censor independent journalism," said Tim Richardson, journalism

and disinformation program director at free-speech advocate PEN

America.

On Wednesday, U.S. Senator Elizabeth Warren called for an

investigation into the settlement, which will be paid to a fund

supporting Trump's future presidential library, said she will

soon introduce legislation to "rein in corruption through

presidential library donations."

$10 BILLION LAWSUIT

Trump filed the $10-billion lawsuit against CBS in October,

alleging the network deceptively edited an interview that aired

on its "60 Minutes" news program with then-vice president and

presidential candidate Kamala Harris to "tip the scales in favor

of the Democratic Party" in the election. In an amended

complaint filed in February, Trump bumped his claim for damages

to $20 billion.

CBS aired two different versions of Harris's response to a

question about the Israel-Hamas war, according to the lawsuit

filed in federal court in Texas. CBS previously dismissed the

lawsuit as "completely without merit" and asked a judge to

dismiss the case.

Steve Kroft, retired long-time "60 Minutes" correspondent

called the settlement a "travesty" adding, "This is but the

latest attempt by the Administration to damage the country's

institutions and encroach upon the rights granted to the people

under the First Amendment."

Rome Hartman, one of the producers on the Harris segment who

retired from CBS two weeks ago, called the settlement "a

cowardly capitulation by the corporate leaders of Paramount, and

a fundamental betrayal of '60 Minutes' and CBS News."

Like other current and former staffers, Rome lays blame at

the feet of Paramount controlling shareholder Shari Redstone,

who needs Trump administration approval for its $8.4 billion

merger with Skydance Media.

The Redstone family's payout for the sale of National

Amusements, which holds the family's controlling stake in

Paramount, will be about $1.75 billion, Reuters previously

reported.

"They settled in order to preserve Shari Redstone's payday,"

Hartman said.

Paramount has said the lawsuit is "completely separate from,

and unrelated to" the Skydance transaction and the pending FCC

approval process.

CBS News co-CEO George Cheeks told investors during

Wednesday's annual shareholder meeting that Paramount opted to

settle the lawsuit to avoid the "unpredictable cost" of mounting

a legal defense, and the possibility of an adverse outcome that

would cause reputational damage."

Paramount and CBS did not provide additional comment.

FCC Chair Brendan Carr, who was named chair by Trump on Jan 20,

said last week the commission was continuing to review

the transaction. The FCC did not make a decision by the 180-day

informal deadline in mid-May.

INCREASED SCRUTINY

As the months-long legal standoff between Trump and

Paramount dragged on, seven current and former journalists at

"60 Minutes" said they have experienced heightened oversight

over their work, including high-level executives sitting in on

screenings, extensive review of any story touching on the Trump

administration or the war in Gaza, and story lists being

scrutinized at the highest level. However, no "60 Minutes"

stories were blocked from airing.

"60 Minutes" lost a key ally in May, insiders said, when CBS

News President Wendy McMahon, who defended the news organization

from meddling, resigned, saying "it's become clear that the

company and I do not agree on a path forward."

She followed "60 Minutes" executive producer Bill Owens, who

resigned in April after months of increasing oversight over the

long-running newsmagazine, at the urging of Redstone, according

to three people familiar with the matter.

"Today is a sad day for press freedom," said Jameel Jaffer,

executive director of the Knight First Amendment Institute at

Columbia University, who said he believes Paramount would have

prevailed in court. "Now Trump's presidential library will be a

permanent monument to Paramount's surrender, a continual

reminder of its failure to defend freedoms that are essential to

our democracy."