Jan. 10 (Bloomberg) -- Viacom Inc.'s CBS fired four news employees after an independent panel found errors in a report anchored by Dan Rather that said President George W. Bush received preferential treatment in the Texas Air National Guard.

CBS failed to do fair and accurate reporting and made ``lapses every step of the way,'' the network said today, citing a report it commissioned by former U.S. Attorney General Dick Thornburgh and retired Associated Press Chief Executive Louis Boccardi. The network fired Senior Vice President Betsy West, ``60 Minutes'' Executive Producer Josh Howard and his deputy, Mary Murphy, as well as Mary Mapes, the story's producer.

``The bottom line is that much of the Sept. 8 broadcast was wrong, incomplete and unfair,'' Leslie Moonves, co-president of Viacom, said today in a statement. The problems were caused by a ``myopic zeal'' to be first with the story and a ``rigid and blind defense'' of the segment after it aired, the report said.

The broadcast became an issue during the U.S. presidential campaign and may have spurred Rather's announcement to step down this year after more than two decades as the evening news anchor. The panel's report may help the network repair its damaged credibility, said Frank Sesno, a former CNN Washington bureau chief who's now a professor at George Mason University.

Rather, Heyward Stay

``CBS's flaw here was not political, it was journalistic,'' said Floyd Abrams, a partner with Cahill, Gordon & Reindel in New York, who specializes in First Amendment law and represents media companies. ``Even in a highly competitive atmosphere, when a potentially important story is being researched, the most detailed care must be given to getting the story right.''

CBS is a former client of Abrams's.

Viacom's Class B shares rose 52 cents to $38.18 at 4:18 p.m. in New York Stock Exchange composite trading. The stock fell 18 percent last year.

CBS said Rather has taken ``personal responsibility'' for the story and the network will take no further action against him. Rather had no comment on the report, according to the ``CBS Evening News'' broadcast tonight, anchored by Bob Schieffer. CBS News President Andrew Heyward will also stay. He had told West to carefully vet the story, CBS said today.

``All Americans should welcome today's report on CBS News' unprofessional conduct,'' Ed Gillespie, chairman of the Republican National Committee, said in a statement. ``CBS deserves praise for undertaking this effort.''

West declined to comment today. Mapes, who lives in Dallas, doesn't have a listed phone number. Mapes told the Wall Street Journal today she wouldn't comment until she reads the report. A phone call to Rather's office wasn't returned.

`Controversial Source'

The network relied on a ``controversial source with a partisan point of view'' and failed to authenticate the documents used. It assigned that job to a junior staffer with no experience at such a task, Thornburgh and Boccardi said in a 224-page report prepared with the help of the Washington-based law firm Kirkpatrick & Lockhart Nicholson Graham LLP.

Rather asked ``the right questions'' about the team who put together the story, though he was unwilling to consider they could be wrong, according to the report.

The network said it created a new position, senior vice president of standards and special projects, to enforce and uphold news standards, including vetting confidential sources. It named Linda Mason, a CBS employee since 1966, to the post.

`Not a Great Day'

``It's not a great day for CBS News,'' Moonves said in an interview on Cable News Network. ``But it is an opportunity for us to re-examine ourselves and hopefully move on and do better in the future.''

``The vetting process didn't work,'' Moonves told CNN.

The ``60 Minutes'' story cited as evidence copies of memos provided to the network by a confidential source.

Rather recanted the story on Sept. 20 and said the network was ``deliberately misled'' by retired National Guard Lieutenant Colonel Bill Burkett, who provided the documents. CBS said Burkett provided a false account of the documents' origins.

Rather reversed himself after the Associated Press, the Washington Post and ABC News published stories casting doubt on the report, citing document experts who questioned the authenticity of the memos used on ``60 Minutes.''

CBS named Thornburgh and Boccardi as the panel to probe the story and report to management after Rather and Heyward apologized.

Thornburgh, a Republican, served as attorney general under U.S. Presidents Ronald Reagan and George H.W. Bush from 1988 to 1991 and was governor of Pennsylvania from 1979 to 1987. Boccardi retired from the Associated Press in 2003 after leading the news organization for 18 years.

The Washington Post reported on Oct. 4 that producer Mapes was the ``driving force'' behind the report. Mapes has produced stories with Rather on the war in Afghanistan, according to the newspaper.

Campaign Issue

The story over Bush's service in the Air National Guard became an issue in a campaign in which Kerry criticized Bush's handling of the Iraq war. The Bush guard story was connected to the election when Kerry strategist Joe Lockhart told reporters that Mapes had put him in touch with Burkett.

Mapes verified that account and told the panel she called Lockhart about Burkett, the panel report said today. Burkett had told her he wanted to provide the Kerry campaign with advice on how to rebut ads by the Swift Board Veterans for Truth group, which criticized Kerry's Vietnam service during the campaign.

When CBS broadcast the Bush report, the network said the documents were from the personal files of Lieutenant Colonel Jerry Killian, Bush's squadron commander in the Texas Air National Guard.

Forgeries?

CBS reported that Killian, who died in 1984, wrote that he was pressured by General Buck Staudt, the head of the Texas Air National Guard, to ``sugar coat'' an evaluation of then-Lieutenant Bush.

After the CBS report, Marian Knox, who was Killian's secretary, said the four memos shown by CBS were forgeries, according to a report in the Los Angeles Times in September.

Rather said last month that his final broadcast will be March 9, the anniversary of the day he took over the anchor chair from Walter Cronkite in 1981.

Moonves said on CNN that Rather began discussing leaving ``long before'' the Bush National Guard story.

``We talked about Dan leaving sometime in the first half of this year,'' Moonves told CNN. ``Whether it had anything to do with this story, or how Dan felt about the story, or the fact that there was an independent panel, I really can't tell.''

``This was Dan's decision,'' Moonves said.

The Bush story could have ``benefited from more direct involvement on Rather's part,'' the report said today.

CBS commentator Andy Rooney told the network's Evening News program the report doesn't put the episode behind CBS.

``I don't think it does any further damage,'' Rooney said. ``I don't think it's going to be forgotten for quite a while.''

To contact the reporter responsible for this story: Alan Mirabella in New York at amirabella@bloomberg.net.

Last Updated: January 10, 2005 21:29 EST