It happened in 2003 around the time of the invasion of Iraq and received little media attention, for obvious reasons. I will try to pull more details out of my dusty memory. Perhaps someone here remembers more.

Found it.

http://www.ceasespin.org/ceasespin_blog/ceasesp…

I don't know this site. It came up on Bing when I remembered Akre was the newscaster's name.

“The attorneys for Fox, owned by media baron Rupert Murdoch, argued the First Amendment gives broadcasters the right to lie or deliberately distort news reports on the public airwaves. “

Clemente said that CBS News Washington Bureau Chief and current pool chairman Chris Isham — who did not respond to phone or e-mail requests for comment Saturday — received a call from the Treasury Department Thursday saying that Feinberg would be available to speak to all of the networks in the pool except for Fox News, and that Bloomberg would be included instead.
Clemente said that when Isham presented that scenario on a conference call with the other pool members — including Fox News — “they unanimously said, instantly, no, that's not gonna fly. Either Fox is in or none of us is doing it.”
Once Isham relayed that message to Treasury, Treasury cleared it with White House Communications Director Anita Dunn, who approved Feinberg's interview with Fox News' Major Garrett.
Clemente said, however, that there was now a catch: every network would get two minutes with Feinberg instead of the previously planned five.

“That's not very normal,” he said. “I'm told that whoever was there was absolutely militaristic about the time limit. Usually two or four or five minutes means, 'Ask your last question,' with a little flexibility. But there was none.”

Clemente added that White House Press Secretary Robert Gibbs acknowledged to Fox News' White House Correspondent Major Garrett that a low level Treasury staffer made a mistake in attempting to exclude Fox from the pool interviews.

So they blamed a low level staffer, for the initial exclusion before the network guys protested.

CBS News' Chip Reid on Fox News and the administration

I got a kick out of this comment from El Cid (Balloon Juice) he pegged the Fox mindset so well :

“Okay, maybe the incident per se didn’t happen, but it still proves that Obama is 30 times worse than Hitler, Stalin, Mao, and Barbra Streisand combined times eleventy bajillion.”

TPMDC dug into it, and here’s what happened.

Feinberg did a pen and pad with reporters to brief them on cutting executive compensation. TV correspondents, as they do with everything, asked to get the comments on camera. Treasury officials agreed and made a list of the networks who asked (Fox was not among them).

But logistically, all of the cameras could not get set up in time or with ease for the Feinberg interview, so they opted for a round robin where the networks use one pool camera. Treasury called the White House pool crew and gave them the list of the networks who’d asked for the interview.

The network pool crew noticed Fox wasn’t on the list, was told that they hadn’t asked and the crew said they needed to be included. Treasury called the White House and asked top Obama adviser Anita Dunn. Dunn said yes and Fox’s Major Garrett was among the correspondents to interview Feinberg last night.

Simple as that, we’re told, and the networks don’t want to be seen as heroes for Fox.

TPMDC spoke with a network bureau chief this afternoon familiar with the situation who was surprised that Fox was portraying the news as networks coming to its rescue.

Seems Faux News tried to generate a phony story, but real investigative pundits caught them in the act of lieing…

Now, I DO think how the Obama administration is handling Fox News is wrong , but for the same reason I felt it was wrong for Republican politicians to pigeonhole most media outlets. Politicians—especially the president—need to be above such nonsense, and not embroil themselves in spitting contests. Let the people decide whether they are honest brokers of information, Fox included.

Now, the Administration is finding itself befouled by controversy as an ABC correspondent asks at a briefing why “one of our sister organizations”

I didn't know that ABC was another one of the Republican Party's propaganda outlet…

Thanks for letting me know.