A few weeks before the November elections, the Hamilton Journal-News learned of allegations about a possible kickback scheme in the office of an Ohio politician.

The newspaper, which had to pay a $200,000 libel judgment last year, looked into the charges. But it had trouble corroborating the charges, which came from a disgruntled former employee, and editors decided not to publish them.

"We simply don't publish material we're not convinced we could defend adequately in a court of law," managing editor Ozzie Kleinas said. "I anticipate a suit with everything we publish."

A recent spate of multimillion-dollar libel judgments has underscored the financial risk of publishing controversial reports and, in some cases, prompted news organizations to revise practices that they now admit were sloppy or inadequate.

After years of watching huge jury awards routinely overturned on appeal, editors and publishers have reacted with concern as the Supreme Court has refused to block three such awards in the last two years.

James Naughton, managing editor of the Philadelphia Inquirer, does not minimize the impact of a $34 million jury award against the paper last May in a libel suit brought by former city district attorney Richard Sprague.

"I don't think we will wind up paying anyone $34 million, but it sure does scare the hell out of you when someone says, even on an interim basis, that you ought to," Naughton said.

A series of libel cases against the Inquirer, including suits by two Pennsylvania Supreme Court justices, "doesn't seem to have deterred this newspaper from doing aggressive reporting," Naughton said. "But I don't know if a reporter who spent a significant amount of a year's time defending a past story, instead of working on the next one, would agree."

Sprague sees the size of his award as a powerful deterrent against media misconduct.

"To me, it was like prosecuting someone who committed a murder," Sprague said. He said punitive damages are meant "to punish the wrongdoer so he won't do it again. It's got to be a punishment that really makes the wrongdoer holler 'Ouch' and a symbol to other like-minded people."

Asked whether such awards might have a "chilling effect" on press freedom, Sprague said: "I hope it does chill the publication of defamations. . . . Why shouldn't that be chilled?"

Recent verdicts against the news media include:

A $13.6 million award in September to auto racing promoters who sued the Cleveland Plain Dealer over a report alleging that they had enriched themselves from proceeds of the Budweiser Cleveland Grand Prix. The case is being appealed.

A $28 million award in April to a heart surgeon who sued KENS-TV in San Antonio over reports alleging that he performed unnecessary surgery on elderly patients. An appeal is pending.

A $2.8 million judgment against the Pittsburgh Post-Gazette, which had accused attorney Richard DiSalle of misconduct in drafting the will of a Pennsylvania millionaire. The Supreme Court refused last year to block the award, the largest libel judgment ever paid by a newspaper.

The $200,000 judgment against the Hamilton Journal-News, which came in a suit by an unsuccessful judicial candidate accused of using "dirty tricks" to promote an investigation of his opponent. The Supreme Court upheld the award last year.

A $3 million judgment against CBS in a case in which a Chicago anchorman accused Brown & Williamson Co. of improperly trying to entice youngsters to smoke. The Supreme Court let the award stand in 1988.

The $34 million judgment against the Inquirer, which suggested in a 1973 article that Sprague might have quashed a homicide investigation involving the son of a close friend a decade earlier. The Inquirer is appealing.

"Plaintiffs are recognizing there may be more gold at the end of the rainbow," said attorney Bruce W. Sanford, who specializes in First Amendment law.

Washington media lawyer Lee Levine said the impact of such cases is unmistakable. "When you're dealing with clients, you see the nervousness, the walking away from stories they view as risky, even when they think they've got it right," he said.

"The Supreme Court has been sending a signal that is perceived as more hospitable to libel plaintiffs. There is a sense that the media have gone too far, are too powerful and too arrogant and run roughshod over people's lives."

The high court stirred new concern last June in a suit brought by a wrestling coach against an Ohio newspaper. The court ruled that expressions of opinion can be the subject of libel suits if they contain "false and defamatory" facts.

Public figures have had difficulty winning libel suits over the last 25 years under Supreme Court rulings requiring them to prove that a news organization acted with actual malice, knowingly publishing falsehoods or acting with reckless disregard for the truth. About 90 percent of libel suits are dismissed before trial.

"The legal barriers are virtually insurmountable," said Michael McDonald, president of the Center for Individual Rights, a conservative public interest law firm. "The only way a public figure can win a libel suit is if he turns up the proverbial smoking gun."

In August, a federal appeals court in San Francisco overturned a $19 million award against NBC in a suit by singer Wayne Newton over 1980 newscasts that linked him to organized crime figures.

New York attorney John Walsh, who represented former Mobil president William P. Tavoulareas in a suit against The Washington Post, said plaintiffs still face "very difficult appellate scrutiny." The Supreme Court in 1987 upheld the finding of a federal appeals court in striking down a trial jury's $2 million award against The Post.

"I don't see a big resurgence of libel cases or any shifting of the rules in favor of plaintiffs," Walsh said.

The last wave of newsroom jitters over libel crested with two highly publicized suits in the early 1980s. Retired Army Gen. William C. Westmoreland withdrew his suit against CBS shortly before jury deliberations were to begin, while former Israeli defense minister Ariel Sharon won his case against Time magazine but received no damages. The recent multimillion-dollar awards, by contrast, have drawn far less publicity.

In the DiSalle case, the Pittsburgh Post-Gazette had to pay more than $300,000 from its own coffers after suing to force its insurance company to cover the rest of the $2.8 million judgment. "That's a big hunk of money," editor John Craig said.

As for the effect on his paper, Craig said: "I don't think you pull punches, but I do think you're more self-conscious. Someone could make an argument that's not necessarily bad."

Craig dismissed the DiSalle case as a "bizarre" anomaly, saying, "This guy had absolutely no proof of any damages."

But DiSalle's lawyer, Dan Berger, said the Post-Gazette deserved to lose because it "paid no attention to the reputation he had built up over 35 years. That meant nothing to the newspaper."

Many libelous stories turn on the motivation of disgruntled people. A key source in the KENS-TV broadcasts about heart surgeon Sudhir Srivastava was the doctor's secretary, who provided the station with confidential medical records that may have been obtained illegally. Sprague said the Inquirer story about him was "engineered" by a reporter whom he had "prosecuted and convicted" in a wiretapping case.

Naughton said the presiding judge, Charles P. Mirarchi, blocked the Inquirer from presenting key witnesses and evidence. He noted that Mirarchi had been the subject of an Inquirer report on nepotism in which several members of the judge's family were found to be on the public payroll.

In the Hamilton Journal-News case, the paper quoted a grand jury witness just before the 1983 election as saying that Daniel Connaughton, running for a city judgeship, had orchestrated an investigation of his opponent, whom the Journal-News had endorsed. The Supreme Court said it was "utterly bewildering" that the newspaper made no attempt to interview a key witness who could have disproved the charges.

"We have not gone so far . . . as to accord the press absolute immunity in its coverage of public figures or elections," Justice John Paul Stevens wrote.

Kleinas said the experience has led to more rigorous standards at the Journal-News. "There may have been a tendency to be overeager and overzealous," he said. "We did not always have the kind of substantiation I would insist upon today."