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Plodded through Google for a while and came up with the following links. Is Kerry one of Carter's 'bad paper' discharge pardon or was something else happening most of us apparently don't know anything about?

Pardons Granted to Evaders of Vietnam War (1977): Carter grants full pardons to the Americans who fled to Canada to avoid being drafted for the Vietnam War."
http://userpages.umbc.edu/~cgehrm1/pres_site/presidents/jc.html

and

"Mr. Carter invoked his powers as commander in chief and ordered that the "bad paper" military discharges of hundreds of thousands of deserters, malcontents and nonperformers be mandatorily upgraded, so long as they met one of six easily attained criteria."
http://www.jameswebb.com/Articles/wallstreetjrnl/carterinsult.htm