The corporate governance suit against News Corp that several labor-backed pension funds have filed in Delaware is becoming more interesting — and potentially important. The group led by Amalgamated Bank, the New Orleans Employees’ Retirement System, and the Central Laborers Pension Fund today filed an amended complaint that says News Corp directors rubber-stamped decisions that led to nearly $1B in settlements and verdicts from privacy breaches and other problems at News America Marketing and NDS. These problems plus other incidents including the News of the World hacking scandals “were part of a much broader, historic pattern of corruption at News Corp, under the acquiescence of a board that was fully aware of the wrongdoing, if not directly complicit in the actions,” says the group’s lawyer Jay Eisenhofer of Grant & Eisenhofer. They have already told Delaware’s Chancery Court that News Corp’s execs and board violated their legal duty to protect shareholder interests when they agreed to pay $615M for Elisabeth Murdoch’s Shine Group TV production company — which the group calls “a sweetheart deal.” They also amended the complaint to include the NOTW scandal.
The new filing says that the board’s negligence was evident in developments that led to recent cases where News America Marketing, an in-store marketer, was found to have engaged in espionage and anti-competitive behavior. Among the allegations in five lawsuits: NAM hacked competitors’ computers and “issued false press releases impugning a rival it was trying to purchase,” the labor group says. NAM’s CEO was quoted as having told rivals that “If you ever get into any of our businesses I will destroy you. … I work for a man (Rupert Murdoch) who wants it all and doesn’t understand anybody telling him he can’t have it all.” NAM ended up paying $300M in damages, and $650M to settle three of the suits. Separately, the amended complaint says that Charlie Ergen’s EchoStar charged NDS with helping consumers to illegally access Dish Network programming for free. A federal jury sided with Ergen and issued an injunction that prevented NDS from intercepting EchoStar’s satellite signals.
News Corp isn’t commenting about the new charges. The company told the Delaware court in July that directors have broad latitude to make business judgments — and the complaint failed to prove that they had abused their authority.

Looking at that headline, I think I speak for everyone even remotely familiar with Rupert Murdoch when I say “Duh!”
This really isn’t all that shocking. Historically, boards of directors are filled with people who rarely question the actions of CEOs unless it is negatively impacting the bottom line and/or stock value. The News Corp board in particular is filled with Murdoch sycophants and family members; no one was going to question Rupey.
Most Corporate Boards are independent of the company and its primary owners and the investors have the ability to vote out the board. News Corp setup two classes of stock and loaded the board with family members and cronies. The Class A voting stock is family and friend owned while the Class B Non-voting is sold to the public. This means that the real investors have no votes on the board and cannot remove the board. Anyone who would invest in such a company is taking a great risk as there is no transparency and ultimately you get what occurred here!
Are we really supposed to believe that Fox News wasn’t involved in the illegal phone hacking? Remember, this is the network that Bush White House spokesman Scott McClellan said they routinely fed with talking points that later went out on the wires as “news.” That’s not news, folks, that’s propaganda. Fair and balanced my ass.