How awful is News Corporation’s corporate governance (among other things)?

Bloomberg News on Viet Dinh, the guy who wrote the Patriot Act:

Dinh, 43, is point man between the independent board members and a panel that New York-based News Corp. (NWS) created to cooperate with authorities probing phone hacking by the defunct News of the World tabloid and to evaluate company standards.

A Washington attorney and Georgetown University Law Center professor, Dinh has been a friend of Chief Executive Officer Rupert Murdoch’s oldest son Lachlan since 2003 and is godfather to Lachlan’s second child. In 1992, a decade before they met, the South China Morning Post, then owned by Murdoch, helped Dinh free his sister from a Hong Kong refugee camp.

That’s what News Corporation calls an “independent director”—the godfather of the CEO’s grandchild.

The New York Times has a further rundown on the non-independence of the board.

— Murdoch biographer Michael Wolff writes about News Corp.’s “Mob-like structure.”

It’s all about the organization. It’s an organization all about doing what Rupert wants you to do, or doing what you imagine Rupert wants you to do, or doing what you imagine your boss imagines Rupert wants done. There are few companies as large as News Corp. that are so devoted and in thrall to one man. There are few companies which, over so long, have so assiduously hired the kind of people who would be in thrall to one man. Indeed, News Corp. can be quite a disorganized and scattered company, and yet its driving premise, what unites and motivates this oft-times gang-that-couldn’t-shoot-straight enterprise, is to do as Rupert would have you do.

It’s a superior and blind kind of loyalty. “Can you…?” Murdoch says to several executives visiting with him on his boat (this is the old boat—much smaller than the grander one he has now) when he receives a phone call that he needs to take in private. The executives jump in the water and swim around the boat until the call is done (and this story is not apocryphal).

More:

And partly, it’s because the fundamental currency of the company has always been reward and punishment. Both the New York Post and Fox News maintain enemy lists. Almost anyone who has directly crossed these organizations, or who has made trouble for their parent company, will have felt the sting here. That sting involves regular taunting and, often, lies—Obama is a Muslim. (Or, if not outright lies, radical remakes of reality.) Threats pervade the company’s basic view of the world. “We have stuff on him,” Murdoch would mutter about various individuals who I mentioned during my interviews with him. “We have pictures.”

Fun stuff.

But this reporting (speculation?) is so weak as to be implausible:

Well-sourced information coming out of the Department of Justice and the FBI suggests a debate is going on that could result in the recently launched investigations of News Corp. falling under the RICO statutes.

The Wall Street Journal’s Greg Zuckerman and Steve Eder write that hedge fund selling has been exacerbating the recent drops in the market:

For all the talk of the need for investors to avoid panic, hedge funds have been dumping the shares and debt of many of their favorite companies, according to investors and traders, contributing to a downdraft in many stocks.

Stocks widely held by hedge funds, such as Bank of America Corp., Goodyear Tire & Rubber Co., Dendreon Corp., Ensco PLC and Charter Communications Inc., fell more than the market on Monday. Other funds also are selling junk bonds and loans of companies…

More proof that hedge funds may be dumping shares faster than other investors: A basket of stocks representing major positions of hedge funds has fallen 17.3% so far in August, through Monday, compared with a drop of 13.4% for the Standard & Poor’s 500-stock index, according to Goldman Sachs.

As for stocks that hedge funds have limited exposure to, those stocks are down about 11%, Goldman says.

It’s worth noting that they didn’t sell today. The Dow whipsawed around, ending up 429 points.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.