Readers: Board rejects my Dubow ethics complaint

Gannett Chairman and CEO Craig Dubow (left) disclosed today that fellow board members dismissed an ethics complaint I brought against him a month ago over $40,000 in Gannett Foundation money he directed to a North Carolina university. The company and the school, Western Carolina University, refuse to say whether the money was deposited in a scholarship fund honoring Dubow and his wife.

Dubow's remarks came in response to an employee question during an early afternoon webconference for GCI's approximately 42,000 workers, Gannett Blog readers say. "The board selected a third-party law firm to fully investigate the complaint,'' Anonymous@5:01 p.m. says. "The complaint was found to be without merit (as determined by the law firm) and the board accepted their finding."

The conference followed release of dismal fourth-quarter financial results, where net income plunged 36% from a year before and the company wrote off as much as $5.9 billion in assets. Shares plunged anew on heavy volume, closing at $5.77 -- down 16%.

Dubow's statement is Gannett's first public acknowledgement of my month-old complaint, and its outcome. My concerns focused on whether he violated the ethics policy in directing the $40,000 to Western Carolina University, under a charity perquisite available to select current and former top executives.

Also, I expressed concerns over whether the company had properly reported the Gannett Management Committee perquisite as a benefit to the U.S. Securities and Exchange Commission in the annual proxy report to shareholders.

Dubow, 54, has been chairman and CEO since July 2006.

Where's the $40K?
Gannett and the school, in Cullowhee, N.C., will not say whether the money was deposited in the Craig A. and Denise W. Dubow Endowed Scholarship Fund. To be eligible, students must live in one of three North Carolina counties, effectively making the fund off-limits to virtually all employees.

I gave the complaint Dec. 22 to Barbara Wall, vice president and associate general counsel, with a request that it be given to Karen Hastie Williams (left), the lead independent member of the board of directors. I also sent a copy to Williams.

In an e-mail the following day, Wall wrote: "Yes, I did receive the email you sent outlining your concerns and I forwarded it to Karen Hastie Williams yesterday. As I told you in my last email, the issues you raised are being carefully reviewed."

To the best of my knowledge, however, I was never notified of the case's final disposition.

In an e-mail I got this afternoon, a reader quotes Dubow saying: "Because the complaint concerned me," Williams referred the matter to an outside law firm "for third party independence."

The reader's note continues: "He said the matter was checked out by the independent firm, which he did not name; and he said the firm found 'no merit to the question' and no problems related to the actions of the Gannett Foundation, no problems related to company policy or the SEC. The matter 'was taken to an outside law firm for third-party independence.'"

A question for SEC enforcement
Is the board's action a material event that should be reported to the U.S. Securities and Exchange Commission in a Form 8-K?

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