Hacker kept on NDS payroll after accused of piracy

By Tori Richards

SANTA ANA, California (Reuters) - A high-ranking News Corp official testified on Tuesday that he kept two hackers on the payroll for years after one of them was accused of infiltrating the security system of rival satellite television company DISH Network Corp.

Abraham Peled, a member of News Corp's executive management committee headed by Rupert Murdoch and CEO of affiliate NDS Group, said he continued to employ Christopher Tarnovsky after he was told by another former hacker that Tarnovsky posted information on the Internet to let users unscramble DISH's network and receive free service.

"We made it clear that these people were turning over to the good side and are expected to fight piracy instead of engage in it and we trusted Mr. Tarnovsky and instructed him not to do so," Peled said at a corporate spying trial in federal court in Santa Ana, California.

"Obviously, there's a theoretical risk (in hiring hackers)," he added.

The espionage case was brought by EchoStar Communications, which later split into two companies, DISH and EchoStar Corp, with DISH being the primary plaintiff. DISH claims it lost $900 million in revenue and system-repair costs.

NDS, which provides security technology to News Corp's global satellite network, including DirecTV, has denied sanctioning piracy and said it was merely aiming to make its own system more secure.

Tarnovsky was paid by News Corp publishing house Harper Collins and made $128,000 in 2000. At the end of the year, he received a $5,000 bonus "because he must have made a very good technical contribution," Peled testified.

An earlier trial exhibit showed that the DISH code appeared on the Internet the same month Tarnovsky received his bonus.