Marketwatch broke the news late Wednesday that Google's board of directors voted down a shareholder petition put forth by the New York City Comptroller's office, which would have compelled its management not to engage in "pro-active censorship," and not to host users' private data in countries that place restrictions on their citizens' Internet use.

Comptroller William Thompson, Jr., issued the petition last December on behalf of the New York City Pension Funds, which at the time, according to the comptroller's office, held $276.2 million in Google shares on behalf of city employees. A similar shareholder petition was issued at the same time to the board of Yahoo, in which the pension fund holds $110.5 million in shares based on last December's value.

"Political censorship of the Internet degrades the quality of that service and ultimately threatens the integrity and viability of the industry itself, both in the United States and abroad," the petition reads. "Technology companies in the United States such as Google, that operate in countries controlled by authoritarian governments have an obligation to comply with the principles of the United Nations Declaration of Human Rights...[and] have failed to develop adequate standards by which they can conduct business with authoritarian governments while protecting human rights to freedom of speech and freedom of expression."

The proposal suggested that Google's management take steps to prevent personal data from being "hosted in Internet restricting countries where political speech can be treated as a crime by the legal system," and provide users with reports as to cases where legally-binding censorship requests had to be complied with by Google in order for its business to continue in those countries under their laws.

Last December's initiative had garnered support from Reporters Without Borders, which last year accused the Chinese government of blocking citizens' access to Google News. In a statement released at the time of the initiative, the organization said, "More and more initiatives are being taken by individual shareholders and investment funds to force Internet companies to respect certain ethical principles when operating in repressive countries. The New York City Pension Fund's involvement is excellent news because it is an investor with both financial and symbolic weight."

Google has issued no comment for its part as yet. Meanwhile, Thompson is said to be considering another run as a Democrat for Mayor of New York City in 2009, perhaps against the Republican incumbent, Michael Bloomberg. Thompson's main platform will apparently be to restore accountability to the city's public schools.

A Quinnipiac University poll last month, asking New York City residents to fill in the blank for who they'd like to see run for mayor, netted an 18% response for Mayor Bloomberg, versus a 1% response for Thompson.

Thus far, news sources have noted Thompson has not made any threats to divest the city of any of its Google shares. Even if Thompson wasn't planning on taking that bold step, he may be pressured to do so anyway by his own would-be constituency: Last month, a human-chain protest was held in Manhattan by students protesting the government of China's alleged involvement in the genocide in Darfur province in Sudan. There, city leaders urged a divestiture of city pension funds from companies that do business in China as a method of registering that protest. If the comptroller's report is accurate, Google may be among the largest companies, if not the largest, in which the city pension fund holds shares.

Suddenly, the company noted for its stance on "doing less evil" may find itself, perhaps inadvertently, mired in the fallout from the greatest evil of all, thanks in no small part to classic New York City politics.

CORRECTION 11:30 am CT April 6, 2007 - BetaNews was contacted this morning by Danica Gallag of the New York City Comptroller's office. Gallag told us that, contrary to the reports we had read, New York City Comptroller William Thompson, Jr. had not made a primary run for mayor of New York City in 2004. New York newspaper accounts which we believed referred to a primary run in 2004, she said, probably actually referred to either Thompson's initial successful run for comptroller in 2001 or his re-election in 2005. He may consider a mayoral run in 2009 against whoever the Republican candidate may be, though she reminded us that, contrary to the results of the Quinnipiac University poll we cited, it can't be Michael Bloomberg due to term limits.

BetaNews cited New York press reports concerning a 2004 incident involving city accounting for orange socks purchased for prison inmates. Unfortunately, we discovered there were some misrepresentations in what we'd read: Once the facts were finally revealed, Thompson was the person who pointed out the existence of state purchases of socks at $4.99 apiece, not the person whose accounting was discovered by someone else. We sincerely regret this error and have made redactions in the story above.

Gallag also stated that Thompson's mayoral campaign platform may or may not include accountability in the city's public schools, given the fact that he has not yet announced whether he'll run for mayor in 2009. Thompson has recently given a major speech on this subject which reference a mayor's duties to that end.