HP spying scandal

HP spying scandal

On September 5, 2006 Newsweek published a story revealing that the chairwoman of HP, Patricia Dunn had hired a team of independent electronic-security experts who spied on HP board members and several journalists, [ [http://www.newsweek.com/id/45548/ Suspicions and Spies in Silicon Valley | Newsweek Business |Newsweek.com ] ] to determine the source of a leak of confidential details regarding HP's long-term strategy published as part of a CNET article [ [http://news.com.com/HP+outlines+long-term+strategy/2100-1014_3-6029519.html HP outlines long-term strategy |CNET News.com ] ] in January, 2006. The group of electronic-security experts used a technique known as pretexting to obtain call records of HP board members and nine journalists, including reporters for CNET, the "New York Times" and the "Wall Street Journal". The investigators had misrepresented themselves as the board members and journalists to their phone companies in order to obtain their phone records. Dunn has claimed she did not know beforehand the methods the investigators used to try and determine the source of the leak. [http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/09/09/HP.TMP HP chairwoman defends probe of board's leaks ] ] Board member George Keyworth was ultimately outed as the source and on September 12, 2006, along with HP's announcement that Mark Hurd, the current CEO, will replace Dunn as Chairman after the HP board meeting on January 18, 2007. It was also announced that Dunn would continue as an HP board member after January 18, 2007, a position she had held since 1998. [cite news | url = http://www.usatoday.com/tech/techinvestor/corporatenews/2006-09-12-hp-hurd-advantage_x.htm | title = New HP chief makes the best of a bad situation | publisher = USA Today |date= 2006-09-13 | accessdate = 2006-09-25 ] On September 22, 2006 Hurd announced at a special press conference that Ms. Dunn had resigned effective immediately from both the Chairmanship and the Board; no statement was issued to indicate whether Dunn's departure was connected to the pretexting scandal or not. On September 28, 2006, Ann Baskins, HP's general counsel (head attorney) resigned effective immediately, [cite news | url = http://www.businessweek.com/ap/financialnews/D8KDROM81.htm | title = HP general counsel Ann Baskins resigns | publisher = BusinessWeek |date= 2006-09-28 | accessdate = 2006-09-28 ] hours before she was to appear as a witness before the House Committee on Energy and Commerce at which she would later invoke the Fifth Amendment to refuse to answer questions.cite news | url = http://money.cnn.com/2006/09/28/technology/hp_hearing/?postversion=2006092818 | title = HP: Grueling day for Hurd & Dunn | publisher = CNN |date= 2006-09-28 | accessdate = 2006-09-28 ]

California criminal case

On October 42006, California Attorney General Bill Lockyer filed criminal charges and arrest warrants against Dunn and Hunsaker, and three outside investigators. [cite news | url = http://money.cnn.com/2006/10/04/news/companies/hp_california/index.htm | title = Now, HP is a criminal case | publisher = CNN |date= 2006-10-04 | accessdate = 2006-10-04 ] The complaint alleges the following four felony violations of the California Penal Code:
# Conspiracy to commit crime in violation of Sections 182(a)(1)
# Fraudulent use of wire, radio, or television transmissions in violation of Section 538.5
# Taking, copying, and using computer data in violation of Section 502(c)(2)
# Using personal identifying information without authorization in violation of Section 530.5(a)

The criminal complaint can be found [http://money.cnn.com/2006/10/04/news/companies/hp_california/index.htm?cnn=yes here] . Although the investigation is still in progress, notably HP CEO Mark Hurd, former HP employees Ann Baskins and Anthony Gentilucci, and the company itself were not charged.

On March 142007, the Judge in Patricia Dunn's criminal case dismissed all charges.

Investigation by the House Committee on Energy and Commerce

On September 11, 2006, CNET News.com publicly released a five-page letter written by the United States House Committee on Energy and Commerce to Patricia Dunn stating that they have, for the past seven months, been conducting an investigation on Internet-based data brokers who allegedly use "lies, fraud and deception" to acquire personal information, and allow anyone who pay a "modest fee" to acquire "itemized incoming and outgoing call logs", not only for cell phone numbers but also for VoIP numbers, landline numbers, and unpublished phone numbers. Additional data that could be given include addresses and other personal data, obtained without the consent or prior notice to the owner of the number. The committee had learned about HP's use of pretexting through their September 6th SEC filing and through their own inquiry of HP's Nominating and Governance Committee, stating they are "troubled" by the information, "particularly that it involves HP—one of America's corporate icons."

The committee requested, under Rules X and XI of the United States House of Representatives, the following information from HP by September 18, 2006:

1. The name and identity of the outside consulting firm cited in HP's September 6th, 2006, filing with the SEC (the outside consulting firm), and of any other outside consultants who were hired by HP to assist in conducting the Leak Investigation.
2. Copies of any contracts, letters of engagement and investigative plans related to the Leak Investigation that was conducted by the outside consulting firm or by any other party.
3. The names and identities of all third parties, whether hired directly by HP or by HP's outside consulting firm, who were used during the leak investigation to procure, or to attempt to procure telephone records and other personal consumer information of any targets or subjects of the Leak Investiagation
4. A list of all individuals or entities that were targets or subjects, or designated as targets or subjects, of the Leak Investigation.
5. A list of all individuals, including HP employees, who were involved with conducting the Leak Investigation or who had contemporaneous knowledge of the Leak Investigation.
6. A list of all individuals or entities whose telephone records or other personal consumer information were procured or attempted to be procured by the outside consulting firm or by any party during the period January 1, 2005, to the present.
7. A list of all individuals whose telephone records or other personal consumer information were procured by the outside consulting firm or by any party during the period January 1, 2005, to the present. For each individual, describe the types of records that were procured.
8. Copies of all reports prepared for the Leak Investigation by the outside consulting firm or by any other party, including any and all analysis or opinions regarding the appropriateness or legality of pretexting.
9. A copy of the letter of engagement with the law firm Wilson Sonsini Goodrich & Rosati regarding the Committee Inquiry.
10. Copies of all reports prepared for the Committee Inquiry, including any report prepared by the firm Wilson Sonsini Goodrich & Rosati.
11. Copies of all draft and final Board minutes that either relate to either the Leak Investigation or the Committee Inquiry.

In addition to the above mentioned information, the Committee on Energy and Commerce is also requesting the following information from HP by September 25th, 2006:

12. All records relating either the Leak Investigation or Committee Inquiry, including but not limited to communications to or from the outside consulting firm, communications by or between HP employees or Board Members, and communications to or from the outside counsel. Please do not provide any copies of the actual telephone records or any other records procured.
http://i.n.com.com/pdf/ne/2006/househp_letter.pdf]

At the September 28, 2006 hearing, Dunn and Hurd both testified extensively about the investigation. [Dunn's prepared testimony can be read [http://www.mercurynews.com/multimedia/mercurynews/archive/promo/09282006_Testimony_Dunn.pdf here] ] [Hurd's prepared testimony can be read [http://energycommerce.house.gov/108/News/09282006_Testimony_Hurd.pdf here] .] Dunn testified that until June or July 2006, she did not realize that "pretexting" could involve identity misrepresentation. Dunn repeatedly insisted that she had believed that personal phone records could be obtained through legal methods.

Other witnesses, including Ann Baskins, HP's former General Counsel, Kevin Hunsaker, a six-year HP employee who was a former HP Senior Counsel and "Director of Ethics and Standards of Business Conduct," Anthony Gentilucci, former HP/Compaq/DEC chief of global investigations, and several private investigators invoked the Fifth Amendment, refusing to answer questions due to the ongoing criminal investigations.

Baskins' attorney's letter to the committee contains several documents describing the investigatory methods, who was pretexted, and whether there were any illegal acts committed, including memoranda prepared by HP's outside law firm Wilson, Sonsini, Goodrich & Rosati (Larry Sonsini was among the witnesses at the hearing.) [cite news | url = http://www.mercextra.com/multimedia/business/baskins.pdf | title = Letter: Baskins declines to testify | publisher = San Jose Mercury News |date= 2006-09-28 | accessdate = 2006-09-29 ]

Hunsaker's May 24 confidential "attorney-client privileged" final report, which gives full details of the investigation, is also available. [cite news | url = http://www.thesmokinggun.com/archive/0929061hp1.html | title = Unauthorized Disclosure Investigation | publisher = The Smoking Gun |date= 2006-09-29 | accessdate = 2006-10-03 ]

Federal criminal charges

On January 11, 2007, Bryan Wagner (a private investigator who was engaged by Hewlett-Packard in connection with the boardroom leaks and had already been charged in the California case) was charged by the federal government with conspiracy and identity theft for allegedly obtaining the Social Security Number of an unidentified journalist to obtain the journalist's phone records. [cite news | url = http://www.marketwatch.com/news/story/feds-charge-investigator-h-p-pretexting/story.aspx?guid=%7B09B86183-1C6F-4197-8EF1-ACED2CB92A67%7D| title = Feds charge investigator in H-P boardroom case | publisher = MarketWatch by Dow Jones |date= 2007-01-11 | accessdate = 2007-01-16]

References


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