The HP Saga: Surveillance – is this the HP Way?

6 Sep ’06

The news is piling up on the astounding allegation that HP’s Board Chair, Patricia Dunn, directed the surveillance by pretexting of the home phone records of HP Directors in an effort to find a leaker who was passing information to the news media beginning with the furor over the ouster of former CEO Carly Fiorina.

According to an internal HP e-mail, Dunn then took the extraordinary step of authorizing a team of independent electronic-security experts to spy on the January 2006 communications of the other 10 directors-not the records of calls (or e-mails) from HP itself, but the records of phone calls made from personal accounts. That meant calls from the directors’ home and their private cell phones.

The leaker has been identified by the NYT as George A. Keyworth II, asked to resign, and has apparently refused. (BW reports that when he was internally identified Keyworth told the Board he would have volunteered that he was leaking if he had simply been asked). Another Director, Tom Perkins, resigned in protest over the surveillance – the background is detailed in the BW piece, as are efforts by HP to keep the toothpaste in the tube after his resignation.

Kedrosky has called for Dunn’s resignation. He also points to a letter from Tom Perkins, now on the Smoking Gun, that details (successful) efforts to pretext Perkins’ phone records.

Almost as shameful as this story: how easy it is to get someone else’s phone records online.

Update: It seems that pretexting isn’t just for Board members any more – it’s for journalists, too. A positively Nixonian development.

{ 2 comments… read them below or add one }

lslssld September 14, 2006 at 03:11

HP Board lacks integrity

The spying scandal is a sorry comedown for a company that HAD a reputation for excellence and integrity.

The board’s actions have been more of the CYA variety than of truthfulness.

* WHAT PHONE RECORDS? The board played dumb when they realized that directors’ phone records were used in the leak investigation. No one asked, “How did we get these records?”

* BOARD MEMBER RESIGNED FOR “PERSONAL REASONS”: Perkins resigned in May. HP resisted proper reporting to the SEC of the reasons for Perkins’ resignation until the past few days.

* STONEWALLING: Dunn and Hurd have made only weak apologies. Dunn has been far more strident about tracing the leaks from an individual than about the corporate breech of integrity in fraudulent investigations.

* PROTECTING CRIMINALS: HP has refused to identify the private investigation firm or the third party investigators who are suspected of doing the pretexting.

* WEAK APPEASEMENT: Recent announcement of Board changes are weak.
1. Dunn remains chair for 4 MONTHS.
2. She remains on the Board.
3. She will be replaced by Mark Hurd, who is also CEO and President.
4. The Board will backtracking on its new rule, that the Chair and CEO would be different people. This weakens HP’s Corporate Governance.

If the Board had any integrity, it would have acted…
* immediately, upon learning of wrong doing
* without coverup, without excuses
* without compromise to the offenders

The Board must demand Dunn’s resignation from the Board. (There will be more legal fallout for HP if she remains, than if she leaves and HP cooperates fully with the California State, Federal, Congressional, SEC and FBI investigations).

The Board needs to have a non-executive Chair. There needs to be a check on the CEO.

The Board must make a public statement, repudiating in the strongest terms, the tactics used by its private investigators, and reiterating its stand on corporate integrity.

The Board must take ACTION to convince the business and investment community that it is determined to regain the mantle of integrity and excellence it once had under Hewlett and Packard.

Reply

Ben Lucier September 7, 2006 at 10:36

I found the entire situation entertaining, but I’m mostly interested in the “pretexting” component of the story.

Pretexting is “the collection of information about a person under false pretenses”, which appears to be clearly what happened with Dunn’s covert operation. In the US, under Federal law, the Gramm-Leach-Bliley Act specifically outlaws the act of pretexting.

Based on my reading, it seems that some folks (HP counsel) don’t believe the act of “pretexting” is illegal, at least in this case.

I tend to oversimplify things and I’d love to hear an alternate view of pretexting legality, but right now it seems black and white to me:

If a person contacts AT&T and pretends to be somebody they are not, in order to gain access to personal call records, that is illegal, right?

I’m interested to see how this unfolds… especially where the hammer will fall – on Dunn, the person/company she hired that performed the pretexting, or both.

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