Hewlett faces US attorney probe
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A US attorney general is investigating methods used by Hewlett Packard to spy on senior members of staff.
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Hewlett-Packard Co. chairwoman Patricia Dunn, a former company lawyer, and three outside investigators wereÂ charged Wednesday in CaliforniaÂ on felony charges related to the conduct of an investigationÂ to track down news leaks from the HP board that allegedly broke state law.
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(InfoWorld) - Hewlett-Packard obtained the telephone records of nine reporters as part of its internal probe of information leaks, the company confirmed Thursday. The company sent the list of the nine reporters to the Office of the Attorney General of the State of California, in response to the Attorney General's inquiries. "HP is dismayed that the phone records of journalists were accessed without their knowledge, and we are fully cooperating with the attorney general's investigation," said company spokesman Ryan Donovan. In an Aug. 31 filing with the U.S. Securities and Exchange Commission (SEC),Â HP admittedÂ that an outside investigator had used "pretexting," a technique in which an investigator may obtain information by disguising their identity. HP's internal investigation was sparked by what the company said were "multiple leaks of confidential HP information," including discussions by the board of directors, HP said in the SEC filing. At a May 18 board meeting, HP board members asked fellow director George A. Keyworth II to resign, as a source of those leaks. He declined, but Thomas J. Perkins did resign over a dispute with HP's Nonexecutive Chairman Patricia Dunn over the investigation's handling, the company said. The California Attorney General has asked HP for information about techniques used in the leak investigation, while the SEC is making inquiries into a filing HP made when Perkins resigned. HP's Donovan confirmed reports that among the journalists whose phone records were accessed were a reporter from The Wall Street Journal and a reporter from CNet Networks. He declined to name the other reporters. The Wall Street Journal and CNet published reports including leaked information from board meetings. The leaks to the Wall Street Journal included information about discussions leading up to the firing of Chief Executive Officer Carly Fiorina last year. The Attorney General's office declined to name the reporters on the list handed over by HP. (Additional reporting by Stephen Lawson in San Francisco.) Â
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By JORDAN ROBERTSON  SAN FRANCISCO - Investigators plan to search the Boston-area offices of a private investigation firm involved in the Hewlett-Packard Co. spying scandal, California Attorney General Bill Lockyer said Thursday.
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(InfoWorld) - Ousted Hewlett-Packard Chairman Patricia Dunn, a former company lawyer, and three outside investigators were charged Wednesday in California on felony charges related toÂ the conduct of an investigationÂ to track down news leaks from the HP board that allegedly broke state law. California Attorney General Bill Lockyer's office said charges have also been filed against Kevin Hunsaker, a former senior lawyer at HP; Ronald L. DeLia, a Boston-area private detective; Matthew DePante, manager of Action Research Group, a Melbourne, Florida, information broker; and Bryan Wagner, a Littleton, Colorado, man who is said to have obtained private phone records while working for Action Research. The charges were announced at a press conference held Wednesday at the California Department of Justice. The charges include using false or fraudulent pretenses to obtain confidential information from a public utility, wrongful use of computer data, identity theft, and conspiracy to commit each of those crimes. All of the charges are felonies. "One of our state's most venerable corporate institutions lost its way as its board sought to find out who leaked confidential information to the press," said LockyerÂ in a statement, released Wednesday. "In this misguided effort, people inside and outside of HP violated privacy rights and broke state law." Lockyer's office has been investigating the spying allegations because HP is based in Palo Alto, California. The charges were filed in Santa Clara County Superior Court. The U.S. Attorney's Office in San Francisco and the Federal Bureau of Investigation have been conducting separate investigations of HP. In a statement released after the filing, Dunn's attorney, James Brosnahan, said his client will fight the charges. "These charges are being brought against the wrong person at the wrong time and for the wrong reasons. They are the culmination of a well-financed and highly orchestrated disinformation campaign," Brosnahan said. He did not elaborate on his charge of a disinformation campaign. "As her many supporters fully expect, she will fight these charges with everything she has,â he said. In a statement released Wednesday in advance of the Sacramento press conference, HP said it was continuing to cooperate with state and federal investigators. The private investigators hired by HPÂ allegedly used "pretexting,"Â pretending to be someone they are not, to obtain the telephone records of HP directors, other employees and journalists who cover the company in an attempt to find out who from the board provided information to the reporters. The scandal has attracted the attention of the U.S. Congress.Â On Sept. 28, Dunn toldÂ the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee that she believed employees and lawyers who said that the HP's leak investigation complied with the company's standards of conduct. The subcommittee was holding hearings into the use of pretexting. The committee passed a federal ban on pretexting but the Congress adjourned before the full House or the Senate voted on the legislation. When questioned about the techniques used to track down the leaks arose in the latter part of the investigation, Dunn said, she passed concerns to company Chief Executive Officer Mark Hurd. Before then, the company's lawyers had assured her the techniques were being done "legally and properly," she said. "At no time in the investigation did I authorize its methods," Dunn said. "I asked this to be done in the HP standard way." On his part, Hurd told the subcommittee that he was not aware of the details of the techniques being used. He said he did not read a report from the investigating team that detailed the use of pretexting. Ann Baskins,Â who resignedÂ right before the subcommittee hearing as HP's senior vice president and general counsel, and Hunsaker both asserted their rights not to testify under the Fifth Amendment of the U.S. Constitution during the hearing. Also taking the fifth before the subcommittee were Delia, Wagner, and Action Research owner Joe DePante. Dunn faces these criminal charges at a difficult time in her personal life. Dunn, is scheduled to begin chemotherapy Friday for a recurrence of advanced ovarian cancer, according to a Wednesday report in the San Jose Mercury News. She was diagnosed with ovarian cancer in 2004 and had been treated for breast cancer and melanoma dating back to 2001, the paper reported. (Stephen Lawson and Robert McMillan contributed to this story)Â  Â
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(InfoWorld) - Hewlett-Packard Co. Chairman Patricia Dunn will answer questions on the spying scandal that has embroiled her company during a House committee hearing on Capitol Hill next week. HP's general counsel, Ann Baskins, will also appear at the hearing of the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce, being held next Thursday, said HP spokesman Ryan Donovan. HP's lead outside counsel, Larry Sonsini of the Palo Alto law firm Wilson, Sonsini, Goodrich & Rosati, will also testify, according to Terry Lane, a committee spokesman. Sonsini advised HP on the legality of its investigation into media leaks of details from the company's board meetings between 2005 and 2006. Earlier this month, HP revealed it had hired outside investigators to find the leaker and that they had impersonated the subjects of their investigation in order to gain access to private telephone records. In the course of the search, HP board members and reporters were impersonated. The committee is looking into HP's methods and is considering new federal legislation that would make this practice, called 'pretexting,' illegal. HP is also being investigated by the Attorneys General of California and Massachusetts, the U.S. Federal Bureau of Investigation and the U.S. Attorney's office. Ronald DeLia of investigation firm Security Outsourcing Solutions is also set to appear, but Lane said it is possible he will invoke his Fifth Amendment right to not testify to protect against self-incrimination. Prosecutors reportedly are looking into DeLia's company and a Melbourne, Florida, investigation company, Action Research Group, in connection with the scandal. In a June 11 Congressional hearing on pretexting, several investigators invoked their Fifth Amendment rights and refused to answer questions on the practice, which is considered to be in a legal gray area. The committee has also asked HP Global Security Manager Anthony Gentilucci and Action Research Group owner Joe Depante to testify, but has not heard back from them, Lane said. HP has already provided the committee with "thousands of pages of documents" in connection with its investigation, Lane said. The pretexting scandal has been front page news for several weeks now and has forced Dunn to step down from her chairman's role, effective January. But it has not had much of an effect on the company's financial performance. HP's (HPQ) stock has hovered in the $36 range since news of the affair first broke three weeks ago. HP Executive Vice President Vyomesh Joshi, who runs the company's printing business, downplayed the effect that the scandal was having on HP's management. "I think our focus is business," he said in response to a question on the matter at the Bank of America's Annual Investment Conference in San Francisco Tuesday. "We have a very solid team who is focusing on the business, focusing on the execution. At the end of the day, that is what we want to do." Â
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SACRAMENTO, Calif  - California's attorney general on Wednesday filed felony charges against former Hewlett-Packard Co.  Chairman Patricia Dunn and four others for spying on journalists and the company's own board of directors and executives.
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British energy major BP has confirmed that it was facing a US investigation over whether the group had manipulated crude oil and motor fuel markets.
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(InfoWorld) - In one telling moment during the recent Congressional hearings onÂ the Hewlett-Packard Co. board scandal, ousted chairman Patricia Dunn offered the "everybody does it" defense. Asked by one legislator about HPâs hiring private investigators who obtained phone records under false pretenses, a practice called pretexting, to identify whoâd leaked confidential information, Dunn replied, "I believe these [pretexting] methods may be quite common at companies around the country." If so, that is chilling to business ethicist Kirk Hanson. "As an ethicist Iâm horrified that HPâs managers relied on the assertion that it was borderline, but legal, and never asked whether it was ethical," says Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University, in Santa Clara, California. If HP adopted what Hanson called "black ops" as standard investigative practices, he wonders how many other companies have done it. HP, some of its employees and companies it hired to investigate boardroom leaks to news media still face potential civil and criminal liability for their actions. Other companies find themselves in a dilemma over how to control information within the law. Companies may have a moral or legal responsibility to respect peopleâs privacy, but they also have a legal and fiduciary responsibility to protect confidential business information. And under the federalÂ Sarbanes-Oxley ActÂ in effect the last four years, they have obligations to investigate certain leaks, Hanson says. Companies have a right to investigate their own employees if theyâre suspected of leaking information. Employees should presume no right to privacy in their use of company computers, e-mail programs or telephones. One commonly used tactic to probe security breaches doesnât even involve electronic snooping. Companies exclusively give suspected leakers seemingly important but relatively benign information. If it turns up in the media, the company has identified the leaker. But Hanson sees a bright line separating how a company can investigate its own employees and how it can investigate outsiders. The HP reaction to leaks to reporters contrasts with the recent practice of Apple Computer Inc. when proprietary information got out. Although Apple is known for its devotion to secrecy, it went to court rather than to private eyes when confidential information leaked in 2004. Apple, of Cupertino, California, sued in state court to force two Web sites to reveal sources for stories they posted about a possible new Apple product. A state appellate court ruled May 26 that the writers on those Web sites enjoy the same First Amendment rights as mainstream journalists and, thus, were protected by Californiaâs shield law from having to reveal their sources. Apple dropped the case. It did not reply to a request for comment on this story. The Sarbanes-Oxley Act requires companies to develop a whistle-blowing reporting system so employees can raise issues about improper behavior within the company, said Hanson. That has prompted companies to develop an investigative capability in the event improper or illegal activity is alleged. "So (under SOX), companies have developed much enhanced investigative capability," he said. Companies also have to keep confidential information safe because disclosure could be a criminal act or a breach of fiduciary responsibility, said Rob Enderle, senior analyst at Enderle Group, a technology market research firm. If word leaks that a board is contemplating an acquisition, for instance, the company or people in it could be prosecuted for insider trading if people used that knowledge to make stock trades. Given the potential liabilities, corporate investigations of leaks are "common," said Enderle. "The stuff with the pretexting goes to the extreme, but looking at company phone records or e-mails, that is very common. Hiring an outside contractor is also common." In fact, leak investigations enjoy broad support among corporate directors. In a September telephone survey of 226 board members at publicly traded companies in the U.S., 73 percent said a company's chairman should be empowered to use any legally available means to identify a board-level leaker, according to Ponemon Institute LLC. About 71 percent of the respondents said it would be okay for a board chairman to review the e-mail messages of other members, in addition to other types of confidential data stored on company computers. Fifty percent said that reviewing telephone records of individuals obtained via pretexting is proper as long as that approach hasn't been outlawed. But HPâs tactics of tailing reporters, attempting to install a tracer on a reporterâs e-mail program, pretexting numbers of people outside the company and even considering planting spies in newsrooms as janitors or clerical workers is "bizarre" to Rick Belluzzo. "The reaction by HP was totally out of proportion with the situation," said Belluzzo, chairman and CEO of Quantum Corp., a network storage equipment maker. His rÃ©sumÃ© includes president of Microsoft Corp. and a 23-year stint at HP, where he rose to the position of executive vice president of its computer division. While he understands the importance of keeping certain information confidential and making employees and directors sign confidentiality agreements, HP overreacted to information leaks that are sometimes going to happen anyway. "Itâs an impossible task to control information flow. Some leaks are inevitable," Belluzzo said.
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Doubts over charges against a US firm underscore concerns about the legal system and foreign investment.
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By Stephen Foley in New York  Hewlett-Packard is facing a federal investigation into whether the company broke the law when the computer manufacturer obtained directors' and journalists' phone records as part of its attempt to hunt down the source of boardroom leaks.
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Ousted Hewlett-Packard chairwoman Patricia Dunn is expected to be indicted Wednesday in California on charges related toÂ the spying scandal that has hit the company, the New York Times reports.
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The California attorney general expects to file charges against people at Hewlett-Packard Co and other companies in relation to the 'pretexting' scandal at HP, in which HP paid investigators who hacked the phone records of its directors and several journalists.
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California's attorney general  filed a criminal complaint on Wednesday seeking indictments of  former Hewlett-Packard Co.  Chairman Patricia Dunn and  four others for their roles in a probe into board leaks.
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UK defence firm BAE Systems is the subject of an anti-corruption probe by the US Department of Justice.
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INVESTIGATORS plan to probe a private detective agency linked with Hewlett-Packard as the spying scandal deepens at the computer giant.
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Patricia C. Dunn, the former chairwoman of Hewlett-Packard, and four other people will be named in indictments expected to be filed by CaliforniaÂs attorney general today in the spying case at the company, according to lawyers involved in the case.