HP's newest board member a pretexting veteran
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Been there, seen that HP's freshest board member Ken Thompson won't need to take the company's Pretexting 101 course offering. As Wachovia's CEO, Thompson has become well acquainted with the legal concerns surrounding phone record fraud.â¦
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Piling it on HP today released a message from CEO Mark Hurd that vaguely addresses the company's ongoing spy scandal. The missive serves more as an advertisement than a real confrontation with the issues affecting HP.â¦
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HP's boardroom scandal has cast a new light on the dirty deeds of data traffickers. James Rapp used to be one of them.
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New reports implicate HP chief more deeply than previously thought.
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A U.S. government panel has asked a corporate ethics lawyer from Hewlett-Packard (HP) to testify in its Sept. 28 hearing onÂ the company's use of "pretexting"Â to spy on journalists, board members and other employees.
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(InfoWorld) - The attorney for ousted Hewlett-Packard chairman Patricia Dunn fired back Wednesday at public comments made by board rival Thomas Perkins about theÂ HP pretexting scandal. "Mr. Perkins...has made the biggest mistake of his career. He is a bully, and he is bullying the wrong people," said James Brosnahan, attorney for Dunn, in a statement in response to what Brosnahan called a "gratuitous attack" on his client in a speech Perkins gave Tuesday in San Francisco. In an appearance at the VentureOne Outlook Conference, a gathering of venture capitalists, Perkins said the HP dispute about how to control leaks of board deliberations to the media was really a fight for control of the board, which Dunn won, according to media reports of his speech. Perkins also lamented that many corporate boards, including HP's, have turned from being "guidance" boards into "compliance" boards. Rather than advising the company on how to run its business as a "guidance" style director, "compliance" directors are increasingly focused on maintaining compliance with U.S. Securities and Exchange Commission regulations governing publicly traded companies. He described Dunn as a compliance-style director, according to the reports. Dunn was indicted in October 2006 on four felony counts in California state court for authorizing an investigation into HP board member leaks to the media. Investigators hired by HP allegedly used false pretenses, or "pretexting," to get phone companies to divulge calling records for people they were investigating. A former legal counsel for HP and two private detectives hired by HP are also facing trial. The scandal broke in September 2006 because Perkins demanded the company publicly state, in an SEC filing, why he quit the board four months earlier. Because the state case is still awaiting trial, Dunn can't directly respond to Perkins' remarks, but her attorney had plenty to say. "Mr. Perkins generated an attack on Patricia Dunn, hired lawyers, hired a public relations firm, and all because his colleague on the Hewlett-Packard board [Jay Keyworth] was found to be leaking information. Now he is attempting to further prejudice the public against Patricia Dunn," Brosnahan wrote. Perkins quit the board when Keyworth was outed as the director who leaked information to the media. In his statement, Brosnahan said Perkins is likely to be called as a witness in Dunn's trial. He also accused Perkins of publicly criticizing Dunn to draw attention to Perkins' soon-to-be-published book, which is expected to touch on the pretexting scandal. A call to Perkins' office was not immediately returned.
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Hewlett-Packard Co.'s CEO, Mark Hurd, followed the company's former board chairman on the hot seat when he testified before a contentious House subcommittee looking into the boardroom leak scandal.
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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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(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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By RACHEL KONRAD  SAN FRANCISCO - Hewlett-Packard Co.'s board will file a statement with the Securities and Exchange Commission, notifying investors that the computer maker's board will refuse to nominate one director for re-election because he leaked confidential information to the media.
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By Ian Watson  THE scandal that has erupted following the disclosure that Hewlett-Packard had been spying on some of its directors now appears to have  enveloped chief executive Mark Hurd.
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(InfoWorld) - Patricia Dunn, Hewlett-Packard's embattled chairman, will be relieved of those duties after the board's Jan. 18, 2007, meeting, but will continue as a director. The announcement came Tuesday morning, followingÂ meetings of the boardÂ over the weekend and Monday. Mark Hurd, HP's chief executive officer and president will also take on the chairman's job. Richard Hackborn, who has been on the board since 1992, has been chosen as the lead independent director as of January. Dunn has been under intense pressure to step down as chairman after it came to light last week that the board of directorsÂ carried out an investigationÂ to determine who among the board leaked confidential information to journalists. The board admitted in a filing with the U.S. Securities and Exchange Commission (SEC) that the internal probe involved "pretexting," where employees of an investigative firm hired by the company pretended to be reporters to gain access to their telephone records. Federal authorities, including the U.S. Department of Justice and a congressional committee,Â are questioning the board's conductÂ in the probe and the California attorney general has said thatÂ charges are likely to be filed. "The recent events that have taken place follow an important investigation that was required after the board sought to resolve the persistent disclosure of confidential information from within its ranks. These leaks had the potential to affect not only the stock price of HP but also that of other publicly traded companies," Dunn said in a written statement released by HP. "Unfortunately, the investigation, which was conducted by third parties, included certainÂ inappropriate techniques. These went beyond what we understood them to be, and I apologize that they were employed." Dunn pledged to take action to make sure that such "inappropriate investigative techniques" do not happen again. "They have no place in HP," she said in the statement.
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SAN FRANCISCO -- Investigators for Hewlett-Packard Co. sought private telephone records of board members while trying to figure out which director leaked confidential company information to the media, the computer maker disclosed in a regulatory filing Wednesday.
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PALO ALTO, California  - Hewlett-Packard Co.   HPQ.N Chief Executive Officer Mark Hurd said he had approved   an e-mail ruse to track down boardroom leaks, admitting for the   first time his involvement in a scandal that also on Friday   forced out the company's chairman.
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In a filing with the Securities and Exchange Commission, Hewlett-Packard has revealed a history of leaked confidential information as well as details about how a board member quit over the investigations into those leaks.
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Hewlett-Packard Co. yesterday said a Needham private investigator assured the computer maker its investigative methods were legal, then apparently used ``pretexting," or lying, to obtain phone and fax records of 18 company board members, employees, and journalists.
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Hewlett-Packard Co. announced this morning that its chairman, Patricia C. Dunn, will step down in January, amid accusations that she enabled or condoned potentially illegal spying on other board members in attempting to root out the source of leaks to the media.