Congress challenges HP heads' practices

0 Comments | Oakland Tribune, Sep 29, 2006 | by Pete Carey

WASHINGTON -- Hewlett- Packard's top current and former managers faced incredulous members of a congressional investigative committee Thursday who compared their boardroom leak investigation to everything from the Watergate plumbers to the Keystone Kops.

The executives were on hand to explain to the House Energy and Commerce subcommittee how HP came to use questionable methods, including the use of deception to obtain private telephone-call records, in an investigation tracing boardroom leaks to news media.

Committee members expressed disbelief that nobody at HP's top level stepped forward to say the practice, legal or not, was unethical and should be stopped.

Rep. John Dingell, D-Mich., called the HP actions "a plumbers' operation that would make Richard Nixon blush, were he still alive," referring to the 1970s Watergate break-in scandal that brought down the Nixon presidency.

"The cure, in this case, appears to have been far worse than the disease, and now posesa far greater threat to Hewlett-Packard," Dingell said.

Since HP disclosed this month it had hired outside investigators who used pretexting to trace boardroom leaks to reporters, the company has faced a public furor that resulted in the resignation of its board chairwoman, Patricia Dunn, last Friday. The disclosure has triggered two criminal investigations and the congressional hearing Thursday.

Rep. Ed Markey, D-Mass., compared HP's explanations to those of Sgt. Schultz of the old TV comedy "Hogan's Heroes" "in that some in a position of authority may now be saying, 'I heard nothing, I saw nothing, I knew nothing,'" Markey said. "That is their defense. It is not believable."

The scandal presents a "case-book example of exactly how not to operate as a corporate board," said Rep. Tammy Baldwin, D-Wis. "Bickering and division among Hewlett-Packard board members created an atmosphere of tension and distrust."

"This is obviously for the people in my congressional district, and thousands of HP employees, a sad day for us," said committee member Anna Eshoo, D-Palo Alto. "Deeply troubling things have taken place."

Dunn was grilled by most committee members. She explained that the investigation was launched after a failed attempt by outside counsel Larry Sonsini to identify the leaker. At that point, seven of the nine HP board members individually approached Dunn to urge an investigation. One of the two who did not was George Keyworth, the board member who was eventually identified as the source of a story by a CNet reporter that helped trigger the probe.

"If seven of the nine wanted this investigation, I would start with the two who didn't want it," observed Rep. Joe Barton, R- Texas.

Dunn was questioned again and again about whether she knew HP investigators were going to use deceptive techniques.

"It is my sworn testimony that until July 2006 I was unaware that the fraudulent misuse of identity was a standard arsenal" in the company's investigations, she said.

"Mr. DeLia said he has no doubt" that Dunn was told about the pretexting, Rep.Greg Walden, R-Oregon, responded. Ronald DeLia is a Boston-area private investigator who worked on HP's boardroom-leak investigation.

"I wish he were here so we could talk about it," Dunn said. "I had no reason to think anything illegal was going on. There were batteries of experts" who reassured her everything was legal.

"And some of those batteries of experts are now looking for work," said Walden.

"And I'm one of them," Dunn retorted.

Shortly before the hearing opened, Hewlett-Packard's top lawyer, General Counsel Ann O. Baskins, resigned and told the congressional subcommittee that she would invoke her Fifth Amendment privilege and decline to testify at the hearing.

Baskins said in a letter hand delivered to the committee that she believed that the company's use of deception to obtain private phone records during its investigation was legal.

The deception -- called "pretexting" -- had investigators impersonating HP board members, employees, reporters and others to obtain their private phone records without their knowledge.

She also submitted several documents, including a memo of an interview conducted by HP's outside law firm, Wilson Sonsini, of former HP lawyer Kevin Hunsaker. In that memo, the lawyers reported that Hunsaker told them HP had used pretexting in other, unrelated investigations, including one involving a subject who was going through a "messy" divorce.

The subcommittee hearing revealed at least one HP investigator tried to sound an alarm about the company's use of pretexting to obtain phone records but apparently got nowhere.

A document released by the subcommittee showed that a member of the investigative team, Vince Nye, sounded a warning in a Feb. 7 e- mail to HP security manager Anthony Gentilucci.

"I have serious reservations about what we are doing," Nye wrote in the e-mail. "As I understand Ron's methodology in obtaining this phone record information it leaves me with the opinion that it is very unethical at the least and probably illegal. If it is not totally illegal, then it is leaving HP in a position that could damage our reputation or worse."