California AG Starts Hewlett-Packard Investigation

If the uproar at Hewlett-Packard were a Hollywood screenplay, the critics would claim it was too contrived to be plausible. However, the leaks of boardroom discussions and the board’s investigation of the leaks have resulting in a scandal over impersonations to acquire phone records and the resignation of a director. The California Attorney General is now investigating what he calls HP’s “obviously colossally stupid” actions.

The leaks started before the departure of former Chairwoman Carly Fiorina in February 2005, which she tried unsuccessfully to halt. Her successor, Patricia Dunn, hired investigators to find out who on the board was leaking. It transpires that the leaker was George A. Keyworth II, whom other board members demanded resign. He said he wouldn’t since he was elected by the shareholders. His buddy and fellow board member Thomas J. Perkins, a Silicon Valley venture capitalist, did quit in protest at the board’s behavior.

According to HP’s SEC filing on Wednesday, after he resigned Mr. Perkins “sought information from HP concerning the methods used to conduct HP’s investigations into the leaks, asserted that phone and e-mail communications had been improperly recorded as part of the investigation, and informed HP that he had recently consulted with counsel regarding that assertion. In response to Mr. Perkins’ request, HP informed Mr. Perkins that no recording or eavesdropping had occurred, but that some form of ‘pretexting’ for phone record information, a technique used by investigators to obtain information by disguising their identity, had been used.”

“Pretexting,” of course, is not only a non-word, it’s a sleazy practice. HP’s lawyers said that pretexting is “not generally unlawful,” but they wouldn’t go so far as to say the hired investigator’s actions “complied in all respects with applicable law.” The California AG is particularly interested in the internet customer who used the last four digits of Mr. Perkins’ social security number and his home phone number to open an online account for paying bills. This would provide access to a lot of other information.

Needless to say, HP is now trying to ensure Mr. Keyworth is not re-elected to the board. However, the real issue is just what the heck the board thought it was doing. In a case like this, the chair merely says “please hand over all your phone records.” Anyone failing to do so is bounced off the board. HP, in the words of Mr. Perkins, “needs, urgently, to correct its course.”

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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