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CA AG on HP: I have enough to prosecute - Updated - Reactions
Tuesday, September 12 2006 @ 08:50 PM EDT

The San Francisco Chronicle has the news:
In a related development, highlighting the potential legal problems faced by HP, California Attorney General Bill Lockyer's office has enough evidence to indict individuals within HP and in agencies hired by the company for its internal probe.

"I have enough evidence to prosecute people in the firm and on the outside," Lockyer said in an interview.

That implies that the data brokers were not, in his view, acting without authorization or some cooperation from within HP. And he said people, not an individual, within HP. Stay tuned.

Update: The Washington Post has more:

"We currently have sufficient evidence to indict people both within HP as well as contractors on the outside," Lockyer said on PBS's NewsHour with Jim Lehrer.

"Crimes have been committed," Lockyer said. "People's identities being taken falsely is a crime. People gaining access to computer records that have personal information, in California, that's a crime."

Reactions are coming in now, and it's not looking good for HP. Many are expressing that HP pretty much flunked a no-brainer.

A sample:

  • "H-P Shuffle, a Step Back For Corporate Reform," Alan Murray, Wall St. Journal: "In the past week, Ms. Dunn became the scapegoat for H-P's problems. That's not entirely fair. ... She didn't oversee the investigation herself; that was done by the company. Blame falls as much on the doorstep of Chief Executive Mark Hurd and General Counsel Ann Baskins as it does on Ms. Dunn's. Moreover, no one -- not Ms. Dunn, Mr. Hurd, Ms. Baskins or any other director -- seems to have raised serious questions about how investigators managed to obtain private phone records. They all shared a blind spot on that point."

  • Mike Langberg, Mercury News: "Hewlett-Packard and its directors took an ineffective half-step Tuesday toward resolving the spying scandal at Silicon Valley's largest company....It's not enough."

  • Financial Times: "The Hewlett-Packard board has opted for an unsatisfactory fudge....It is not satisfactory. If the incident is important enough for Ms Dunn to step down, it requires a full internal inquiry. She cannot lead that. More importantly, she is not the right person to clean up the mess from an external perspective."

  • Ashlee Vance, The Register: "Over the past eight years, HP has proved a geyser of leaked information to the press. We're talking juicy stuff here - not product details and ink prices but serious boardroom dirt. All HP could muster in the pre-Hurd era to deal with the leaks was a semi-formal investigation that included chit-chats with executives. Post-Hurd, however, we discover a much more aggressive HP - one willing to fund the machinations of two investigative firms. So, did Dunn really snap, as we're told, because of a CNET story stating that HP's directors needed a rest after lengthy meetings or did Hurd snap during week one when he took over as CEO? Was it the new guy that changed HP's investigative protocol or the director that hadn't done too much about leaks in the past?"

  • "HP's blow against corporate trust", Jonathan Weber, Times Online: "Yet what I found most remarkable in the whole thing was not simply the poor judgement of a whole bunch of people who are paid huge sums not to have poor judgement. It's the fact that even in the aftermath, most of these people miss the point: the things you have to do to find the source of a leak are almost inevitably more damaging than the leaks themselves....I'm sure there is a lot at play in the HP situation that we don't know about, but it seems elementary that covert investigations are not going to lead to a restoration of trust in almost any situation. Shame on the leaders of H-P, and all their high-priced lawyers and consultants, for not understanding that simple bit of ethics and common sense."

  • HP's Watergate: common sense and corporate governance didn't compute, Stephen Ellis, The Australian: TO a casual observer, the recent behaviour of Hewlett-Packard's outgoing chairwoman, Patricia Dunn, may look a little like the final days of Richard Nixon's presidency, just as the tactics of investigators she hired to probe board-level leaks to the press resemble Watergate.

    As the scandal of the past few weeks broke, Dunn and HP's others leaders reacted with the reflexive denial of a large corporation with a lot to hide...In the end, there is no defence for Dunn (or other HP directors, or the firm's house lawyers, for that matter) for not wondering and asking, when presented with evidence of leaks based on private phone records, just how those records had been obtained.

  • HP's chair strategy seems a bit wobbly, David Lazarus, SFGate.com: If your kid sets the house on fire, you don't just tell her to stop playing with matches. But business ethicists say that's essentially what Hewlett-Packard told Patricia Dunn on Tuesday when it announced that she'd no longer serve as the company's chairwoman after January but would remain as a board member.

However, Bloomberg reports that Hurd and Dunn made a joint appearance on video at HP, to speak to employees. Dunn apologized, saying she was deeply sorry, and Hurd made the following statement: "This situation is not indicative of how we conduct business at Hewlett-Packard," Hurd said. "This is an anomaly and I commit to you that it will be fixed."

And the LA Times has more detail on the Attorney General Bill Lockyer's remarks, including the news that criminal charges could be filed as early as next week. He's talking about three statutes having been violated, no longer only two:

Lockyer said the deception in the Hewlett-Packard case violated three state laws. One bars obtaining utility records illegally, another bars "unauthorized use of personal identifying information," or identity theft, and the third covers "unauthorized use of data" -- a law more commonly applied to computer hackers.

I took a look at California's Penal Code, and I think this might be the statute he is referring to, California Penal Code Section 538.5:

Every person who transmits or causes to be transmitted by means of wire, radio or television communication any words, sounds, writings, signs, signals, or pictures for the purpose of furthering or executing a scheme or artifice to obtain, from a public utility, confidential, privileged, or proprietary information, trade secrets, trade lists, customer records, billing records, customer credit data, or accounting data by means of false or fraudulent pretenses, representations, personations, or promises is guilty of an offense punishable by imprisonment in the state prison, or by imprisonment in the county jail not exceeding one year.


  


CA AG on HP: I have enough to prosecute - Updated - Reactions | 287 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Within HP, sounds like..
Authored by: ray08 on Tuesday, September 12 2006 @ 09:00 PM EDT
Dunn is really done, as in busting rocks. Maybe the legal counsel for the OK's
handed down? I certainly hope it is a clean sweep of all involved and not just
the peons at the bottom of the pole.

Maybe Dunn won't be an HP director after all.

---
Caldera is toast! And Groklaw is the toaster! (with toast level set to BURN)

[ Reply to This | # ]

Off Topic
Authored by: so23 on Tuesday, September 12 2006 @ 09:09 PM EDT
Please make clinks lickable.

[ Reply to This | # ]

The Corrections Thread
Authored by: TheBlueSkyRanger on Tuesday, September 12 2006 @ 09:28 PM EDT
Hey, everybody!

Got your back....

Dobre utka,
The Blue Sky Ranger

If yu cn rd ths, yu cn gt a gd jb as a cmptr prgrmmr.

[ Reply to This | # ]

CA AG on HP: I have enough to prosecute
Authored by: davogt on Tuesday, September 12 2006 @ 09:47 PM EDT
The number of public statements made by Lockyer is very interesting. Either he's

being advised on PR matters by Darl McBride, or this could actually get even
more interesting for quite some time.

[ Reply to This | # ]

Now Listening To Steve Taylor's "Since I Gave Up Hope, I Feel A Lot Better"
Authored by: TheBlueSkyRanger on Tuesday, September 12 2006 @ 09:49 PM EDT
"Took a class, big fun, Modern Ethics 101
"First day, learned why ethics really don't apply."

Hey, everybody!

You know, if these tech companies want us to obey the laws, they really should
set a better example.

I love that business ethics seem to boil down to, "Stop snitchin'".
Notice they only complain about leaks when it is something they don't want to
get out. If it's something that creates a buzz ("R&D has something big
coming out!") or can negatively impact the competition ("WinFS will be
the fastest file system ever!") or just flat out benefits the company
("Of course, gold contacts are better! Never mind they're only on the
cables and not your tower."), leaks are great, and there is often an
unofficial network to spread them around. You can't have it both ways. Either
all the leaks are okay, or none of them are.

Here's the tin foil hat territory--this can't be the only time this has
happened. How many other companies are stepping on people's rights, they just
haven't been found out yet?

I'm very curious what condition the company is in when everyone is done with it.
The few people I know who play stocks are dumping HP or not buying it. Here's
hoping that no one can hide behind all these layers they've set up. Too bad its
an election year--AG's are going to make sure they carry this through. After
Enron and all, no one wants to be thought of as soft on white collar crime. I
just hope they get the right ones instead of sacrificial lambs.

Dobre utka,
The Blue Sky Ranger

"Save face, nip and tuck, pace yourself and pass the buck
"And don't forget the best advice--everybody's got a price."

[ Reply to This | # ]

Sad day
Authored by: bbaston on Tuesday, September 12 2006 @ 10:05 PM EDT
As a user of the first HP personal calculator, and a guy who grew up believing HP was my kind of company, this is a sad day.

Mr. Hewlett and Mr. Packard are not very happy spirits right now.

First Walt Disney, now Hewlett-Packard. The real things died.

---
IMBW, IANAL2, IMHO, IAVO
imaybewrong, iamnotalawyertoo, inmyhumbleopinion, iamveryold

[ Reply to This | # ]

How much evidence?
Authored by: Newsome on Tuesday, September 12 2006 @ 10:11 PM EDT
"I have enough evidence to prosecute people in the firm and on the outside," Lockyer said in an interview.

How much evidence do you have???:

  • Mountains
  • Enough to go before a jury right now
  • Enough that there is no need for discovery
  • A whole suitcase full of evidence
  • It's ALL evidence

---
Frank Sorenson

[ Reply to This | # ]

It is very very sad
Authored by: Anonymous on Tuesday, September 12 2006 @ 10:35 PM EDT
I like HP/Compaq computers, they are generally very well designed and build. I
buy HP desktops because I can no longer trust Dell.

HP finally got rid of Carly and Capellas is long gone and Hurd was looking
pretty good so I had great hope for Palo Alto.

Now, not only does HP commit a huge ethics violation but they compound it at
every turn -

1) They reward Dunn by leaving her on the board.
2) They destroy oversight by making Hurd chairman.
3) The one truly honorable board member is out and they did not have the decency
to invite him back.
4) They can another board member for doing the honorable thing and keeping the
public informed when the board tries to pull backroom deals.
5) The president of Verizon, the United States largest telephone company
apparently thinks snooping peoples phone records is a peachy keen idea (wonder
whose he reads for light amunsement since he has access to everyone's on the
East Coast including the President) and he sails blissfully on as a director in
this whole fiasco.

This just makes me ver very sad and very very sick of HP.

[ Reply to This | # ]

Opinion from the Register - You're meant to believe that Dunn masterminded this entire operation
Authored by: Brian S. on Tuesday, September 12 2006 @ 11:21 PM EDT

while Hurd stood back as an ignorant bystander. You're also meant to assume that Dunn - and not Hurd - was so furious about media leaks that she - and not he - vowed to clean up HP. Lastly, you're meant to assume that both directors when told that their investigators obtained the phone records of directors and journalists assumed that this had been done legally.

That's a lot to swallow under normal circumstances and even more to gullet down when you look at the timeline of events. Dunn, after all, has been a director at HP since 1998. Over the past eight years, HP has proved a geyser of leaked information to the press. We're talking juicy stuff here - not product details and ink prices but serious boardroom dirt. All HP could muster in the pre-Hurd era to deal with the leaks was a semi-formal investigation that included chit-chats with executives.

Post-Hurd, however, we discover a much more aggressive HP..... The Register


Brian S.

[ Reply to This | # ]

There is a word for this
Authored by: John Smith on Wednesday, September 13 2006 @ 02:57 AM EDT

Data Rape

As a phrase, 'identity theft' does not get close to the sense of violation and intrusion felt by victims.

I think the word data-rape gets closer to the true nature of the crime.

To label identity fraudsters or their corporate employers as data-rapists is almost a disincentive to commit the crime in itself.

John Smith

[ Reply to This | # ]

CA AG on HP: I have enough to prosecute - Updated
Authored by: Anonymous on Wednesday, September 13 2006 @ 05:05 AM EDT
Hold on a sec folks...

When have we heard a claim before that someone "has enough evidence to
prosecute now".... and then see claims in the media that the target company
should just curl up and die...

HP deserve the same "innocent until proven guilty" cover that we gave
IBM when SCOX attacked.. .

Let's not all turn on HP and assume that the claims we see in the press are
true...

- I have no vested interest in hp or the ca ag's office.. I just want to make
sure that there isn't a witch hunt... let's wait until the legal docs are
submitted - and base our reaction on fact..

[ Reply to This | # ]

OH MY LORD, I CAN'T BELIEVE THI-
Authored by: Anonymous on Wednesday, September 13 2006 @ 05:54 AM EDT
No, wait, I mean: why should I care?

Really, isn't this just a story about corporate vultures eating their own?
What's the interest here for me, Joe Developer?

[ Reply to This | # ]

What about the irresponsible journalists??
Authored by: Anonymous on Wednesday, September 13 2006 @ 07:14 AM EDT
You know - the ones who published the confidential information that they had no
business reporting on?

Maybe some people, like PJ, believe that freedom of the press means that
journalists should be able to say and do what they like in the name of a free
press with no repercussions, but I don't agree. I don't believe that is what the
framers of the constitution had in mind.

Is the CA AG going to prosecute those individuals who leaked and published the
data for unauthorized disclosure of private information? Send a couple of
irresponsible journalists to jail and maybe the rest will straighten up and take
the responsibility that goes with the right to free speech seriously.

[ Reply to This | # ]

Where does the Wall Street Journal get their facts?
Authored by: Anonymous on Wednesday, September 13 2006 @ 07:28 AM EDT
Sorry, I have no knowledge of html so I cannot format this quote the way most of
you seem to be able to do:

Alan Murray, Wall St. Journal: "In the past week, Ms. Dunn became the
scapegoat for H-P's problems. That's not entirely fair. ... She didn't oversee
the investigation herself; that was done by the company. Blame falls as much on
the doorstep of Chief Executive Mark Hurd and General Counsel Ann Baskins as it
does on Ms. Dunn's.

Frm every article that I've read so far, Ms. Dunn did, in fact, sneak behind the
backs of Mr. Hurd and the rest of the board and solicited this invetigation
entirely on her own. Where did Mr Murray of The Wall street Journal get his
nformation? Did I miss some news article along the way where someone said that
Ms. Dunn sat back while Mr. Hurd ran this investigation?

[ Reply to This | # ]

What about the rest of us?
Authored by: shiptar on Wednesday, September 13 2006 @ 07:44 AM EDT
Every week, millions of people have their data privacy breached. If HP had
disclosed the financial information of all of their customers, that story would
have barely made the sidebar news links here.

Losing or disclosing the data of millions of people is far more irresponsible
than accessing the data of a few dozen. Yet it's only a crime when it's board
members and journalists. The other millions maybe get a notification and a free
credit report. Talk about Justice.

[ Reply to This | # ]

Big time News -- CA AG on HP: I have enough to prosecute - Updated
Authored by: Anonymous on Wednesday, September 13 2006 @ 09:31 AM EDT
The story is now on the network TV and Radio news. Though I kind of don't
think of this as news anymore, since I've known about it since PJ posted it
Wednesday, September 06 2006 @ 03:35 PM EDT

[ Reply to This | # ]

Pretexting vs. Social Engineering
Authored by: Anonymous on Wednesday, September 13 2006 @ 10:13 AM EDT
Hi folks, I'm hoping someone can shed some light on what differences there are
between pretexting and social engineering.

I'd never heard of pretexting before this story broke, but I was familar with
social engineering, having attended the social engineering panel at HOPE this
year.

It almost seems like the difference between hacker & cracker.
Thanks!

[ Reply to This | # ]

Umm... Why do we care?
Authored by: DMF on Wednesday, September 13 2006 @ 10:53 AM EDT
PJ, why are you spending your precious resources on this little mix-up? Are the
various SCO and Microsoft troubles in that much of a lull? Is there something
unique about this case that commands our attention? (If there is I don't see
it.)

Groklaw coverage might be justified if a) it wasn't receiving main-stream press
coverage (it is), or b) there were some interesting litigation involved (there's
not).

So what's the deal?

[ Reply to This | # ]

Additional Statute
Authored by: rsteinmetz70112 on Wednesday, September 13 2006 @ 10:59 AM EDT
The additional statute PJ quoted above in the update seems to have more teeth
than the ones previously mentioned and is much more on point. It seems clearly
to have been violated.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

I have a question.
Authored by: rsteinmetz70112 on Wednesday, September 13 2006 @ 01:42 PM EDT
One question I have is "Is there a legal way for a non governmental parties
to obtain telephone or other confidential records?"

A search warrant is not an option for privite entities, I think, although a
search warrant can be secret.

I don't think a subpoena can be secret and probably requires some sort of legal
action before one can be issued, creating a chicken egg paradox.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

There you go again...
Authored by: Anonymous on Wednesday, September 13 2006 @ 03:59 PM EDT
Your entire moral outrage seems to be built on the very shaky foundation that a
corporation is legally a person. First off, this is a legal principal, not a
moral one, so calling the reporter's actions wrong or immoral because they did
not respect a corporation's "privacy" is just rubbish. While
publishing a natural person's private information would indeed be immoral and
wrong, the same just does not apply to a corporation. Legally, a corporation
does NOT have the same rights and responsibilities as a natural person - they
cannot usually vote, become citizens or serve on a jury, for instance. Laws may
or may not apply equally to corporations, and this can vary with jurisdiction.
Next, note that the nature of the "private information" is very
different. If you truly believe that board discussions are even close to
equivalent to private addresses, you are desperately in need of a new moral
compass - your current one is irredemably broken.

I cannot comment on whether any Californian statute has been broken by the
journalists involved (though I very much doubt that it has - the publishers have
lawyers who, I don't doubt, take such matters very seriously). I would need to
have a fair knowledge of Californian law to do so and I ahve no such knowledge.
But, unless I am much mistaken, neither do you and absent such specialized
knowledge your persistant insistance on a position that is at best speculative
and in reality highly dubious (asserting a complete legal and moral equivalence
between individuals and corporations) is more than a little tiresome.

[ Reply to This | # ]

Ethical Oversight
Authored by: rsteinmetz70112 on Wednesday, September 13 2006 @ 05:07 PM EDT
I wonder to what extent someone is responsible for the unethical, illegal
conduct of those they hire. At some level they are.

At another level if I hire an qualified and reputable company to perform service
for me, how much oversight should be necessary. Shouldn't not breaking the law
be part of their responsibilities?

If I hire a contractor to demolish a building, shouldn't I be able to rely on
them doing it legally?

If I hire a lawyer to represent me shouldn't I be able to rely on the lawyer not
to suborn perjury, tamper with the jury or withhold evidence?

I never tell my employees not to break the law, I just expect that they won't.

If I tell someone to do every thing they can to accomplish a task, I expect what
they can't do to begin at least at unethical conduct and well before illegal
acts.

Do I need to spell it out?

It's really sad we have gotten to the point where you have to tell someone not
to break the law.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

It made the UK national TV news.
Authored by: Anonymous on Wednesday, September 13 2006 @ 06:41 PM EDT
Unusually for a US tech story, this little tale made the BBC main evening TV
news here in the UK - it's not going away in a hurry. Sadly the spin that Dunn
had "resigned" seemed to be accepted as some sort of improvement.

biteydog

[ Reply to This | # ]

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