Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

NYT: Spying was dirtier, earlier, broader than HP has admitted

Posted by Richard Koman - September 17, 2006

By Richard Koman for SiliconValleyWatcher

New revelations in the HP scandal from the Times:

  • The hunt for the leaker started in January 2005, when word of Carly Fiorina's ouster hit the press.
  • HP relied in part for its evaluation of the program's legality on a law firm that shares a phone number with Security Outsourcing Solutions, the Boston firm that supplied many of the detectives working on the project.
  • News.com's Dawn Kawamoto may have been physically followed.
  • HP spied on its director of corporate media relations, Michael Moeller.
  • Detectives tried to track News.com reporters actions by sending a bogus document that included a program that would report back to detectives whom the reporters forwarded the document to. It didn't work.

The Times is starting to put things in a timeline:

Within 60 days [of stories about Fiorina's ouster], the investigation into the leaks was up and running, according to those briefed on the company review. Responsibility for the investigation was delegated to the company’s global investigations unit, based in the Boston area. Those company officials turned the effort over to Security Outsourcing Solutions, a two-person agency that hires specialists for investigations.

That firm hired Action Research Group, an investigative firm in Melbourne, Fla. The actual work of obtaining the phone records was given to other subcontractors, one of which is said to have worked in or near Omaha. The methods were said to have included the use of subterfuge, a practice known as pretexting, in which investigators pose as those whose records they are seeking.

Previous accounts of the Hewlett-Packard operation have focused on the use of such methods in the 2006 phase of the investigation, but not in its earlier phase.

Revelations that HP legal went to SOS's law firm really suggest that HP general counsel Ann O. Baskins was aware the program was on shaky ground and didn't want to hear otherwise.

At at least one point, the company’s lawyers sought a legal opinion. But it did not come from Hewlett-Packard’s own outside counsel, Larry W. Sonsini of Wilson Sonsini Goodrich & Rosati, an eminent Silicon Valley law firm.



Instead, the company asked one of its contractors, Security Outsourcing Solutions, which turned to a Boston lawyer, John Kiernan of Bonner Kiernan Trebach & Crociata, for the opinion. Mr. Kiernan’s office shares a Boston address and phone number with Security Outsourcing Solutions.

Recall Larry Sonsini's statements that:

"I was not involved involved in the design or conduct of the investigation. The investigation was run by the HP legal department with outside experts. I reviewed the report after the investigation for Board process. Pattie was not involved in the design or conduct of the investigation either, to my knowledge. I am sure that Ann Baskins looked into the legality of every step of the inquiry and was satisfied that it was conducted properly."

The Times report suggests that the "outside experts" was John Kiernan and that Baskins' research into the legality consisted of talking to Kiernan.

There are many more shoes to drop in the sordid affair. California AG Bill Lockyer has said he expects to file charges. The SEC is investigating violations of reporting duties. A lawsuit has been filed against the officers. Dunn, Baskins and Sonsini have been called to the Hill Sept. 28. While it's unlikely they will say anything at that hearing, the House also subpoenaed many documents, which were due today. Presumably HP's lawyers aren't anxious to add contempt of Congress to their potential rap sheets.

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