Hewlett-Packard wants to be the tech-company of the future and, unfortunately, that goal may be coming a reality in a way they never planned. Instead of becoming a shining star of new technologies, the company has been plagued by an association with a darker kind of future—a sort of Max Headroom, Robocop-style dystopian future where corporations employ spies to steal confidential, personal and corporate information about competitors, employees and reporters.
The pretexting scandal that led to the departure of the chairman of Hewlett Packard’s board of directors, resignations by senior executives, humiliating public hearings on Capitol Hill and a lawsuit brought by the state of California is by now well known. (A recap: H-P apparently engaged private detectives—to snoop into alleged leaks to the press that seemed to come from board members—who used false pretenses to obtain the phone records of board members and reporters, possibly breaking the law in the process.) This morning, however, Fortune writer Nicholas Varchaver, breaks the news that Hewlett-Packard’s spying may have started long before that famous episode. And, disturbingly, his reporting suggests that the pretexting that made headlines last year might not be the anomaly Hewlett-Packard chief executive Mark Hurd claimed it was.
[After the jump, the nasty lawsuit and the new claims of possible pretexting.)
The story starts where so many corporate scandals begin—a business failure. Way back in 2004, Hewlett-Packard announced it would make a run at the flat-panel television business. The announcement came directly from then-CEO Carly Fiorina, who told a consumer electronics conference that her company was poised to give the American living room a “digital make-over.” You only need to look around your living room for a Hewlett-Packard television to know that the company has fallen far short of this goal.
What you may not know is that HP has been locked in a legal battle with the man who urged the move into flat-panel televisions on the company, Karl Kamb. In legal papers, HP describes the former vice-president as a swindler. The law suit includes dozens of allegations—everything from straight forward charges of fraud to more complex racketeering charges (a legal innovation championed as a way of cracking down on the mafia that has now become a common feature of corporate lawsuits). And it gets even nastier. Somehow HP has even dragged in charges of adultery from Kamb’s divorce case.
Kamb fired back, counter-suing the company. The details of his lawsuit were eventually sealed by a judge. But papers filed beforehand included allegations that HP had employed spies to gain information on a competitor and used pre-texting to look at Kamb’s phone records. HP has, of course, denied the allegations but after an exhaustive investigation into the case, Fortune claims that “the evidence at hand suggests that HP's tactics in its 2006 leak investigation may not have been such an aberration after all.”
Fortune warns that because so many of those involved are under a gag-order or hesitant to speak on record, many of the facts about the case are simply unknown. But it's review of available documents and interviews has turned up a treasure-trove of previously unreported facts, including allegations that the company violated its own rules to spy on Dell and may have used pretexting against Kamb.
The evidence, however, suggests that HP did get Kamb's phone records without his consent. Hunsaker seemed to endorse that view in an interview with HP's law firm Wilson Sonsini, which conducted an investigation of HP's leak probe in August 2006 at the company's request: "Hunsaker first learned that HP had used pretexting to obtain phone records in July 2005 in connection with an unrelated HP investigation. One of the subjects of the investigation was going through a messy divorce, and his attorney contacted Hunsaker, claiming that HP had attempted to change his PIN in order to access his voicemail. Hunsaker's team told him they had not altered the subject's PIN or voicemail, but had used pretexting to obtain phone information about the subject." Those circumstances seem to describe Kamb's situation. (Hunsaker's lawyer Michael Pancer vehemently asserts that his client was misquoted and insists that no other documents support the allegation. Wilson Sonsini declined to comment.)
But California state investigators recently found an invoice billed to "Ron" at "SOS" - Ronald DeLia of Security Outsourcing Solutions, a private investigator who was involved in pretexting for HP in the boardroom leak case - requesting Kamb's address (though not his phone number). Taken along with a phone-company log that indicates a request for Kamb's records was made, a law-enforcement official says, "The circumstantial evidence is very strong."
A pretext for revenge [Fortune via CNNMoney.com]