HP embroiled in pretexting controversy

By Matt Whipp

Posted on 8 Sep 2006 at 17:54

Hewlett-Packard has been embroiled in the legally dubious practice of pretexting as an investigation into an internal leak spiralled out of control, touching a number of journalists, as well as senior HP execs.

The fracas began in the aftermath of a CNet article published at the beginning of the year that quoted an internal source revealing a detailed account of HP's long-term strategy, which emerged from several days of intense discussion between HP chiefs.

HP chairman Patricia Dunn was spurred into launching an investigation in order to determine the source of the leak, employing a third-party company to carry this out.

According to an SEC filing posted by the company, the issue of internal leaks had been frustrating HP for some time: it employed the investigating company to conduct 'interviews of directors in early 2005 in order to determine the source of the leaks'.

However, the filing also revealed that the investigating firm subsequently 'had retained another party to obtain phone information concerning certain calls between HP directors and individuals outside of HP'.

The method used to accomplish this was the practice of 'pretexting' - essentially assuming the identity of an individual you wish to obtain information on. Where this is used to obtain financial information the practice is illegal in the US under the Gramm-Leach-Bliley Act.

On Tuesday, the California attorney general's office contacted CNet to inform the company that two of the individuals whose phone records had been accessed were its own reporters, which network operator AT&T later confirmed.

HP has said that information on up to nine journalists, including a Wall Street Journal reporter, had been accessed.

The source of the leak was discovered to be one of HP's directors Dr. George A. Keyworth II who, while refusing to resign, will not be re-elected to the board.

A worried HP hired an outside firm to review the legality of the investigation after another director Thomas J. Perkins resigned over the methods used. This firm concluded, reads the SEC filing, that 'the use of pretexting at the time of the investigation was not generally unlawful (except with respect to financial institutions), but such counsel could not confirm that the techniques employed by the outside consulting firm and the party retained by that firm complied in all respects with applicable law.'

HP said in a statement: 'HP believes that persons at all levels of the company - directors, officers and employees - must be held accountable and have the highest personal integrity. As one of the largest technology companies in the world, HP is in a state of transition - both within the company and at the board level. Some of the changes have been painful and difficult. We have changed the culture of the company to one that is driven by accountability and meeting the needs of the customer. At the same time, the board is shifting from one that is personality driven to one that is process driven.'