Ousted H-P boss charged

Calif. files criminal counts against Dunn, Jefferson County man

Jeff Smith, Rocky Mountain News

Published October 5, 2006 at midnight

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California regulators on Wednesday filed criminal charges against Hewlett-Packard Co.'s ousted chairwoman, Patricia Dunn, Jefferson County phone record broker Bryan Wagner and three others involved in the corporate spying fiasco.

Documents supporting a warrant for Wagner's arrest allege he was a central figure in using pretext or deception to access the private telephone records of a number of H-P directors and news reporters.

"I was wondering when you guys would show up," Wagner is quoted as saying when a California Bureau of Investigation special agent turned up at his door Sept. 21. The special agent said Wagner told him he destroyed his computer because it had incriminating evidence on it.

A felony arrest warrant was issued for Wagner.

Also charged were former H-P chief ethics officer Kevin Hunsaker, private investigator Ronald DeLia and Matthew DePante of the Florida investigative firm Action Research Group. Wagner allegedly worked for Action Research.

Each faces felony charges of false or fraudulent pretense to obtain confidential information from a public utility, unauthorized access to computer data, identity theft and conspiracy. Each of the four charges carries a fine of up to $10,000 and three years in prison.

Colorado information security consultant Rob Douglas said the fact that those targeted by the California attorney general's office range include the corporate chairwoman down to Wagner "sends an important signal to all the participants in these types of crimes."

But Wagner's uncle, James Rapp, of Parker, who taught his nephew the ropes of the business in the 1990s, told the Rocky Mountain News on Wednesday that law enforcement officials aren't solving the problem by going after the little guys.

"The point is that it starts at the top (of a company) when they want to know something and then they have to (hire) the private investigator," Rapp said. "I understand that a lot of people don't like the invasion of privacy, but Bryan wasn't hurting anybody. I just feel bad for him, I feel he's a pawn in this."

When reached by phone, Wagner declined to comment. But Rapp said his 29-year-old nephew "is really having a hard time."

The H-P scandal came to light last month when the company disclosed that detectives it had hired to sniff out boardroom leaks to the media had obtained the private phone records of directors, employees and journalists. In all, the records of seven directors, two employees and nine journalists were examined.

Wagner invoked the Fifth Amendment against self-incrimination at a congressional hearing last week, after being asked about three e-mails that linked him to supplying the private phone and fax records of then H-P Director George Keyworth II and his wife. Keyworth was found to be the source of the boardroom leaks and recently resigned from the H-P board.

According to the documents released by the California attorney general's office Wednesday, Wagner obtained private phone records in part by tricking AT&T customer service people to establish and access phone accounts online.

AT&T was able to track about 200 calls made to its 800 number in 2005 and early 2006 to a telephone number in the Omaha area, where Wagner once resided. Qwest Communications, after receiving a search warrant from California, identified the subscriber on the account as Wagner. Wagner's Internet account was similarly identified by Cox Communications.

Wagner told the California special agent that Rapp was the one who told him that The New York Times had determined that a connection to both Action Research and Omaha had been found.

Wagner said the information confirmed his suspicion that he was doing the phone record work for H-P. While he stated to the special agent that he didn't believe he was breaking the law by pretexting, he said he decided to destroy all the evidence after talking to Rapp and reading the article in the Times.

Rapp said in an interview with the News last week that he didn't suggest to Wagner that he destroy his computer. "I talked to him and said, 'You better be careful with what you have.' I never used the word destroy. "

Rapp pleaded guilty in 1999 to racketeering charges in connection with selling confidential information. He maintains he now is out of the business.

All of those charged Wednesday in California took the Fifth at last week's congressional hearings, with the exception of Dunn. Although she answered questions under oath, many criticized her for not taking personal responsibility.

At a news conference, California Attorney General Bill Lockyer noted California has some of the strictest privacy laws in the country and it's crucial that those who break them are prosecuted.

"One of our state's most venerable institutions lost its way as its board sought to find out who leaked confidential company information to the press," Lockyer said, vowing to hold those who broke the law accountable.

U.S. Rep. Diana DeGette, D-Denver, and a member of the House Energy and Commerce Committee, said she welcomed the charges.

"One of the goals of having Hewlett-Packard officials testify before the committee last week was to shed light on these types of sleazy practices," DeGette said in a statement. "Those hearings should serve as a warning to other corporations that this type of misbehavior will not be tolerated, and these pending indictments will reinforce that message."

DeGette added that she was "struck by Patricia Dunn's lack of culpability in her admission that she had authorized these operations . . . and now it appears she might be forced to take responsibility for them before the courts."

H-P Chief Executive Mark Hurd wasn't among those charged. Nor was H-P's former general counsel Ann Baskins, who oversaw some of H-P's investigation. Baskins also took the Fifth at the congressional hearing. Hurd testified and apologized for the company's actions.

Even before the H-P scandal, Colorado had been identified as a hub for data brokers using pretext or deception to obtain private phone records. Experts say Colorado is a hub for such activity in part because it is one of only a handful of states that doesn't regulate private investigators. The Colorado legislature this year passed legislation banning the sale of cell phone records, but no action has been taken.

Case against the suspects

California's attorney general filed criminal charges Wednesday against former Hewlett-Packard Chairwoman Patricia Dunn, a Jefferson County man and three others involved in the corporate spying scandal.

The charges

• Each is charged with four felony counts, including use of false pretenses to obtain confidential information, and conspiracy. Each charge carries a fine of up to $10,000 and three years in prison.

The back story

• To try to root out media leaks, H-P hired detectives who secretly obtained detailed phone logs of directors, employees and journalists. The detectives used a potentially criminal form of subterfuge known as pretexting.

The Associated Press contributed to this report.

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