Mining of records 'fairly common'

Jeff Smith, Rocky Mountain News

Published September 8, 2006 at midnight

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Hewlett-Packard Co.'s mining of the home phone records of its directors isn't an isolated incident in the corporate world.

"Obtaining phone information of corporate employees (suspected of spilling secrets) is fairly common," said Rob Douglas, a Colorado security consultant. He has helped authorities investigate those who obtain phone records through pretext, or posing as another person. But most corporate cases don't surface publicly, he said.

James Rapp, of Parker, and David Gandal, of Loveland, information brokers who testified in front of Congress on the issue this year, tell the same story.

"It happens when somebody wants it to happen," said Gandal.

Gandal said he no longer gets the information through pretext, and Rapp said he's left the business.

California Attorney General Bill Lockyer told reporters Thursday that the state could charge H-P with criminal or civil violations. At the least, he said H-P was "colossally stupid," and he told Bloomberg News that "it appears that a crime has been committed."

California law bans disguising one's identity to obtain personal records. But Lockyer said the H-P investigation is in its early stages and it is "unclear exactly who is liable and how severe it is."

Reports emerged Thursday that H-P also may have obtained the phone records of some reporters.

H-P Chairwoman Patricia Dunn reportedly launched the investigation to find out which director - now identified as George Keyworth - had been leaking confidential information to the media.

In a regulatory filing this week, H-P said it hired an outside consulting firm to conduct the investigation, which in turn retained a third party to obtain the phone records.

H-P maintained the outside consulting firm had been instructed to investigate lawfully. While acknowledging that pretexting had been used in some cases, H-P said it had been advised that pretexting was "not generally unlawful."

That's the typical defense, experts said.

But Douglas said it's clear to him the practice is illegal. He cited the strict California law plus comments by the Federal Trade Commission.

Gandal disagrees the practice is illegal under federal law, and he said he can even see it as ethically OK in certain situations.

"But I could never decide which PIs (private investigators) were the good guys, and it kind of scared me.

"But who is anyone to judge her ethics?" Gandal said of Dunn. "She probably thought she had the company's interests at heart."

Douglas said what makes the H-P case unusual is that it came to light.

"This is usually quite successfully kept under the radar screen," Douglas said. "And for a board to spy on its own members is quite astonishing and unique."

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