Area data broker invokes the Fifth

Littleton man faces Congress in H-P pretexting scandal

Jeff Smith, Rocky Mountain News

Published September 29, 2006 at midnight

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A Littleton data broker suspected of using pretexting or deception to obtain the private phone records of a Hewlett-Packard director took the Fifth Amendment against self- incrimination at a congressional hearing Thursday in Washington.

Bryan J. Wagner was asked about three e-mails that linked him to supplying the private phone and fax records of then H-P Director George Keyworth and his wife. H-P's investigation found that Keyworth was the source of boardroom leaks to the media.

Wagner, who reportedly has destroyed his computer, invoked the Fifth. Then, after a pause, he said he felt he had some information that could help the subcommittee in its effort to make pretexting illegal. But the House Energy and Commerce Committee panel didn't ask any additional questions.

In all, only four people testified while 10 lawyers and private investigators/data brokers took the Fifth at a hearing probing H-P, which used pretexting to obtain the private phone records of seven directors, two employees and nine reporters. H-P's general counsel, Ann Baskins, resigned just before the hearing.

Ousted H-P Chairman Patricia Dunn and Chief Executive Mark Hurd were two of the four who testified under oath. Dunn said she regretted what happened but denied knowing the investigative methods being used included pretext. She said she thought private phone records were publicly available.

Hurd said he accepted responsibility for not taking a more active role in investigating the surveillance. He apologized to those "who were violated" and to employees and said he wished he had asked more questions and "caught the signs" of what was going on in the investigation.

"If Bill Hewlett and David Packard were alive today, they'd be appalled," Hurd said.

U.S. Rep. Diana DeGette, D-Colo., a ranking minority member on the panel, said in her prepared opening statement that the H-P scandal has sullied the name of a company that had an "iconic stature both here in the U.S. and, frankly, around the world."

She called the tactics sleazy.

Other panelists used equally colorful language and referred to the "H-P way" in a negative connotation.

Rep. John Dingell, D-Mich., likened the episode to the "Keystone cops" and a "plumber's operation that would make Richard Nixon blush if he were alive."

Others noted the irony of the scandal at a company that has won privacy awards.

Lawmakers said the case makes it more clear that Congress needs to pass legislation that would make it illegal to use pretext to obtain private phone records. The subcommittee backed such legislation earlier this year and held a hearing on the topic before the H-P case came to light. But the legislation has stalled.

The hearing had a number of Colorado links besides Wagner.

Darren Brost, of Austin, Texas, also allegedly used pretexting to supply private phone records in the H-P case.

Wagner and Brost, who also invoked the Fifth, both were trained in the 1990s by James Rapp, of Parker, a data broker who pleaded guilty in 1999 to racketeering in connection with selling confidential information. Rapp maintains he now is out of the business.

A lawmaker cited a document indicating that Robert Knowling, chief executive of Arapahoe County- based Vercuity and a former H-P director, also had his private phone records investigated. Vercuity spokeswoman Lynda Stadtmueller said Knowling wouldn't be commenting.

The panel also referred to an instance when surveillance was conducted on Keyworth during a speech he made in Colorado in January.

The number of those who invoked the Fifth frustrated DeGette.

While she said she could respect their decisions, she said, "It's very difficult for us in Congress to have an investigation. . . . I think it's a waste of the committee's resources."

DeGette said she at first didn't think the scandal rose to the level of the corporate frauds during the Enron era. But she said her opinion has shifted, and she called H-P a "disturbing" case study of corporate board members failing their fiduciary responsibilities.

A lawmaker asked Dunn if she felt she had any culpability.

"If I knew then what I know now, I would have done something very differently," Dunn said. But she said she doesn't accept personal responsibility for what happened.

Dunn said she does think pretexting is fraudulent and that the privacy of individuals "need to be protected with crystal-clear laws."

She also said there need to be some "safe harbor" provisions for companies so they can conduct investigations to protect their secrets and the interests of their shareholders.

Dunn said she believes the methods used "may be quite common at companies around the country."

Experts such as Colorado information security consultant Rob Douglas also have said the methods are more common than many realize. For example, some companies use pretexting to track down bad debtors, while others attempt to ensure that disgruntled employees or ex-employees aren't passing company secrets to competitors.

One lawmaker asked Dunn if she thought it was right that Baskins, the H-P general counsel who many blame, is leaving with a $3.6 million golden parachute.

Dunn didn't directly answer the question. But she noted that while Baskins "made some errors in judgment," she was a 26-year employee who "bled H-P blue ink" and now her career is ruined.

Colorado links

• Bryan Wagner, of Littleton, suspected of using deception to obtain private phone records of then- Hewlett-Packard Director George Keyworth. Wagner was trained in the 1990s by his uncle James Rapp, of Parker. Declined to testify under the Fifth Amendment.

• Darren Brost, of Austin, Texas, also allegedly used pretexting to get private phone records in the H-P case. Also trained by Rapp in the 1990s. Declined to testify under the Fifth Amendment.

• Robert Knowling Jr., former H-P director whose private phone records were examined as part of the H-P board leak probe. Knowling is now chief executive of Vercuity, an Arapahoe County-based telecom expense management company. Wasn't called as a witness.

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