Column: The Pretexting Way

Letter From Silicon Valley
09.22.06, 6:00 AM ET

Burlingame, Calif. -Hewlett-Packard has my number. Not only my work and cell phone number, but probably also the numbers of my father, the nanny of my son’s best friend and a host of others. My husband, George Anders, works for The Wall Street Journal. He was one of the nine journalists targeted by private investigators hired by HP to figure out who was leaking corporate information to the press. For us, the story has gone from weirdly funny to downright creepy as more details have emerged. Ultimately, there are going to be quite a few casualties from this hit-and-run demolition of HP’s ethical standards.

We entered the story when a beleaguered sounding HP spokesman called us at home one evening to tell us about the probe and apologize for the fact that investigators hired by HP decided to snoop through our phone records. We were, quite honestly, surprised: My husband published a book about HP and Carly Fiorina in 2003. Since then, he’s written stories about everything from options guzzling executives to quaint ghost towns--but only an occasional piece on HP. A few days later, news dribbled out that the investigators had rifled through the phone records of the PR guy, too. (HP’s bosses say they’re sorry about that one as well.)

As it turns out, the techniques the investigators considered seem unbounded by decency, common sense or even by a budget. Along with scrutinizing phone records, they watched people's homes and even thought about planting spies disguised as janitors in the offices of The Wall Street Journal and CNET to look for clues.

HP executives, too, seemed to be devoting an astonishing amount of time to faking out one journalist in particular, reporter Dawn Kawamoto of CNET. The Washington Post has served up some astonishing details of the HP plot. Senior Council Kevin Hunsaker apparently oversaw the investigation, which was largely handled by private firms in states that follow the old East German approach toward privacy. Hunsaker helped create a fictitious persona, “Jacob,” who would leak inaccurate information to Kawamoto. By including a “tracer” program in Jacob’s e-mail, investigators hoped to track down anyone Kawamoto later e-mailed with the fake news. (Like all too many programs, the software turned out to be a dud.)

The Post reports that on Feb. 22, Hunsaker sent a copy of the faked product information to HP Chair Patricia Dunn and general counsel Ann Baskins in an e-mail. "I made up everything in the slide, trying to make it at least somewhat feasible," Hunsaker wrote to Dunn and Baskins. "I won't quit my day job, but hopefully neither the name nor the information on the slide are terribly off-base."

Suggestion to Hunsaker: Go ahead. Quit your day job.

One private investigator, a long-time family friend, scoffed at the methods reportedly employed by the firms working on behalf of HP. Any investigator worth his retainer could have used much subtler methods, our friend suggested.

All of which begs the question: Is every company spying on people?

Just about every publicly held company worries about leaks. The most obvious leaks occur during the so-called “quiet” period--the typically 20 or so days after a company closes its financial quarter and before it reports the results. Trading on these results is a big no-no (otherwise known as insider trading). But frequently analysts’ estimates of quarterly results get awfully close to the mark during those magical “quiet” days.

To try to stem leaks, company managers will zero in on the employees who get a glimpse of e-mails. Companies can--and do--monitor e-mail. Routinely.

Some companies let employees know that the penalties for talking to the press are stiff. At Apple Computer, CEO Steve Jobs has lashed out at those suspected of dealing in leaked Apple information. In January 2005, Apple sued a Web site, Think Secret, run by a then 19-year old, for allegedly soliciting insider information from employees and publishing it on the site. You can bet Jobs lost little sleep in going after anyone inside Apple who might have gossiped with Think Secret.

Scott McNealy, formerly CEO of Sun Microsystems, put it succinctly in 1999 when he said, “You have zero privacy. Get over it.”

Ironically, McNealy was less hung up on leaks than many other Valley CEOs. In the mid 1990s, when Sun made a bid to acquire Apple, insiders on both sides of the proposed deal were throwing buckets of details to the press in hopes of nudging the sale price up or down. One insider told me that McNealy never bothered trying to figure out who was leaking what. (Ultimately, the deal tanked for other reasons.)

Clearly those days are over. The level of suspicion has risen dramatically. Journalists must weigh whether information is fabricated and interviews covertly monitored. Sources, too, will feel that no conversation is ever private.

Zero privacy--and zero trust. These are poignant legacies for HP to give to the Valley.

http://www.forbes.com/technology/2006/09/21/hp-spy-corcoran-tech-cz_ec_0922valleyletter.html

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