HP board flap raises wider privacy issues
This week's top-level spying spat hits on a legal gray area.
This week's top-level shake-up at the computer firm Hewlett-Packard has focused new attention on privacy breaches involving consumer phone records, and could jump-start new government efforts to protect the public.
Hewlett-Packard's chairwoman Patricia Dunn resigned Tuesday amid a furor over the board's effort to trace leaks to the media from among its members. Security firms hired by Hewlett-Packard had apparently used a dubious technique known as "pre-texting" – posing under false pretenses to obtain phone records of board members and news reporters – and are now being investigated by state and federal officials and by Congress.
The moral of the story goes beyond Hewlett-Packard: If such an intrusion of privacy can happen to millionaire Silicon Valley power brokers, it might happen to you.
"It's about every consumer ... who gets a monthly billing statement," says Marc Rotenberg, who heads the Electronic Privacy Information Center in Washington. "Policymakers need to address this challenge."
In the Hewlett-Packard case, the pre-texting was done not by HP but by private investigators or other contractors who used Social Security numbers to impersonate the company's directors and a handful of journalists.
Boardroom leaks are a serious matter, often prosecutable, given the financial responsibilities of corporate directors to shareholders. But in this case, the phone-record furor has overshadowed the legal question of the leaks themselves, which date back to a time in 2005 when the board decided to oust then-CEO Carly Fiorina.
The alleged leaker, board member and former White House Science Adviser George Keyworth, resigned Tuesday, even as Dunn said she would step down as chairwoman in January. Mark Hurd, the current CEO, will add the title of chairman, and one board member will take the title of lead independent director.
The affair comes as HP stages an impressive corporate comeback while launching important new products. Among the key questions that linger over the affair: How much did board members know of the methods that investigators employed in tracking the leaks?
California Attorney General Bill Lockyer said Tuesday that he has enough evidence to indict HP officials and outside contractors.
Despite Mr. Lockyer's certainty, some experts say pretexting falls into a legal gray area that may require new laws and rules to effectively suppress its use.
"For us it's certainly rising to the top of the list" of urgent privacy issues, says Mr. Rotenberg, whose organization petitioned the Federal Communications Commission (FCC) for new mandates on phone companies to protect customer information. "There's just very little regulation."
Consumer advocates say two steps are needed: A law that clearly bans the practice and creates tough penalties, and requirements that phone companies have strict safeguards in place in their customer service departments.
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