Risk & Compliance

Companies Could Face Charges for Spying

California's attorney general is expected to bring indictments against five of the people tied to the HP scandal.
Sarah JohnsonOctober 4, 2006

Last week’s congressional hearing on Hewlett-Packard’s board leaks had white-collar crime watchers wondering whether corporate spying is legal. This week, the California’s attorney general’s office may provided an answer. The attorney general is expected to seek criminal indictments against five people tied to the HP scandal.

The indictments are likely to send shivers through U.S. companies that use spying techniques to conduct internal investigations, as the activities may be viewed—depending on the outcome of the case—as illegal.

According to news reports citing people familiar with the case, former HP chairman Patricia Dunn and former chief ethics officer Kevin Hunsaker will likely face criminal charges brought by California state attorney general Bill Lockyer. Investigators Ronald DeLia, Joseph DePante, and Brian Wagner also will likely be charged, according to the Associated Press. The investigators helped HP obtain personal phone records, including record of HP employees and outside journalists.

The five individuals would face felony charges for using false or fraudulent pretenses to obtain confidential information from a public utility, unauthorized access to computer data, identity theft, and conspiracy to commit these crimes, the wire service reported. HP CEO Mark Hurd is not expected to be charged, according to BusinessWeek.

In her written testimony submitted last week to the House Energy and Commerce subcommittee, Dunn said HP’s CFO, Robert Wayman, approved an investigation into boardroom leaks that has since led to her resignation and several other directors and executives.

She wrote that she relied on Wayman’s expertise in dealing with board security issues. Specifically, Dunn noted that in early 2005, Wayman, who had been CFO and acting chief executive of HP, referred her to Kevin Huska, the head of HP’s global security. “[Wayman] himself, as a director and top executive, was as concerned as anyone about the problem of leaks,” Dunn wrote.

During her verbal testimony, however, Dunn barely mentioned Wayman’s name. HP has stood by Wayman, saying that he was not involved in the investigation. He is not mentioned in the news reports regarding the impending criminal charges.

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