HP Scandal: 10 Plead the 5th
Scott Kirwin
Politics and computers have always been passions of mine. Therefore it should come as no surprise that I am carefully watching the current scandal that has shaken, and appears to be slowly sinking the Hewlett-Packard corporation.
One of the basic rules of Life is that the cover-up is often worse than the crime itself. Many philandering husbands can attest to this, as could Richard Nixon (pphftp!) if he wasn't dead. The latest round: 10 participants including Kevin Hunsaker, HP's director of ethics and senior counsel, and HP's former general counsel, Ann Baskins, called to testify before the House Energy and Commerce Committee yesterday pleaded the Fifth Amendment. That was 8 more than expected by Congress. (Another one of Life's basic rules: Never surprise a politician in public.)
The result: former Chairwoman Patricia Dunn blamed everybody but herself:
"I am neither a lawyer nor an investigator, and in this matter, I relied on the expertise of people in whom I had full confidence, based upon their positions with the company and my years of experience in working with them. I deeply regret that so many people, including me, were badly let down by this reliance."
Current CEO, Chair and Grand Poobah Mark Hurd took responsibility for everything:
"Eventually, the buck stops with me," said Hurd. "In the end, I am responsible."
The analyst quoted at the bottom of the piece believes that Hurd should resign. I agree.
Is HP doomed? I doubt it. The company will survive. However it is clear that the current board is causing more trouble than it is fixing and therefore should go.
For background on this scandal, visit The Register. For a good play-by-play of testimony, visit this link - also at The Register.
I heard in one news cast that everyone involved relied on a legal opinion written by a law clerk hired by one of the private investigators that said the pretexting was legal. Everyone, including HP’s in-house lawyers, point to this opinion to claim they thought it was legal.
Since pretexting can easily be done across interstate lines, a federal law would make it clearer it is illegal.
The fact that they went with the opinion of a low-level staffer on a (now obvious) serious question seems to be pretty egregious to me. I've been a member of the bar for ten years, but I still run things past someone else for comment and correction. All of the senior attorneys do the same. Failure to do so, failure to check the sources and the cites is pretty damning. I've run across briefs (filed elsewhere) where the cite is wrong because they relied on someone else's brief to make theirs and did not check the source material. As an attorney there is an obligation to turn in a quality piece of work. A lot may be riding on it.