HP's private eyes agree to pay $3,000 for illicit spying
Private investigators, be warned: if you spy on journalists on behalf of Hewlett-Packard, knowing state and federal laws prohibit you from obtaining their phone records through dubious means, you may end up paying a whopping penalty of $3,000.
That's the message the Federal Trade Commission delivered on Wednesday when announcing the $3,000 settlement with Joseph Depante and Matthew Depante of Action Research Group. The settlement (PDF) reached before a Florida judge and approved by the FTC commissioners allows the Depantes to admit no wrongdoing and characterizes the $3,000 payment as "equitable monetary relief" and not a fine.
HP hired Action Research Group to uncover the source of boardroom leaks to journalists--including three CNET News.com reporters. (As part of the spying scandal, HP contractors and investigators obtained the home and mobile telephone records of the reporters and their family members, sent e-mail bugs as attachments, and secretly followed and photographed News.com reporter Dawn Kawamoto and her daughter. The reporters have since sued HP and the cases are pending in state court in San Francisco.)
The FTC said in a press release that the $3,000 equitable monetary relief was due to the Depantes' claimed "inability to pay" a larger penalty of $67,000. The Depantes did agree not to violate federal privacy laws in the future and will notify the FTC of their whereabouts and employment status for the next three years.
After HP hired Action Research Group to look for the source of leaks, the group contracted with other investigators to "pretext"--that is, dupe--phone companies into handing over records of telephone calls belonging to the targeted journalists.
Matthew DePante pleaded no contest to one count of fraudulent wire communications in Santa Clara County Superior Court in San Jose, Calif. As a result, he was required to complete 96 hours of community service--with no jail time--and the charge was scheduled to be dismissed upon completion of the community service.
In addition, the federal court in Florida entered a default judgment against other defendants: Eye in the Sky Investigations, Cassandra Selvage, and Bryan Wagner. Under default judgment rules, meaning they didn't show up in court to provide a defense, Wagner was ordered to pay $428,085, and ESI and Selvage a total of $110,762.
Ex-HP Chairman Patty Dunn faced criminal charges for her role in the scandal; a judge dismissed those charges in March 2007. Dunn has apologized to the News.com reporters who were the subject of the illicit surveillance.
Declan McCullagh, CNET News' chief political correspondent, chronicles the intersection of politics and technology. He has covered politics, technology, and Washington, D.C., for more than a decade, which has turned him into an iconoclast and a skeptic of anyone who says, "We oughta have a new federal law against this." E-mail Declan. 
do you have to say "uh" two times for every sentence you deliver on the podcasts? Jesus.
- by pjk0 June 1, 2008 1:41 AM PDT
- How disgusting. I agree that Florida seems to be the center of US sleaze these days (including most of the biggest US spammers and the "Church" of Scientology), but this is just outrageous.
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(3 Comments)Personally I'd be more inclined to blame GWB's political hacks in charge of the FTC more than anything. The FTC regime these days, like most federal agencies under Bush including the FCC and FDA, is just a blatant corporate tool.
One can only hope that Cnet will not merge increasingly in that direction after the takeover by CBS. :P