October 4, 2006 5:55 PM PDT

Calif. AG files felony charges in HP probe

SACRAMENTO, Calif.--California's attorney general filed felony criminal charges on Wednesday against former Hewlett-Packard Chairman Patricia Dunn and four others in connection with the company's internal probe into boardroom leaks to the news media.

"One of our state's most venerable corporate institutions lost its way as its board sought to find out who leaked confidential company information to the press," Attorney General Bill Lockyer said during an afternoon press conference here. "In this misguided effort, people inside and outside HP violated privacy rights and broke state law."

The others charged were Kevin T. Hunsaker, HP's former senior lawyer; Ronald DeLia, a private detective; Matthew DePante, of data-brokering company Action Research Group; and Bryan Wagner, a Colorado man believed to have been an employee of Action Research, according to the filing in Santa Clara County Superior Court.

Despite earlier reports, Matthew DePante, 27, was charged by Lockyer's office and not Joseph DePante, his father and the owner of Action Research. Up until now, the elder DePante has been the only one in his family linked to the HP case.

The five face four felony charges: fraudulent wire communications, wrongful use of computer data, identity theft, and conspiracy to commit those three crimes. (Click here for PDF of filing or here for PDF of supporting documentation.)

During the press conference, Lockyer and his aides singled out Dunn for fueling HP's leak probe. She and Hunsaker are expected to surrender to authorities sometime Wednesday evening, said Bob Anderson, chief deputy attorney for legal affairs, who did most of the speaking at the press conference.

"Patricia Dunn in our view was the catalyst for the (HP) investigation," Anderson said.

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Video: California attorney general speaks
At a press conference in Sacramento, Calif., Bill Lockyer announces criminal charges against former HP Chairman Patricia Dunn and four others.

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Video: California AG: HP 'lost its way'
Bill Lockyer says protecting privacy is crucial

Dunn, who has hired a prominent crisis management firm to handle her personal public relations, told a U.S. congressional subcommittee last week that she was never aware that illegal methods may have been used during her company's leak probe. Her public-relations firm issued a statement from Jim Brosnahan, Dunn's attorney, following Lockyer's press conference.

"These charges are being brought against the wrong person at the wrong time and for the wrong reasons," Brosnahan said. "They are the culmination of a well-financed and highly orchestrated disinformation campaign."

The felony complaint had been expected ever since Lockyer said in a TV interview last month that he had proof crimes were committed in HP's attempt to uncover the source of news leaks within its ranks. The company has acknowledged that as part of its investigation, HP obtained private telephone records belonging to some of those spied on through false pretenses.

Asked whether the attorney general had effectively cleared HP CEO Mark Hurd, who has acknowledged being informed of many of the methods used in HP's investigation, Anderson said: "It would be premature to say anyone is cleared...the investigation continues."

Anderson said that each of the four charges could bring a maximum jail sentence of three years. Some legal experts have speculated that there are no clearly defined laws against pretexting, the practice of obtaining information through false pretenses. Anderson downplayed any question as to its illegality.

"I don't believe there is any ambiguity whatsoever," he said.

Lockyer press conference

Because DeLia, Wagner and Matthew DePante reside out of state, Lockyer will seek to extradite the three unless they waive extradition, Anderson said. He added that former HP general counsel Ann Baskins is cooperating with California's investigation into the leak hunt.

The complaint filed by Lockyer in Santa Clara County Superior Court alleges that the defendants used "false and fraudulent pretenses" to dupe phone company employees out of confidential information, including billing records, belonging to 12 people. Among those people were HP board members and nine journalists, including three from CNET News.com, and some of their family members.

As for the count of identity theft, Lockyer alleges that Dunn and the others accused obtained personal identifying information, including names, phone numbers and Social Security numbers, of 13 people.

"The defendants then used that information for an unlawful purpose," the complaint said.

Dunn and Hunsaker knew that the investigators hired by the company had obtained phone records through false pretenses, the complaint alleges, and then "facilitated use of the illegal means" to obtain phone records.

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The complaint claims that Dunn provided DeLia, who did investigative work for HP for eight years, with home, cell and office phone numbers of HP board members in April 2005. Two months later, DeLia informed Dunn and Baskins that "telephone records were obtained by ruse," the complaint said.

Dunn, who resigned last month as chairman, was regularly updated on the investigators' progress, according to the complaint.

DeLia hired Action Research, operated by Joseph DePante, to obtain the phone records knowing that the company obtains information through false pretenses, according to the complaint. Wagner was employed by DePante and performed the actual work of obtaining the phone records through pretexting, the declaration alleges.

California has requested bail for three out-of-state defendants; $50,000 for DeLia and Wagner and $100,000 for Matthew DePante. Anderson did not specify why DePante's bail amount was higher.

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Headline writing
This is for C/Net.

A rule when writing headlines is to use the name of a person only
when that person is universally known to the reading audience. Few
outside California ever heard of Lockyear, as in the C/Net headline
"Lockyer files felony charges in HP probe."

"California attorney general files felony charges in HP probe" is a
universal headline. Thanks for posting this in the newsroom.
Posted by reybar (7 comments )
Reply Link Flag
Good catch
And for those lucky enough to not know who Lockyear is, just be thankful!
Posted by SomethingToThinkAbout (5 comments )
Link Flag
Indict the government while you're at it
If they can indict HP CEO for spying, then you might
<a class="jive-link-external" href="http://www.teckmagazine.com/content/view/551/43/" target="_newWindow">http://www.teckmagazine.com/content/view/551/43/</a>
as well indict the U.S. government for the same thing.
Posted by cnutsucks (25 comments )
Link Flag
HP punished because CNet leaked news... sounds fair
This is rediculous. If CNet had not released confidential information, HP would have never gone after them, now that they have, the HP folks are going to jail?!? That's totally unfair. Where is the punishment for the irresponsible journalists?

Even though the people trusted with the privilaged info should be punished, why is the press not held accountable as well?

If I were running a company, and trade secrets were leaked, and the only way for me to find out who was leaking the info was to track the people publishing that info, you're freaking right I would. I would follow the example my government sets for me.
Posted by Mr. Network (92 comments )
Reply Link Flag
HP punished because CNet leaked news... sounds fair
They are resposible journalists for publishing this information &#38; should not be punished for their actions.

On the other hand if the journalist published legal information that harmed the company competetively then yes, journalist should be held accountable for their action.
Posted by Intelking (2 comments )
Link Flag
CNET didnt leak
the news... they published the news SOMEONE ELSE leaked.

That is a technicality though... if HP felt that they were done wrong they could have went to the police. There are right and wrong ways to do things... this was wrong... and two wrongs dont make a right... did you not listen to your mom?
Posted by volterwd (466 comments )
Link Flag
lets be honest
The issue here isn't that of the leaked story it is of the way a corporation took advantage of their trust in both their ability to gain information (sin number and other sensitive private information). Now I work for a large corporation and I don't feel that they should be sneaking around and getting my phone records and tap my phones for an assumption they have that I may have leaked information...
Posted by Mr-P (6 comments )
Link Flag

it is a journalists responsibility to REPORT all they can. Yes even regarding HP.

Posted by Stan Johnson (322 comments )
Link Flag
HP Punished
I am in total agreement with you. Freedom of information and freedom of speech should not be allowed to extend to the publishing of purloined secret information.

HP may have been wrong but please let those who stole or who published stolen information be punished also.
Posted by OmoEko (3 comments )
Link Flag
Confusing, isn't it?
"I would follow the example my government sets for me."

It surely does get confusing, trying to differentiate between the laws you simply cannot break, and the laws you can break if you're a Republican in the Administration.

They really need to issue a document listing just who in America is above the law, so we don't get unnecessarily upset when we see them doing things we're not allowed to do.
Posted by missingamerica (6147 comments )
Link Flag
HP is not a government agency.
"If CNet had not released confidential information, HP would have never gone after them, now that they have, the HP folks are going to jail?!?"

Nobody forced HP to do anything illegal. The reaction was a choice they made. HP is not the government so your point is rediculous. When it comes to spying, you can't follow an example set by your government when you are not a government agency. Thats the bigger problem here. Those members of HP are part of a coporation, not the FBI so they need to be put in their place.
Posted by Akiba (220 comments )
Link Flag
This is great! Let 'em rot!
Stick it to all these frauds justice! I hope each one goes to jail and that Dunn gets the MAX sentence. These people are self absorbed "better-thans". They deserve anything and everything they get.
Posted by Stan Johnson (322 comments )
Reply Link Flag
JFK Said I Best
"My father always told me that all businessmen were sons of *******, but I never believed it till now."
John F. Kennedy
Posted by Too Old For IT (351 comments )
Reply Link Flag
You think this is ALL?
Knowing HP very well I sometimes forget how naive the general public is in making aaumptions about business organizations and their activities.

Oh yes! if we forego our fundamental rights and expectations to liberty, privacy and security, of course hp did no wrong but a slight mis-step in their enthusiasm for hunting down and attempting to destroy several people and, should be forgiven since large businesses have such a hard time in the world and have never committed any wrong before.

Oh yes that evil man for contacting someone and releasing information, who had no idea he was being maliciously and calluously stalked by, what in effect is a corporate spy network taking matters into their own hands and executed with complete disregard for legalities and others. He could never have had the foresight that this was the only sane and reasonable why to uncover an empire gone into a frenzied craze.

Whatever we do we should keep a tight lid on everything so that no one gets into trouble and there is no bad news, ever.

Oh yes it is all a big mistake and no one had any idea of what was going on.

hp could never be committing this same lack of regard for the public on a much grander scale, hu-uh, no never.

Put your cardboard sunglasses back on Jack, lest you be blinded by reality.

Once again going through my mind is why would someone in my organization be letting information out? If I was completely above board, and not the leader of a tyranical money and power focused organization, then I would find a solution for all of us. Doesn't mean flowers and sunshine but definitely does not include what I know is mean, derisive, illegal and hurtful.

There is no way in this heck or any of the next, that anyone, one as an executive in a business, does not know that this is wrong in all senses of the word.

The fact that hp not only initiated this but persisted is clear enough evidence that this is, and always has been, the way they conduct themselves in all matters.

Financial: Will their books and practices stand up to the cold hard light of dawn? "We know our numbers are not that good so we hired some of our regular goons to solve this for us." "We have no idea what they are doing and could careless whether it is legal or not."

Good and sevices: "We need a way to make people spend more money on our products" - "we hired some our regular henchpeople to redesign our products for us." "We don't care if it is fair or right, and least of all,.. any legalities are beyond us."

Surruptious data extractions: "No no, does not exist, what proof do you have?" "Now in this case we hired the best in the business,... you'll never know."

It is far too easy to hide behind a wall of secrecy for big corporations(and small) that previously have not shown good judgement and the upholding of the 'unalienable rights' of people in the past.

If hurd receives such outstanding acclaim for his "successes" at hp, then as far as I am concerned, he is the mastermind behind all this no matter how helpful he pretends to be. [http://A transfer of $375,000 in to the fall person's account would not be unheard of.|http://A transfer of $375,000 in to the fall person's account would not be unheard of.]

No, there is far, far more going on at hp than any can imagine.

.... I think we should buy a vowel.
Posted by Dragon Forge (96 comments )
Reply Link Flag
Wow, time to sell our HP stock?
"Knowing a company very well" is usually code for "I worked a contract there once." Truly, if HP is this reckless with handing out their security badges, it might in fact be time to reevaluate how much HP stock you're holding!
Posted by SomethingToThinkAbout (5 comments )
Link Flag
What everyonecommenting on the story forgets is:
1. Most if not all Boards have problems with boardmember leaks, although perhaps not as bad as HP;
2. Most if not all Boards, as well as top officers of companies, release information to the press and are quoted on a routine basis, so the fact that a director had contact with the press, by itself, is not proof of anything;
3. Even if there is someone improperly revealing confidential information to the press on the Board, there are LEGAL and MORAL ways to stop the leaks;
4. (Except in circumstances dealing with national security, it is illegal for anyone, whether a private citizen, corporation or law enforcement, to, without consent, obtain and disseminate an adult individual's private and confidential information, shadow and spy on such individual, listen to their personal conversations, bug or surreptiliously install tracking software on their computers and phones, etc. without a warrant. A limited exception occurs when the computer, phone or other equipment you are using belongs to the employer - in that case, there is no expectation of privacy for the employee. But in all other cases, the expectation of privacy does exist, even if the person doing the acts is not a law enforcement officer.
5. Everyone at the top in HP - Dunn, Hurd, Baskins, etc. knew what was going on, they attended meetings related to the security issues, they wrote e-mails, had conversations about it over a period of at least one year. There are also strong suggestions that several people were wondering if what they were doing was legal or not, but they went ahead and did it anyway.

The only defense these people have left is to say they were not aware of the extent of the improper actions performed by the security company, or that they did not fully read all the documentation and e-mails provided and sent to them. It should be no surprise that they all say they did not know.
Posted by itango (80 comments )
Reply Link Flag
And the only winner here is
And the only winner here is the lawyers, for these leeches stand to make a small fortune from these adherents of the "Peter Principle" should they choose to stand up and fight for what they did wrong!

How very sad, despite the best education money could buy, they were unable to do the right thing, and unable to accept the blame that they did was merely a reflection of that which occurs in both Wall Street and Washington DC on a daily basis!

But then again, given their existing standing and wealth within the community, business and corporate connections, and first offence etc, me thinks the cheapest option for all, is a plea bargain fine payment, and minimal penalty as applied by law!
Posted by heystoopid (691 comments )
Reply Link Flag
Dunn a scapegoat?
The charges against Dunn are long on sanctimony and short on justice. Dunn took charge by aggressive action to check a member that was sabotaging her meetings and her company. As for anyone who participated in pretexting, of course they should be prosecuted. But the worst thing you can say about Dunn is that if she did not make any inquiries into the details of the means employed by the pretexters, then maybe she failed to exercise due dilligence. How many others in her position would had the street smarts to do it better?
Posted by allaces (2 comments )
Reply Link Flag

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