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Hewlett Packard & Pretexting-Does anybody ever take responsibility?

September 8, 2006 It has surfaced in the news that certain Hewlett Packard directors have had their private phone records accessed by investigators working for Hewlett. In addition to the directors, nine reporters of the Wall Street Journal also had their phone records accessed.

The reason for the action is because of leaks that were taking place from Hewlett’s board of directors. At the moment it seems the clowns (people) responsible for the actions are Larry Sonsini, the outside counsel, and Patricia Dunn, who is Hewlett’s non-executive chairman. In many states this type of activity is outright illegal, and considered criminal.

Patricia Dunn is denying that she had any knowledge of how the investigators obtained the information. What happens is that an investigator will simply pose as someone they are not, in an attempt to get that person’s information. The inside general counsel of Hewlett is Ann Baskins. She used an investigator who has not been identified yet, who in turn used a private contractor to do the deed.

Who’s driving the bus?

What’s going on here? Doesn’t anybody take responsibility for screwing up? Dan Rather was basically fired by CBS. After a 40 year career, he screwed up when he accused President Bush of receiving favored treatment over his National Guard duty during the Viet Nam war. The problem was not the truth, or non-truth of Rather’s allegations. The problem was two fold. One you had to prove it, and Rather couldn’t prove it. The second problem was Rather pulled this stunt within a week of a Presidential election. Was he trying to sway the election? No, of course not, Dan Rather wouldn’t do that, would he?

In the case of Hewlett Packard somebody should go to jail, and I don’t mean the little guy who did the deed. Chairman Dunn should fall on her sword and be publicly fired, because this isn’t the sort of thing that should be accepted at a company. Why is it taking so long? Is the company hoping that it will blow over, that this is a two day media event that will then lose its steam, and we can move on to whether Yankee pitching will hold up in the play-offs?

It always starts at the TOP

In any organization the corporate culture is dictated by the guy at the top. It always starts there, and works its way right down to the assembly floor. I have witnessed this in every organization I have ever been associated with. A couple of decades ago, I was a Senior Vice President of the oldest investment banking firm in the United States. We traced our ancestry to the mid 1800’s. Our partners would float in and out of Cabinet positions in government.

My immediate boss was a senior partner, and member of the firm’s Board of Directors. The man who I consider a mentor, was extremely tough on everyone associated with him, and I mean tough. He could be nasty beyond belief. I saw him on occasion walk over to an associate, and remove the newspaper from his desk as he was reading it and rip it up. Yes he was making a point, and I do believe people got the point.

One day, a psychiatrist says to me, “You know Rich, the way he treats his subordinates, is the way he’s treated by his boss.” I say, you got to be kidding; no one would ever treat him like that. A month or two later, I am up on the investment banking floor, and I hear somebody getting a tremendous verbal beating. Sure enough, it’s the Chairman of the company denigrating you know who. The Chairman was unmerciful in his comments and the volume with which he made them.

Yes, it always starts at the top. People at Hewlett Packard have in my opinion violated the criminal code of conduct by violating the rights of people outside their corporate entity, namely reporters. In the final analysis our founding fathers, were very persuasive in their writings that freedom of speech, and in this case press, must be protected at all costs. Once the rights of reporters to publish what they believe is a fair and accurate assessment of a situation is coerced by other people or in this case corporate entities, we are at risk of going down the wrong path, and seeing a lessening of our freedoms.

Heads should roll at Hewlett Packard. People should be made to walk the plank. My greater concern is what does this say about the corporate culture at this American corporation giant. Bill Hewlett and David Packard who founded this company in a garage decades ago, would turn over in their graves if they knew what had become of it.

This company needs to be shaken up. If they can’t get their act together on this one, what does it mean for how they operate as a business, which involves my own circle of competence as a money manager? The answer is I don’t know, but I am sure going to be taking a much closer look.

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