Monday, September 11, 2006

Look Who's Knocking on H-P's Door

It is no great surprise (see earlier post here) that the U.S. Attorney's Office for the Northern District of California has taken an interest in the conduct of the internal investigation into boardroom leaks at Hewlett-Packard that included "pretexting" to gain private information about directors and newspaper reporters.  In a 10-Q (here), the company disclosed that "we have been informally contacted by the United States Attorney's Office for the Northern District of California requesting information similar to that sought by the California Attorney General. We are cooperating fully with these inquiries."  Interesting that at this point it is only an informal inquiry, but it may be that the federal prosecutors were coordinating their case with the California Attorney General's office.  Grand jury subpoenas to the private investigators and perhaps even corporate counsel could be on their way as each office figures out where it wants to go. 

The case raises some interesting questions related to the attorney-client privilege, particularly in light of the disclosure of an e-mail exchange between Larry Sonsini, long-time counsel to the company, and former H-P director Tom Perkins, about the internal investigation.  The government will want to learn not only about the initial leak investigation, but also the investigation of the investigation, which will likely raise privilege questions.  The company stated that it is cooperating with the various government investigations, and it is likely that a request to waive the privilege has already been made.  I suspect H-P will grant such a request to avoid an even greater public relations disaster than it already faces. (ph)


UPDATE: In case the knocking seems to be getting louder in H-P's headquarters in Palo Alto, the House Energy & Commerce Committee has also asked for documents related to the "pretexting" as part of its investigation of that practice.    Among the demands is the name of the heretofore undisclosed private investigation firm that conducted the pretexting.  Once that information gets out, and it will in short order, look for further government inquiries into the conduct of the H-P leak investigation. An AP story (here) discusses the burgeoning investigation. (ph)

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