Saturday, September 30, 2006

Could the H-P Pretexting Trigger a Conspiracy Charge

The sight of ten witnesses taking the Fifth Amendment at the House Subcommittee hearing looking into Hewlett-Packard's conduct of its internal investigation sure makes it look like everyone was working together, although each has his or her own reasons for asserting the privilege.  The key question for the two top H-P lawyers caught up in the case, former general counsel Ann Baskins and former chief ethics officer Kevin Hunsaker, is whether their links with the phalanx of private investigators who conducted the pretexting are sufficiently close to tie them into potential illegal conduct.  Evidence revealed at the hearing shows that their contacts with the PIs may have been closer than it first appeared when H-P took the position that the pretexting was unknown to -- and unauthorized by -- company executives.

Handwritten notes of Baskins from June 2005, at the start of the first leak probe by the company (Kona I), show her writing "Obtaining phone #'s is a time consuming process . . . Call carriers (Nextel/Sprint) via pretext to extract info.  I didn't make the call."  The notes are from a meeting to brief H-P about the conduct of the internal investigation.  Like any set of sketchy notes, it's not entirely clear what was meant, except that the magic word "pretext" appears in an early phase of the internal investigation and seems to tie Baskins directly into the conduct of the outside investigators.  An e-mail from a member of H-P's security department to  Hunsaker in February 2006 called into question the legality of the pretexting, shortly after Hunsaker's earlier exchange with former H-P security officer Anthony Gentilucci in which Hunsaker was told pretexting was "at the edge" of legality and responded, "I shouldn't have asked . . . ."  The e-mails and notes seem to link Baskins and Hunsaker much more closely to the use of pretexting while it was occurring and not just down the line when the results of the probe were made known. 

The more the two lawyers were involved in the oversight and, perhaps, even decision-making in the internal investigation, the more likely prosecutors will look at them as targets of the investigation.  One way to tie them in with the PIs is through a conspiracy charge, which under the Pinkerton doctrine means that a person is liable not only for the conspiracy but also all the offenses committed by the co-conspirators.  In the face of clear warnings about the legality of pretexting, the H-P employees and outside investigators may have agreed to move forward with an investigation that used illegal means to gather information.  Under conspiracy law, an agreement need not be express, and the co-conspirators need not know all aspects of the illegal conduct so long as there is an agreement to engage in criminal conduct, or to use illegal means to reach an otherwise lawful objective.  An interesting question will be whether there is in fact a crime from pretexting, because the object  of the conspiracy must be illegal.  As more information comes out about the involvement of Baskins and Hunsaker in the internal investigation, the greater the reason for them to assert the Fifth Amendment before the Subcommittee.  A Wall Street Journal story (here) discusses the new information about H-P's internal investigation. (ph)

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Interesting report, analysis, and statement of the applicable law. I am selfishly hoping that this goes to trial, its a fascinating look at the workings of a board. At lawblog, a commentator labeled the boards failings as arising from hubris. We seem to have all the makings of a classical Greek tragedy. Some enterprising playwright could do much with what has already come to light.

Posted by: Ronald X. Groeber | Sep 30, 2006 6:57:40 PM

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