Thursday, September 21, 2006
This Week in Corporate Malfeasance: Hewlett Packard Gives us an example of why Big Business is always better than Big Government.
Chairman's E-Mails Detail Operation
By Ellen Nakashima and Yuki Noguchi
Washington Post Staff Writers
Thursday, September 21, 2006; A01
Hewlett-Packard Co. chief executive Mark V. Hurd approved an elaborate "sting" operation on a reporter in February in an attempt to plug leaks to the media, according to an e-mail message sent by HP Chairman Patricia C. Dunn.
The document, one of more than two dozen e-mails obtained by The Washington Post, for the first time links Hurd to an internal investigation of media leaks that has led to criminal probes and will be the subject of a congressional hearing next week.
Internal e-mails show senior HP employees who were given the task of identifying anonymous news sources concocted a fictitious, high-level HP tipster who sent bogus information to a San Francisco reporter in an attempt to trick her into revealing her sources.
The e-mail sting operation, which was part of a wide-ranging two-part HP investigation that began in March 2005 and ended in May 2006, is the latest in a series of deceptive and possibly illegal tactics that reveal the lengths to which HP went to spy on people inside and outside the company to protect its image and secrets.
HP's leak investigation involved planting false documents, following HP board members and journalists, watching their homes, and obtaining calling records for hundreds of phone numbers belonging to HP directors, journalists and their spouses, according to a consultant's report and the e-mails.
The e-mail operation demonstrated an intense degree of attention by Dunn, who often sent messages via a BlackBerry device, and by senior HP executives attempting to cultivate and trick a news reporter to find the identity of her source. A Hewlett-Packard spokesman declined to comment on the revelations or make Hurd or Dunn available for an interview.
None of the e-mails reviewed by The Post were to or from Hurd, nor do they detail what information Hurd had when he approved the sting operation.
A corporate spying effort this broad and orchestrated has never before been exposed, experts said.
"If you'd laid this out as a science fiction story, it'd be hard to believe it's true," said Ari Schwartz, deputy director of the Center for Democracy & Technology, a District-based privacy watchdog group.
It was unclear whether the e-mail sting operation involved illegal tactics, experts said, but federal and state authorities have launched probes into the legality of HP's methods.
On Sept. 28, Dunn and several other HP executives are scheduled to testify before the House Energy and Commerce investigative subcommittee about their roles in the spy probe. The hearing is part of an inquiry led by committee Chairman Joe Barton (R-Tex.) into the techniques Hewlett-Packard used.
California Attorney General Bill Lockyer said last week that he had enough evidence to issue indictments against people inside and outside HP. The spying scandal erupted into public view this month after it was revealed that board member Thomas J. Perkins had resigned in protest months ago after learning that his personal phone records had been obtained under false pretenses.
The Hewlett-Packard board of directors is scheduled to meet today, and Hurd is to brief board members about developments in the internal review. Hurd is expected to hold a press conference Friday.
After an emergency board meeting last week, Dunn agreed to resign as the board's chairman in January but she is to remain on the board, handing the top job to Hurd. George "Jay" Keyworth, a board member who said he talked to a reporter, resigned last week.
Though nine journalists were apparently targeted in HP's leak investigation, one in particular drew the scrutiny of Dunn and Hurd, according to a series of internal e-mails. Dawn Kawamoto, a reporter for Cnet.com, wrote a fairly straightforward article on Jan. 23 outlining the firm's long-term strategy after a board retreat.
Determined to ferret out the source's identity, HP senior counsel Kevin Hunsaker, who led the HP investigation ordered by Dunn, and an HP colleague in Boston created a fictitious persona, "Jacob," who would pose as a disgruntled HP "senior level executive" and cultivate Kawamoto by saying he was "an avid reader of your columns."
The idea, evidently, was to induce Kawamoto to open an e-mail attachment with a "tracer" in it that would allow them to see who she forwarded it to. They hoped it would pinpoint board member Keyworth as her source, according to the documents.
On Feb. 2, Hunsaker made a PowerPoint presentation to Dunn, called Project Kona II, in which she was shown the "covert" e-mail sent to Kawamoto on Jan. 26. In it, "Jacob" wrote that "tired of broken promises, misguided initiatives and generally bad treatment," he had information to pass on to her.
The computer-generated presentation included a proposed " 'next step' covert e-mail" in which "Jacob" would establish his insider bona fides with Kawamoto by telling her that, contrary to an article she wrote, a potential HP deal with "CSC," or Computer Sciences Corp. was "definitely on HP's radar . . . I know because I was involved in preparing the briefing documents."
After the presentation, Hunsaker sent Dunn an e-mail thanking her for "taking such a big chunk of time" to meet with his team. Dunn replied with an e-mail to Hunsaker, saying that she was "encouraged that this effort is on the right track."
As the project evolved, Hunsaker and Anthony Gentilucci, an HP global investigations manager in Boston, began to refine Jacob's character. "I think we have to figure out who Jacob is, weak, strong, vindictive, a Bill and Dave fan, possibly lower level employee . . . will dictate the tone of the e-mail," Gentilucci wrote on Jan. 28.
Over the next week, HP investigators designed a plan to give Kawamoto a "[small] accurate piece of advance information" about a new handheld product, before they would "spring the false one," referring to a fabricated news tip about HP opening a computer data farm. That first tip, about the handheld device, would be sent in an e-mail that would include the tracking software.
On Feb. 5, Dunn sent an e-mail to Hunsaker: "This sounds promising. I will be in contact with Mark and come back to you with an indication of joint approval as soon as we connect."
Sending someone an e-mail file, even under false pretenses, and then tracking whether it was forwarded may violate confidentiality policies, but is probably not illegal, said Robert Seiden, chief executive of Fortress Global Investigations Corp. If the company used its program to try to access other information from Kawamoto's computer, however, that would be a violation of federal law, he said.
A Feb. 8 e-mail from Ronald DeLia, a Boston security contractor hired to work on the HP leak investigation as part of Hunsaker's team, suggested "a more elaborate sting" involving "electronic bugs" that would allow the tracking of calls between Keyworth and Kawamoto.
If the team wiretapped the calls of Keyworth and Kawamoto, that too would be illegal, Seiden said.
On Feb. 9, in an e-mail to Hunsaker and general counsel Ann O. Baskins, Dunn wrote: "I spoke with Mark and he is on board with the plan to use the info on new handheld" devices and that "he also agrees that we should consider doing something with" the data-farm tip.
On Feb. 16, Kawamoto sent an e-mail to "Jacob" that she would be on vacation the next week. DeLia forwarded her e-mail to his colleagues, saying: "Team, We're alive and kicking." He also noted that, based on her cellphone call records, she was going to Disneyland. "She has made numerous calls to a hotel in Disneyland," he wrote.
On Feb. 22, Hunsaker e-mailed Dunn and Baskins with a copy of a slide showing the bogus handheld product to be launched. "I made up everything in the slide, trying to make it at least somewhat feasible," Hunsaker wrote to Dunn and Baskins. "I won't quit my day job, but hopefully neither will the name nor the information on the slide are terribly off-base."
Dunn replied: "Kevin, I think this is very clever. As a matter of course anything that is going to potentially be seen outside HP should have Mark's approval as well."
On Feb. 23, Hunsaker sent an e-mail to Dunn. "FYI, I spoke to Mark a few minutes ago and he is fine with both the concept and the content."
Staff researcher Richard Drezen contributed to this report.