HP HITS LOW WITH PRETEXTING PHONE RECORDS
Filed Wednesday, September 13. 2006
The accusation that HP used “pretexting” to spy on its board of directors was recently announced on CNBC and on other TV news broadcasts. The result is the Exxon Valdez of the technology sector.
Pretexting is a tactic to acquire another person’s private information by calling in and pretending to be them. Because she was afraid that certain board members were leaking corporate initiatives, HP Chairwoman Patricia Dunn unilaterally authorized a project headed up by some independent electronic security experts and started checking on the personal phone records of board members. It was reported on Sept. 8 that she would not step down unless the board asked her to. By Sept. 11, many of the business news channels were talking about the lack of leadership in handling the crisis as it was announced that Dunn is stepping down. George Keyworth, one of the targets of the pretexting probe, is also stepping down. This review of personal telephone records using what some would call hacking approaches and social engineering could be viewed at worst as illegal and at the least is very questionable from an ethics and integrity perspective. One report said that a California attorney general is looking at it as a crime and is trying to determine who to charge. Indictments are coming. In one case on CNBC on Sept. 12, guest panelist Lanny Davis (a former advisor to President Clinton) said that this is crisis management 101. He said HP missed the boat. He went on to say that the worst examples used in crisis management courses were the Exxon Valdez tanker incident as the classic case and then the debacle at Enron replaced that. He believes this subversive surveillance at HP ranks right up there in the blundering of handling the crisis. He said: “You should go to the press and completely discuss it.” He said you should do it yourself and not through any third-party intermediary. On another CNBC show, Larry Kudlow doesn’t see the illegality of it. While some of his guests chastised him for not seeing it for what it is, some people might be so desensitized to what an illegal act is. He said the stock went up. That’s because people see the company as getting rid of bad leadership. My advice to Kudlow is to wake up and smell the subpoenas. They will be coming soon. One board member resigned in May in protest of the subversive practice when he found out about it. Tom Perkins, who has a longtime history with HP that includes knowing the two founders (Hewlett and Packard), resigned from the board. According to the Newsweek article, HP did not fully disclose on its quarterly 8-K report to the SEC the reason that Perkins resigned. By the way, he was not the source of the leak. That person was still on the board. What Happened to Phone Company Security? The security surrounding people’s private information seems to be compromised. Pretexting can be a sure-fire way to help facilitate identity theft and provide a comprehensive review of one’s phone records, bank records and anything else that is electronically linked with social security numbers and addresses of individuals. It is reminiscent of Kevin Mitnick’s infamous social engineering approach where you pretend to be someone else in order to obtain sensitive or privileged information. You call up the source and convince the person on the other end of the line to provide more information from their database. This leads to putting enough of the puzzle together to find out other sensitive information that could range from passwords to personal information to (in this case) personal phone records as to who and when directors called people. What is surprising is how relatively easy it was for the surveillance team to obtain the information. What happened to all the security and safeguards the phone company used to have with critical and proprietary information? Blame Should Be Put in the Right Place This shows another link between technology and compliance as you have an example of corporate governance being compromised HP owes a full explanation and an objective investigation to its shareholders, its employees and to everyone else in the business world who used to think HP products were the gold standard for printers, plotters and other instrumentation. Here are some of the “comments by the common man” found on a news site comment list: The acts conducted by the investigative company at the direction of Patricia Dunn have caused unprecedented embarrassment to the company and its ethical business practices. She ultimately initiated the investigation and should be accountable for all actions taken under said investigation. Here is one that is more focused: The buck stops with you, [Patricia] Dunn. Get out. You wouldn’t accept ignorance as an excuse from anyone who works there. Why should we accept it from you? Carly Fiorina was bad enough. This is worse. Unlike some TV pundits and respondents on various news comment lists, I don’t think this is a black eye on HP the corporation. The company has a rich history of great people, great leadership in its founders, great products and a great work ethic. This is an indictment of a few people who reached a higher level in their career than they ever should have. In this country, what we have is not a lack of hard-working people, creative people or dedicated people at all levels. You can find many of those people still looking for a job that utilizes their full potential as underemployment is seldom talked about. What we do have is a lack of true leaders and it shows by magnificent blunders like this. Don’t tarnish the name of a good corporation. Tarnish the names of the pseudo executives who should have never risen to the rank they did. If anything, blame those who made the unwise decision to put them in that position. Don’t reward any of them for their lack of integrity with a multimillion-dollar buyout or golden parachute. What Would Tony Do? Why is Dunn waiting three months to leave? Is there some special year-end bonus she will qualify for in December? That’s what one morning CNBC commentator thinks. I tend to agree with him. If you did something subversive, would your organization let you stay on until your year-end bonus for spying on your cohorts? It depends on your company. What would Tony Soprano do? While that might not be the best example, it’s time to be politically accurate instead of politically correct. Dunn should step down immediately and not be bestowed with any bonus. Let’s also hope the executive search firms don’t recycle this CEO into another decision-maker position to tarnish another company’s good name and reputation. Carlinism: You lead by example. When did so many executives forget this? Last modified on 2008-11-19 17:10 Trackbacks
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