Hewlett Packard raises pretexting controversy
October 5, 2006
A perceived lack of options may have lead Hewlett Packard executives awry but does not excuse their actions, campus experts say.
Patricia Dunn, former co-chairwoman of Hewlett Packard, along with four others, was charged Wednesday with felonies connected to methods used in operation to uncover a boardroom leak.
The five defendants, including HP’s chief ethics officer and three investigators, face felony charges for allegedly using illegal methods including assumed identities to uncover the identity of a member of the HP board of directors who leaked information to journalists.
The methods that were allegedly used were very unethical, said Brad Shrader, professor of management, who has expertise in business ethics and corporate governance. He explained that a process known as “pretexting” should not be used in business.
“Pretexting is a euphemism, that’s their own word I believe,” he said. “They allowed some of their investigators to impersonate or misrepresent themselves – whatever you want to call that – I don’t think that that’s ethical, I don’t think that anyone in business should misrepresent themselves.”
Attorney and associate professor of journalism and communication, Barbara Mack, who specializes in media law, agreed with Shrader.
“They are accused of doing something which they call pretexting, which is a fancy term for lying, because they were calling up and impersonating maybe law enforcement officers – although we don’t know that – or security consultants in order to get access to telephone records, or they were fraudulently representing themselves to be reporters or the board members of the telephone records they were trying to get,” she said.
Mack said if the allegations are true, they would constitute a violation of federal law.
Chad Harms, assistant professor of journalism and communication, said such tactics would demonstrate a complete invasion of privacy.
“Basically, it’s identity theft, that’s what’s going on,” Harms said. “I mean they used individuals’ personal information to access their personal information.”
Harms added that the boardroom leak was also unethical, but it does not excuse using illegal investigation methods. The bigger concern, he said, may be corporate priorities.
“If a company’s profit model forces them to act in a particular way, then maybe the bigger concern should be the question on how important is the profit,” he said. “We see that all the time not only in private industry but in government, religious institutions-there’s a variety of places where deception goes on,” he said.
Shrader said both the leak and the executives’ behavior were unethical. In business, directors have what is called fiduciary duty, which is a legal duty to uphold the interest of shareholders, he said.
However, Shrader was not satisfied the leak justified the tactics allegedly used by the members in the investigation.
“The board of directors have a right to ask directors to uphold their fiduciary duty, the problem is how you go about it,” he said. “Hewlett Packard and Dunn went about it the wrong way.”
Mack said the reason that management resorted to such drastic measures was that it was frustrated and didn’t have many legal paths to take.
She said since the boardroom leak was not a crime, HP would not have been able to get a court order to obtain information. This led to HP overstepping its bounds and using likely illegal methods.
“The tough problem is that the ones that gave information to the press were not illegal to leak information, it’s just bad business,” she said. “So they wouldn’t have been able to get a court to authorize wiretapping because wiretapping can only be done if you’re trying to track down someone like a drug dealer – someone who’s committing a crime.”
There were other ways in which to go about stopping a boardroom leak, Shrader said. He named two methods as education and evaluation. He said that some companies have a process in which the board members evaluate each other. An effective evaluation process would have uncovered the leak, he said.
“The simplest way would just be to clearly educate and inform board members of their duty,” Shrader said.
HP’s current scandal, Shrader said, is most likely a problem with governance and not the whole company.
“Sometimes,” he said, “bad things happen to good companies and I think fundamentally, Hewlett Packard is a good company.”