The Pretext Guest That Wouldn't Leave

By Eric Lundquist  |  Posted 2007-01-16

Like the guest that wouldn't leave, the pretexting scandal which roiled Hewlett-Packard last year continues to dog the company in 2007. In the latest indication that the scandal which touches the highest executive levels in the company has a long way to go before playing out, Federal prosecutors have recently achieved the first guilty plea in the case.

Bryan Wagner, 29, who had been charged with two federal felony counts last week, has admitted he illegally obtained private information on journalists and HP board members as part of a plea bargain. The plea bargain is expected to put pressure on other individuals involved in the case who in the past have indicated they would fight the charges but now might reconsider following Wagner's guilty plea which probably includes a deal to testify for the prosecution.

At the end of last year, Hewlett-Packard agreed to pay $14.5 million to resolve some civil claims with arose from the scandal. In an eWeek article which ran last September, eWeek editor Jeff Burt noted, "Investigators hired by Hewlett-Packard not only obtained telephone records through legally questionable means, but also went as far as to follow reporters and members of the board of directors, including one director traveling to Colorado, according to the company. The disclosure came Sept. 22 during a press conference by President and CEO Mark Hurd, the first time an HP executive has commented directly on the controversy that has engulfed the Palo Alto, Calif., company for the past three weeks." .

The scandal has dogged Hurd and led to embarrassing televised congressional hearings on the matter. The embarrassment is in counterpoint to Hurd's success in being able to provide strategic direction, financial strength and product success following a period of lackluster performance by former H-P CEO Carly Fiorina.

The ongoing scandal and accompanying publicity has resulted in a wide range of legislation being introduced to put an end to pretexting. In pretexting an unauthorized individual uses illegal means to acquire private information. Last Friday, President George Bush signed the Federal Telephone Records and Privacy Protection Act into law. A broader discussion of the legislation can be found here.

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