HP Board Private Investigators

Hewlett Packard Board Using Private Investigators

Hewlett Packard logoThe boardroom spying scandal at Hewlett-Packard has made headlines all over the country.

Revelations that private investigators hired by the company to stem media leaks conducted covert surveillance on board members and journalists and obtained their private phone records under false pretenses have sparked congressional hearings and criminal indictments.

But here in Corvallis, home to thousands of current and former HP workers, some are saying it shouldn't come as a surprise that the global tech company has used private eyes and other cloak-and-dagger methods to keep a watchful eye on its own employees - or even to sneak a peek at what its competitors are up to.

"People are shocked by this pretexting thing," said Thomas Kraemer, who retired in 1998 after a 20-year career with Hewlett-Packard. "(But) no one has pointed out the fact that corporate security is pretty common."

The first time Kraemer became aware of HP's use of private investigators was in the late 1980s, during a three-year tour of duty at the company's headquarters in Palo Alto, Calif. - the heart of Silicon Valley. One of Kraemer's employees was fired after HP executives determined he had been passing sensitive business information to a rival tech firm. "They had hired private investigators to tail this guy," Kraemer recalled. "They had tailed him driving into this competitor's plant."

Kraemer remembers being shocked - not by the fact that an employee was terminated for spilling company secrets, which he said was clearly a firing offense, but by the means used to catch him. Kraemer's supervisor, however, told him not to be naive.

"He just looked at me and said: Well, welcome to the Bay Area."

A few years later, Kraemer learned another lesson about corporate espionage the HP way.

He was managing a Hewlett-Packard division in Colorado Springs that made microprocessor emulators, diagnostic machines that sold for around $30,000 a pop. HP executives, Kraemer said, were trying to decide whether to invest in a new product line but first needed to know how strong a particular competitor was. They turned to a private investigator to get the job done. "HP hired a firm that literally hired a guy to sit outside a parking lot and take (car) license numbers down. He tried to create an employee list," Kraemer said. "We wanted to ferret out whether they were growing or shrinking."

Two other former HP employees, who asked to remain anonymous for fear of losing company benefits, said they were too junior to be privy to information on corporate investigations. But both noted that Hewlett-Packard goes to great lengths to protect company secrets, keeping close tabs on who goes in and out of the plant, restricting access to sensitive documents and monitoring employee computer use.

"We used to get lectured all the time about not leaking information. � We got scared that we couldn't say anything to anybody," one ex-employee said. "Routine employee surveillance is happening all the time," said the other.

But Greg Merten, a longtime manager who retired in 2003 as vice president and general manager of the inkjet division, disputes that assessment. "I was never involved once in any kind of employee investigation," he said. And he ridiculed the idea of counting cars in a competitor's parking lot. "If that's what I have to do to make my business a success, then I have my head in the wrong orifice of my body," Merten said. "I never heard of anybody doing anything like that in my 32 years at HP."

Nevertheless, private investigators are widely used by large U.S. corporations, according to a managing partner with a large California-based corporate security firm. "We have a client base of about 500 companies, and many of them are Fortune 100 firms," said Kent Perkins of Diversified Risk Management. His company, he said, is frequently asked to look into cases of suspected employee misconduct, usually involving theft, drug abuse orworkers' comp fraud. Situations like the ones Kraemer described, he said, are rare but not unheard-of and are probably perfectly legitimate - as long as the license plate numbers were not used to collect private personal information.

But Perkins said he's mystified at how a reputable company such as HP could have crossed the line from routine, widely accepted surveillance practices into pretexting and spying on reporters and directors.

"I've never had a situation where we've been asked to conduct surveillance of a board member or a journalist," Perkins said.

And while that sort of surveillance can be conducted legitimately, Perkins said, there's simply no excuse for pretexting: "It's unethical, probably illegal and absolutely unnecessary." Had his firm been asked to investigate Hewlett-Packard's board leaks, Perkins said, it would first have asked the directors to voluntarily come clean about their discussions with the press. Failing that, it would have asked the directors to sign a release for their private phone records.

"They had lots of options they didn't explore," Perkins said. "I wish they'd called me."

Read the original article which quotes Kent Perkins.