Hewlett Packard to pay $14.5 million pretexting
By Jason Bennert, Bay City News Service
December 7, 2006
California Attorney General Bill Lockyer announced today that
Hewlett-Packard has agreed to pay a $14.5 million civil settlement
stemming from the telephone pretexting scandal.
Under the terms of the settlement, HP will pay $13.5 million
to create a new "privacy and piracy fund'' in the attorney
general's office which will be used to finance state law enforcement
efforts in the areas of privacy and intellectual property violations.
The company will also pay $650,000 in civil penalties and $350,000
for the attorney general's office costs.
"The Hewlett-Packard incident has helped shine a national
spotlight on a major privacy protection problem,'' Lockyer said
in a statement. "With its governance reforms, this settlement
should help guide companies across the country as they seek to
protect confidential business information without violating corporate
ethics or privacy rights.
"The new fund will help ensure that when businesses cross
the legal line they will be held accountable. Fortunately, Hewlett-Packard
is not Enron. I commend the firm for cooperating instead of stonewalling,
for taking instead of shirking responsibility, and for working
with my office to expeditiously craft a creative resolution,''
HP has also agreed to increase the oversight responsibility of
its chief ethics officer and to other structural reforms.
The settlement does not affect the pending criminal charges against
former HP board of directors chair Patricia Dunn and four others.
HP has admitted that earlier this year it hired private investigators
to obtain the personal phone records of its board members and
several journalists in an effort to determine who was leaking
information about the company to the media. The private investigators
used a tactic known as "pretexting'' in which individuals
falsely portray themselves as the owner of a particular phone
number and use personal information about the number's owner,
such as the last four digits of a Social Security number, to obtain
the records of that phone number.
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