On the afternoon of October 11, 2006, I received an e-mail message from an organization calling itself the
California First Amendment Coalition. The message header was "Flash: First Amendment and Open Government News," surely something I'd be interested in reading. The body of the message was a re-print of the current lead
article, Vol. 16, no. 16, on the Website of the organization. Clearly marked "COMMENTARY," the title of the article, written by Peter Scheer and dated October 5, 2006, is "FREE THE HEWLETT-PACKARD 5!"
It was upon reading the title and the summary that all kinds of alarms went off in my mind, this despite the references on the Website to reputable places like the UC Berkeley Graduate School of Journalism and downright pseudo-liberal people like Arianna Huffington (see, however, my personal assessment of Ms. Huffington in the article "
Put a Cork in It, Arianna").
This California First Amendment Coalition group looks like such a bulwark of liberalism that the very header graphic on the Website reads: "California First Amendment Coalition: Protecting & Defending the Public's Right to Know."
So what's up with such a fine, upstanding protector and defender of the public's right to know calling for freeing the Hewlett Packard 5?
For those of you not into corporate skullduggery, the 'Hewlett Packard 5' refers to the corporate executives of Hewlett Packard (NYSE:
HPQ) who went so far as to have private investigative types pretend they were other people so they could find out who had told journalists about some of the inside goings-on at HP while it was under the rule of the incompetent former Chairwoman Patricia Dunn and her toadies. Ms. Dunn and four others have been
charged with conspiracy, wire fraud, identity theft, and illegal use of computer data (
People of the State of Calif. v. Patricia Dunn, et al., Santa Clara County Superior Court in San Jose, 06-1027481). The criminal complaint names Ms. Dunn and her chief ethics director and senior legal counsel, Kevin Hunsaker, as well as three people who provided private investigation services that included, in the account at the
Washington Post, "...the use of false pretenses to gain access to personal phone records of HP board members, journalists and their families..." This use of a systematic pattern of oral and written lies to get personal and in some cases private information is sometimes called "pretexting," a term charmingly bland in hiding the venality of the acts. According to that same article in the
Washington Post, the HP cabal even "...devised an unsuccessful e-mail sting to attempt to trick a reporter into revealing her source." Bloomberg.com provides the following
account of the extent of the corporate surveillance operation:
"At least six investigators in Massachusetts, Florida, Colorado and Georgia hired by Hewlett-Packard faked the identities of directors, employees and reporters to obtain their phone records... [P]retexting compromised over 24 different individuals' telephone, fax and cellular accounts... [d]uring 33 months of call monitoring..."
After all that, HP director George Keyworth resigned after admitting that it was he who had been the source of "some" of the leaks from the inner sanctum at the company. Both Ms. Dunn and former HP CEO Carleton "Carly" Fiorina (who is alleged to have been one of the targets of the pretexting)
claim that Keyworth and fellow board member Tom Perkins 'plotted against them' because of the patriarchal culture pervasive at the executive level.
Despite what might be a hollow defense of corporate wrong-doers, the California First Amendment Coalition had my attention. A vigorous, well-sourced refutation of charges like those leveled against Dunn and her alleged accomplices would be worth reading, especially since the criminal complaint was filed by California Attorney General Bill Lockyer, a Democrat who happens to be running for California State Treasurer and has been rumored to have an interest in someday moving into the governor's mansion.
Criticism leveled at prosecutors for political timing is not novel to this case, of course. Down in Texas, former House Speaker
Tom Delay, his attorney, and others have quite vocally made the charge that Democratic prosecutor Ron Earle is using his position in a political witch hunt against the
former Republican powerhouse. If convicted on the most serious charge, that of money laundering, Texas state law specifies that Mr. Delay will spend the remainder of his life in prison. That gives him quite a bit of incentive to use just about any counter-attack, specious as it might be, in his defense. But such attacks on prosecutors' motives should not be roundly ignored, either. Only the naïve would believe that politically ambitious attorneys for local, state, and federal governments have not in the past used their position for their own advancement.
As such, the facts of the particular case at handto the extent those facts can be sorted out from the hail of charges, counter-charges, accusations, and public relations campaignsmust guide the outsider's assessment of the merits both of government claims and the representations of the defendant and his advocates in response. In any event, it can never become a standing or unspoken rule of law enforcement that important people are not to be charged with crimes during election seasons; neither, however, can it become a standing or unspoken rule that prosecutors' motives are off limits as points of vigorous defense.
Without following a speculative tangent about Attorney General Lockyer's true motives for prosecuting Dunn and her alleged co-conspirators, suffice it to note that the accused from Hewlett Packard opened a door on questions of great legal interest: how far can a corporation go in protecting its secrets, and where does the required 'due diligence' of a corporation end and the right of individual privacy take precedence? The California First Amendment Coalition wants to dismiss the second part of that question by holding the focus squarely on the matter of the government's duty not to interfere with journalists trying to get stories from insiders.
If readers just heard what sounded like a forensic grinding sound, that was a debate being shifted interdimensionally without benefit of a slipstream clutch. Note the subtlety: somehow, to protect journalists from the government, government must allow corporations to do whatever they deem necessary internally, thereby relieving the government of much of its need to go after journalists in the first place. Presumably, if companies can create a wall of silence around corporate operations by intimidating employees, journalists will have no one ever willing to speak out of turn. Problem solved: no whistleblowers, no stories in the media; no stories in the media, no First Amendment freedom of the press issues.
Before proceeding to summarily haul the California First Amendment Coalition over the coals, though, I must return to several matters of context in the particular case of Hewlett Packard. Patricia Dunn was no colossus of brilliance in corporate governance; neither, however, was Ms. Fiorina, the former CEO who came in on the wings of the appalling hand-over of Hewlett Packard to Compaq in a "merger" of miserably incompetent unequals. Ms. Fiorina was fired in 2005, perhaps in part as retribution by minority shareholders from the Packard family for her role in engineering the merger. Ms. Dunn's ascendance was on the executive body of Ms. Fiorina. As ABCNews.com
reports, her self-aggrandizing style "...had turned HP into an armed camp," and the leaks from the boardroom started during her tumultuous tenure. Curiously, Ms. Fiorina's previous high-powered corporate gig at Lucent Technologies (NYSE:
LU) ended just before federal enforcement power brought its fist down there. Ms. Fiorina, it should be noted in passing, was
one of the targets of Ms. Dunn's private investigators.The jury may still be out on whether or not Ms. Dunn is largely the victim of mendacious forces aligned against her, but Ms. Fiorina's claims of victimhoodwell stated in her just-released book, "
Tough Choices: A Memoir"are generally met in the corporate world with rolling eyes and barely suppressed grimaces.
However, setting aside the armchair assessment of who was more wretched than whom as head of HP, and especially setting aside Ms. Fiorina's efforts to tie her board-level struggles at HP to those of her successor, there is a human level that needs to be set forth with respect to the matter of charging Ms. Dunn at this particular time. She is suffering from a recurrence of ovarian cancer, having already been a survivor of breast cancer. As much as my professional judgment had from the outset of her ascendance to the chairmanship at Hewlett Packard been generally negativebut with no small touch of relief that, at the very least, she wasn't Carly Fiorinashe then and even now deserves grudging admiration for her sheer will to survive, rise, and flourish in the vicious, sexist, and altogether stylishly brutish world of high corporate power. Dragging a woman to court when she's probably going to suffer greatly and die relatively soon is distasteful to the point of disgusting. Occasions exist when Lady Justice needs to take off her blindfold to see upon whom she is about to wield her sword. Should the trial end in her conviction on one or more of the charges against her, I shall be one to call in the strongest of language for the utmost mercy in her sentencing. No one who is a regular reader of my articles and comments would accuse me of being other than a hard-ass, especially when it comes to meting out justice against the mean, the hateful, and the powerful; but beating the bloodied is repulsive. Readers may take exception to that position, but they shall do so at the risk of that hard-ass side of me coming out for a meal, one that would not exclude a tough look at Attorney General Lockyer.
Having made that point, and returning now to the article by the California First Amendment Coalition, my hope that this group would offer a spirited refutation of the charges against Ms. Dunn and her alleged accomplices was sorely and swiftly put to rest. The summary of the article says it all:
"Corporations must have power to police leaks internally so newspapers will remain free to publish leaks"
That phrase 'police leaks internally' is as worrisome as it is loaded with subtext. Without saying so explicitly, the author of the commentary, Mr. Sheer, is starting off with the assumption that corporations must have internal policing systems with duties beyond ensuring corporate actions are in compliance with the laws of the land. Indeed, Mr. Sheer spends no small amount of space in his commentary describing an internal enforcement system that protects the corporation and its officers and directors. That, in and of itself, is not outrageous at all, provided the internal defenses the corporation deploys are specifically, categorically, and uniformly to the end of ensuring the maximization of shareholder wealth within the bounds of that which is lawful action guided by sound business judgment. In my article, "
Rationality, Incentives, and the Agency Dilemma," I explain that any person, be it an individual, the parties bound in contract, or those working for a corporation, have incentive to act in their own self-interest rather than that of the principal for whose interest they are supposed to be acting; the extent to which they will do so is mitigated only by both the monitoring of the actions and enforcement of the rules under which they are to work. So internal policing within a corporation is altogether reasonable,
but not when the monitoring and enforcement are contrary to standing statutory and/or civil law, and not when the monitoring and enforcement activities are to the end of protecting the officers and directors
personally.
Mr. Sheer in fact makes a valiant attempt to bind blanket protection of internal corporate policing practices to statutory law, itself:
"I start from the proposition that public corporations are allowed to have secrets and to take measures to protect them. A corporate board needn’t function as openly as a city council. Indeed, depending on the circumstances, the disclosure of corporate secrets can be a violation of federal securities laws."
Now we have the
Securities Act of 1934 being brought to bear: regulatory and law enforcement authorities, and obviously then the laws that inform civil and criminal actions against transgressors, must allow a corporation broad latitude to internally police, including, according to Mr. Sheer, the very duty "to force its employees to submit to polygraph tests [as Apple Corp. did]," because of the dangers of insider trading.
Magnificent is the conflation. It is as if the author is claiming that due diligence in the form of vigorous investigation of suspected insider trading is somewhere on the same planet with having the 'director of ethics' and some
Magnum PI wannabes pretend they're who they aren't to find out who's spilling the beans about boardroom discussions. The Securities Exchange Act of 1934 and other relevant Acts of Congress and the several states regulating secondary securities market activities and the actions of participants therein place affirmative burden on public corporations to comply not just in letter, but in spirit. In fact, the term "scheme" is used in regulatory language to convey the broad latitude the Securities and Exchange Commission and the state securities regulatory agencies have in considering what constitutes lawful versus unlawful activities, including those by the directors, officers, and other insiders of a public corporation. This, however, is not in any way related to the chairman of a public corporation authorizing and directing private investigators to go out and lie to get information about who is telling boardroom "secrets."
In fact, Ms. Dunn's conduct goes to the heart of the matter of that over-used but still profoundly important word "transparency": a board of directors, the executive officers of a corporation, and even legal counsel to the firm may see behind-closed-doors discussions as meriting all the privacy in the world; but the outside observer, especially a shareholder sensing inadequate transparency, could see matters very differently. For all the lip service modern corporations give to the pre-eminence of their shareholders, many of those corporations behave in ways that are truly appalling to those who have little or no voice in director-level decision making, as is evident from the outrageous compensation packages laid at the feet of executive officers whose performance at the helm would have gotten them fired were the relationship between compensation committees, decision-makers on the board, and the executive beneficiaries not so incestuously tight and non-transparent. By virtue of its egregious offenders, corporate America has taken off the table any presumption of a "right" to have "secrets" other than those directly having to do with proprietary technologies, in-process negotiations, and access to uncertified financial information.
The mere presumption or declaration that some boardroom or executive-level matter is a "secret"
cannot take precedence over the public's right to know: it is that public that claims at least some degree of ownership if a corporation poses to benefit from "public corporation" status with respect to broad access to capital markets.
Here's the distillate from this corporate lawyer dream world being promoted by the California First Amendment Coalition.
Let corporations do their own 'internal policing' as they see fit because they can get the job done better. The Bill of Rights circumscribes government actions against citizens, not the actions of private entities like corporations. Sometimes, courts go so far as to take that constitutional stuff seriously when it comes to the government trying to deny rights enumerated in or constructed from the Constitution; therefore, it's best to remove the entire line of defense about "rights" someone might have.
Probable cause? Not needed. If we've heard a rumor about you, to the back room for a polygraph test you go. Just be glad we're more civilized than the government about getting the truth out of you.
Unreasonable search and seizure? Sure. We can do whatever we want because the corporate offices belong to us. Actually, if you work for us, you do, too, but we'll let you go home most nights.
Lie to get information? No problem. We're protecting those shareholders we love so much. Anyway, it's all about compliance with Sarbanes-Oxley (otherwise known as the Securities Lawyers' Revenue Enhancement Act).
Due process? Where's that written in our corporate by-laws?
Presumption of innocence? Like we'd ever make a mistake.
Freedom of speech? Not if you've ever been on our payroll.
Freedom of the press? Absolutely! Like anyone who's ever worked here is going to rat on us after we've made examples of a few troublemakers.
The California First Amendment Coalition deserves credit: they've done their best to construct a false choice between a specific constitutional right, freedom of the press, and a broad right of citizens not to have private corporations for which they work spy on them using means the courts would have to approve before the government could do the very same things.
It is, however, on its face nonsense; but it is also the troubling and persistent mentality of the corporate world that labor is just one more factor of production to be used, abused, and discarded as necessary without the interference of laws that might insist that people are citizens first, and the rights and liberties
all of the themthey carry as such citizens are not and cannot in any way be waived when they give a company the privilege of their productive effort.
At a congressional hearing last week, Hewlett Packard executives, former executives, and security experts
testified about the snooping done by the company at Ms. Dunn's behest. The gruesome eight hours of testimony by Dunn and others left members of both parties at times incredulous and at other times outraged. Stalled efforts to bring corporate spying of this kind under control will likely be re-invigorated, particularly because the hearing made it very clear, in the words of privacy consultant Robert Douglas, "[T]he biggest buyers (of pilfered phone records) are attorneys, corporations, banks, finance agencies, car financiers — the business community."
(And, yes, these outraged congressmen are of the very same U.S. government that is engaged in a massive, wholesale, unlawful campaign of spying on U.S. citizens without any court oversight whatsoever, so the irony of their outrage is so deliciously palpable that it should have a gag warning attached to it.)
Corporations will forever presume that any effort by the government to circumscribe internal practices constitutes an unacceptable burden upon the right to conduct operations in the most efficient way possible to maximize shareholder wealth. Theirs will permanently be the position, expressed or implied, that they as the employers by nature have the right to grant and deny privileges as a consequent application of business judgment, and one such discretionary 'privilege' is employee privacy. Their occasional claims that the well-being of their employees is so crucial to success of the enterprise notwithstanding, the backdrop of corporate treatment of its workforce is instilled with the mentality that people are hired and retained as a favor to those so graced. Most employees see it that way, too: there exists no "right" to have the job, and from that presumption then logically flows the conclusion that virtually nothing about the job is infused of prior rights other than those clearly set forth in law, and only then in law vigorously, pervasively, and consistently enforced.
It is, then, the permanent duty of the government through legislation, regulatory oversight, and the courts to ensure that worker abuses by corporate America are held in check and those representing the interests of corporations are resolutely, swiftly, and severely punished when their wholly expected attitudes contrary to relevant law become expressed in action, as happened in the case of Hewlett Packard. It is, then, only when the government re-asserts itself as the unwavering guarantor of the rights of workers
by virtue of their citizenship in a free country that corporations will have even the hint of incentive not to act as the officers and directors at Hewlett Packard did.
Unfortunately, that commitment by government first, foremost, and always to serve its citizens will first require that the United States government fully reconstitute its
own understanding that the people of this country have the fundamental, inalienable right to be left alone.
The Dark Wraith has spoken.
<< 13 Comments Total
Yikes, that's one scary looking mofo. Those teeth....
I modeled them after my own.
The Dark Wraith knows scary.
Hiya Dark Wraith.
Tee hee hee - I wouldn't mind finding a costume like that! :)
Great graphic!
great graphic, oh dark one... but I don't think that they are going to lose.
"...but I don't think that they are going to lose." -- BlondeSense Liz
Liz, PoLT is still harboring suspicions that the Republicans are trying to lose, or, simply don't care if they lose their majorities, thus enabling them to blame the oncoming social, economic, and environmental disasters on the Democrats. Indeed, what better way to retain the presidency in '08?
Trick or Treat?
Hand over the candy and no one gets hurt. Don't hand over the candy and this raw egg lands right in the middle of your computer screen.
HAPPY HALLOWEEN
:)
My goodness, that is creepy.
Good work. :)
@blondesense - I believe you got it right. We will pick up a few seats - but that's about it. They will steal the rest. The republican criminals are so arrogant, I just can't see them giving up power - plus it will put them at potential risk of receiving some long overdue justice.
@pop - i thought you retired from political life?
@peteroflonetree - then again, I don't put anything past these crazy b*stards - you might be right as well, but based on their phenomenal arrogance and past actions, I'm betting on the former.
DW - thanks for another awesome graphic.
Everyone please consider visiting http://shoutwire.com and shouting some of the important news articles that I've tried to bring more attention to.
-rcg
Hey Mike, uh, daddybear, I read your comment on the dirt and want to say that I was only joking about being published - of course, I knew that it was just a little nothing site that "published" my "letter".
And yes, my blog has no commentors, I haven't promoted it and I've been using it mainly as an online diary. BTW, in my private life I am a published and well read author. Just like your private life surprised me - you would be surprised at what I have accomplished.
Anyhoo, I thought you were better than to say such things about me. I thought you were a friend. My mistake.
Uh... who's daddybear?
The Dark Wraith is getting lost on his own blog these days.
[I simpy MUST keep better schedule with my vitamin supplements.]
Daddybear, isn't you? If not, then I perhaps I have been receiving emails from someone who is pretending to be you? If you want I will forward them to you (minus any personal details - because forwarding that wouldn't be right). Let me know.
Ann Coulter's alleged fraudulent voter registration might be referred to the Florida State Attorney General tomorrow.
It's only November, and Christmas is already in the air.
As much as I think the perra should do a live Burning Man impersonation I don't think this potential scandal will anything but help feed its notoriety - more likely to make it a martyr with the 30 percenters.
We can alsways hope though, that it vanishes into obscurity.
Good afternoon, rcg.
No, that's not me, but if someone is inappropriately using my trademarks, copyrights, or other proprietary works and representations, or is otherwise misrepresenting me, I can assure you that I have some really delicious attorneys who will change the person's life forever and ever.
The Dark Wraith is still trying to figure out what's going on, though.