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HP Government The Courts The Almighty Buck News

HP Pays $14.5M to Make Civil Charges Disappear 107

Posted by CowboyNeal from the throwing-money-at-the-problem dept.
theodp writes "The California Attorney General's Office negotiated a $14.5 million payoff from HP as part of a settlement that calls for the state not to pursue civil charges related to the now infamous spy scandal against the company and its current or former officers or directors (felony criminal charges against five individuals still remain). HP also agreed to maintain the watchdog positions of chief ethics officer and chief privacy officer for five years."
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HP Pays $14.5M to Make Civil Charges Disappear More

HP Pays $14.5M to Make Civil Charges Disappear

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  • Corruption (Score:4, Funny)

    by heneganj ( 786136 ) on Friday December 08, 2006 @06:16AM (#17160316)
    And I thought corruption only occurred on HP CD burners.
    • That's the thing about California - they have the best government money can buy.

      • Settlement is common in civil cases! (Score:5, Interesting)

        by denebian devil ( 944045 ) on Friday December 08, 2006 @08:48AM (#17161228)
        The summary is very misleading in the way that it describes HP as paying money to make the case disappear. This wasn't a criminal case where they were buying off a judge to rule favorably. This was a civil matter. and 99 times out of 100, civil matters are about one thing: money. They can either pay money in the settlement, pay money as a result of a judgment from a trial, be dismissed through a motion, or be found not guilty from a trial. Settlement is COMMON, because it allows both sides to save costs from not having to pay for a costly trial. And trials are MUCH more costly than most of what happens pre-trial.

        This isn't some back-alley dealing, it's one legitimate and often used method of resolving civil disputes quickly and cost-effectively. And on top of that, it means that HP can't appeal the decision because they agreed to it. If the case had gone to trial and verdict and resulted in a decision HP didn't like, they could have appealed and kept the case going for years without resolution, while at the same time increasing both their costs and the costs of the state in trying the case.

        • Re: (Score:2)

          by ari_j ( 90255 )
          Other than saying "not guilty," which are words that only apply to a criminal case, you are spot-on. I am really irritated by the article summary here. HP didn't negotiate a "payoff," it didn't "make ... charges disappear," and so forth. It settled a lawsuit, and it settled for a substantial sum of money. There's nothing illicit about this at all.

        • The summary is very misleading in the way that it describes HP as paying money to make the case disappear. This wasn't a criminal case where they were buying off a judge to rule favorably. This was a civil matter. and 99 times out of 100, civil matters are about one thing: money. They can either pay money in the settlement, pay money as a result of a judgment from a trial, be dismissed through a motion, or be found not guilty from a trial. Settlement is COMMON, because it allows both sides to save costs from not having to pay for a costly trial. And trials are MUCH more costly than most of what happens pre-trial.

          And the upshot for the State of California is that that a) they don't have to waste money pursuing the suit and b) they now have some cash to help pay off their staggering deficit. Normally I'd say put HP's feet to the fire, but I think here the Governator is being pragmatic and actually doing something to help his state in the long run.

          • Normally I'd say put HP's feet to the fire, but I think here the Governator is being pragmatic and actually doing something to help his state in the long run.


            You mean Attorney-General Bill Lockyer, the independently-elected statewide Constitutional officer responsible for the settlement, who isn't even from the same party as the "Governator", right?

        • This isn't some back-alley dealing,

          Settling without an admission of guilt is back-alley dealing, no matter how common it might be in civil litigation. (And I'm not fond of nolo contendere in criminal law, either.)

          For the public good and the purposes of justice, guilt is as important as imposition of a penalty. The harm done has to be, in old theological terms, publicly "repented". The attachment of a designation of guilt makes it unarguably clear that the perpetrator understands it's got some reforming t

          • Re: (Score:1)

            by nomadic ( 141991 )
            In this case? HP did nothing wrong, just ask 'em.

            What are you talking about? They very publicly apologized through multiple press releases, they fired several of their executives, and agreed to an injunction (which is definitely losing from a legal standpoint). There's no dispute on anyone's part, even HP's, that they definitely did something very wrong.

            • Ah, you're talking in a PR sense. I meant in a legal sense, the only sense that matters to corporate overlords.

              A more precise formulation is "HP did nothing illegal, just ask 'em." And if legislative developments continue as they seem to be shaping up, future instances of this behavior will continue to be legal, just ask 'em.

              • Re: (Score:2)

                by nomadic ( 141991 )
                Ah, you're talking in a PR sense. I meant in a legal sense, the only sense that matters to corporate overlords.

                You don't think PR matters IMMENSELY to corporate overlords? HP is taking a very public hit on this, and the settlement agreement is quite public as we can all see.

                But I dunno, I'm a lawyer so maybe I have a skewed view of it; I don't see having a judgment against you that big a deal. Civil wrongs aren't crimes, and every large company is going to have plenty of judgments against it on the
            • Ever heard of the old saying "An Eye for an Eye"?

              It was an idea put forth during the time of waring families, and it was intended to see to it that if you tore out the eye of the son of your enemy, your own son would have his eye torn out, not to punish your son, but to make sure there was no advantage to be had by violating the social order.

              HP engaged in covert espionage. Who knows what they found out?

              There shouldn't be any money paid to the government here.

              HP should have their entire communications struc
              • "It was an idea put forth during the time of waring families....no advantage to be had by violating the social order."

                More accurately it was one of the laws given by God to the israelites. A pattern for ultimate justice in those times:
                Exodus 21:23-27
                "[23] And if any mischief follow, then thou shalt give life for life,
                [24] Eye for eye, tooth for tooth, hand for hand, foot for foot,
                [25] Burning for burning, wound for wound, stripe for stripe.
                [26] And if a man smite the eye of his servant, or the eye of his ma
                • No, it was an idea with a specific type of social merit that was propagated to the masses through religion.

                  The chicken or egg question of "was this particular idea chosen for this religion based on this social merit" or "did this religion survive where others failed based on their co-incidental adoptation of this social value" is something for historians to answer.

                  All the religions are full of this type of stuff, looks like mumbo-jibberish that you accept as part of a religion and rationalize away as metaph

          • Re: (Score:2)

            by emc ( 19333 )
            Agreed.

            This whole thing just cost HP a little under 100 minutes of revenue, based upon their prior years revenue of nearly 92 billion dollars.

            They got off easy. This will set a precedent for any criminal process in this issue.

        • Re: (Score:3, Insightful)

          by timeOday ( 582209 )
          This was a civil matter. and 99 times out of 100, civil matters are about one thing: money.
          And I guess the responsible executives at HP will be personally responsible and pay from their own pockets, right? I mean, they make millions of dollars because they're practically gods walking the earth, so on the rare occasion they do fall short of perfection, I suppose they'd be the first to bear the consequence of their own personal choices.
          • If individual executives cost HP $14.5 million, and are not punished by the board (either financially, or career-wise), then the shareholders need to get a new board. I'm not saying this is likely to happen (good old apathy), but it is the process by which the individuals should be punished: HP representatives piss off the state on behalf of HP, the state punishes HP, HP punishes the individuals that represented it.
          • And if you write a line of code that doesn't do what it's supposed to and it costs your employer $2M by the loss of a big client who's system crashes unexpectedly on them, you're going to pay that out of your pocket, right? Because it would only be fair.

            Face it, that's not the way the world works. Corporations are a limited liability entity to shield individuals from this kind of financial ruin.

            If you screw up and it costs your employer millions of dollars, you should expect to be out of a job and to have
        • FTFA:

          But the PC maker said that as part of the deal, the state will not pursue civil charges against the company, or against its current or former officers or directors.

          So these crooked corporate executives make the decision to have their company settle out of court. That is, as you pointed out, quite common for civil cases.

          But as part of the deal (which, again, involves the company paying money), those same corporate executives now avoid personal civil charges. That doesn't seem right. They are gettin

          • I'd doubt there's anything in the settlement that precludes the shareholders themselves from taking action against the responsible parties, so I don't think they're quite off the hook yet. I very much agree with your underlying point that the corporate veil enables people to avoid bearing responsibility for their actions in a great many cases though.

          • So these crooked corporate executives make the decision to have their company settle out of court.

            I find it amusing that you quoted the article but somehow managed to neglect this, also from the article: "The case is separate from the felony criminal charges [com.com] that have been brought against five individuals."

            Also bear in mind that the executive most responsible, chairman Patricia Dunn, is now a former employee, and is one of the five currently under indictment for the four alleged felony counts — f

            • I find it amusing that you quoted the article but somehow managed to neglect this, also from the article: "The case is separate from the felony criminal charges that have been brought against five individuals."

              And I find it amusing that you failed to notice the three times that I wrote "civil" in my post.

              So much for "getting off scot-free."

              Read my post again. I wrote, "They are getting off scot-free (on the civil charges, anyway)."

        • Re: (Score:2)

          by mspohr ( 589790 )
          It should also be noted that this payment for the civil case does not make the criminal charges against the HP board members go away. They are still facing criminal charges.

          • criminal charges against the HP board members

            Aside from former HP chairman Patricia Dunn, the other four charged [com.com] were actually Kevin T. Hunsaker, HP's former senior lawyer; Ronald DeLia, a private detective; Matthew DePante, of data-brokering company Action Research Group; and Bryan Wagner, a Colorado man believed to have been an employee of Action Research. Not much from the board per se, but the charges seem to cover the responsible parties.

  • Comment removed (Score:4, Funny)

    by account_deleted ( 4530225 ) on Friday December 08, 2006 @06:38AM (#17160388)
    Comment removed based on user account deletion

    • Re:Heh (Score:5, Funny)

      by Harmonious Botch ( 921977 ) * on Friday December 08, 2006 @06:46AM (#17160434) Homepage Journal
      Back pocket? You're assuming that she still has her pants on?

    • Re:Heh (Score:4, Insightful)

      by Dhalka226 ( 559740 ) on Friday December 08, 2006 @07:13AM (#17160572)

      I'm not really sure what the big deal here is. I'm all for routing out corruption and all that jazz, but this is an issue of civil law. They settled the case. This happens dozens, maybe hundreds of times per day in civil cases; 90% of civil cases never reach a verdict.

      The fact that the article submitter chose to spin it as a "payoff" doesn't magically make it a bribe. Call me when they pay $14.5 million and get the criminal charges dropped and then I'll hoot and holler about corruption and greed in America with you. Until then, this is a total non-issue for me. The settlement may be a little bit on the low end, but then again I'm not too terribly disappointed that they didn't waste taxpayer money to pursue both a civil and criminal trial over basically the same charges/complaints.

      • I'm all for routing out corruption and all that jazz, but this is an issue of civil law.

        They're in high dudgeon and don't want to be confused with facts.

      • Even for the civil charges, that amount is a drop in the bucket for HP.

        • No argument there.

          I don't believe this settlement would preclude the individuals who got their information pretexted from filing their own individual lawsuits. And, as stated before, many of the people involved in the scheme still face criminal charges. I think that would cover the punishment aspect of justice.

      • This happens dozens, maybe hundreds of times per day in civil cases; 90% of civil cases never reach a verdict.

        "The percentage of tort cases concluded by trial in U.S. district courts has...declined from 10% in the early 1970s to 2% in 2003." Civil Justice Statistics [usdoj.gov]

    • She can look at her own back pocket? I haven't looked at that statue in awhile, but I don't remember it's neck being a GIANT SLINKY!
    • "Land Of The Fee"
      Isn't it nice to know that justice is affordable, only $14.5 million
  • Qualifications:

    ETHICS OFFICER
    1. Own fancy suits
    2. can swat people with rolled-up newspaper while shouting "BAD KITTY, BAD!"
    3. will hunt down and execute people responsible for deep-sixing the good RPN calculators.

    PRIVACY OFFICER
    1. Own fancy suits
    2. can swat people with rolled-up newspaper while shouting "NO LOOKING!"
    3. will institute manditory privacy screens for erotic interweb browsing.
    • "will hunt down and execute people responsible for deep-sixing the good RPN calculators." testify brother testify - where do I apply.

  • A nice comparison... (Score:3, Insightful)

    by rallycellie ( 1031068 ) on Friday December 08, 2006 @06:46AM (#17160438) Journal
    Here in holland, where bikes are stolen as a kind of national sport it would be like: Steal 1 bicycle. get caught, go straight to jail. Steal a hundred bicycles, get caught, return 5 of them, say you are sorry, and that it was too easy and get a 'responsible citizens award' because you cooperated with the law.
    • Oh you mean the ones that make the flying Pigeon from china look high tech - weigh an absolute ton and you have to peddle backwards to brake.

      I thought the people stealing them where performing a comunity service by removing a healthrisk :-)

    • Re: (Score:3)

      by TFloore ( 27278 )
      The more I see how corporations in America act, the more I think of our old buddy Joseph Stalin.

      "A single death is a tragedy, a million deaths is a statistic."

      A lot of corporate activity in America seems to be run with that as a guiding principle. Do something on a big enough scale, and it stops being bad, and simply becomes... unethical, but not actually illegal? And if it is done by a committee, no single person actually makes a decision, so it isn't even unethical.

      Of course, this also goes back to the si

  • Buying injustice... (Score:5, Interesting)

    by Justen ( 517232 ) on Friday December 08, 2006 @06:52AM (#17160470) Homepage Journal
    The case did only involve a civil complaint, so it probably would have ultimately ended up with a financial settlement and some sort of compromised "corrective" measures like we see here, but I really think this is an injustice for the people who had their identities and privacy compromised, and for HP shareholders in the long run. The evidence that senior executives at HP, potentially including Mark Hurd, either ignored or were ignorant of the ongoing, "probably illegal" actions [washingtonpost.com] is pretty well documented, and pretty overwhelming.

    Patricia Dunn took pretty much all the heat for this, and that's unfortunate for her and HP. It seems to me like she should have had a better grip on what was happening at HP, but it doesn't seem to me like she should have been the only one with that responsibility. A full, objective, and independent investigation should have been the first think on everybody's list. Instead, this case is now settled, Congress has moved on, and Dunn will be focussed on proving her innocence.

    The unfortunate thing for Mark Hurd is that his level of responsibility and accountability wasn't determined in this process. The second HP hits a performance blip, this scandal will be the first thing on every shareholder's mind when they're thinking of who to blame. When that day comes, I wouldn't want to be in Mark Hurd's shoes.

    --
    justen
    justen.blogspot.com [blogspot.com]

    • Re:Buying injustice... (Score:5, Insightful)

      by wannabgeek ( 323414 ) on Friday December 08, 2006 @06:58AM (#17160492) Journal
      I really think this is an injustice for the people who had their identities and privacy compromised, and for HP shareholders in the long run.

      Well, the shareholders do not seem to mind. In fact, the market is relieved that their company got away so lightly.

    • Re:Buying injustice... (Score:4, Informative)

      by Otter ( 3800 ) on Friday December 08, 2006 @08:09AM (#17160844) Journal
      ...but I really think this is an injustice for the people who had their identities and privacy compromised...

      AFAICT, they can certainly still bring civil action, shareholders already are suing, the SEC is investigating and criminal charges are still on the table. Basically, HP paid a fine to avoid the risk of a larger fine, as is completely routine.

      I'd wonder where "theodp" and CowboyNeal are getting their bizarre spin on this from if I didn't know that most of the people here still don't understand the difference between criminal and civil law, despite spending every day ranting about legal proceedings.

    • Re: (Score:3, Insightful)

      by NDPTAL85 ( 260093 )
      Mark Hurd is the guy who turned HP around. After their many many under-performing choices for CEO pre Hurd they know how hard it is to get a competent guy in the top job. They're not going to be getting rid of Hurd anytime soon.

    • Re: (Score:2)

      by iabervon ( 1971 )
      This was largely an internal HP thing; half of the people spied on are on the HP board of directors. They're not going to want to mire the corporate entity in litigation. As far as reforming HP, shifting the balance of power to the people who were spied on is far more effective than any sentence that could be carried out on humans.

      And the criminal cases are unaffected. That's what matters in the end; this was a case of criminal behavior by individuals in control of a company, not corporate policy.

    • The case did only involve a civil complaint, so it probably would have ultimately ended up with a financial settlement and some sort of compromised "corrective" measures like we see here, but I really think this is an injustice for the people who had their identities and privacy compromised, and for HP shareholders in the long run. The evidence that senior executives at HP, potentially including Mark Hurd, either ignored or were ignorant of the ongoing, "probably illegal" actions is pretty well documented,

  • Chief Ethics Officer? In a company like HP? That's going to be a boring job.

    On the plus side, I guess you can have "CEO" on your business cards.

    • Re: (Score:1)

      by remmelt ( 837671 )
      Yes! And CPO is kind of like a version 0 of C3PO, so that would be cool too!
    • For some reason slashdot requires the facts to be stated and restated in multiple posts without actually changing anyones opinion on anything (mostly because they read only what confirms their own worldview anyway).

      You should applaud HP for this. They settled for a civil suit. not criminal, civil. They said they were wrong. They are making amends. They are instuting policies to not let it happen again. However much you trust the effectiveness is irrelevant. You keep an eye on them if you're that worried. Th

      • For some reason slashdot requires the facts to be stated and restated in multiple posts without actually changing anyones opinion on anything (mostly because they read only what confirms their own worldview anyway).
        Apparently you dont know about NCR after AT&T with respect to the leadership under Nyberg. Carly seems to be off the radar as well. Nor do you seem to remember how far they went to keep her.


        However much you trust the effectiveness is irrelevant. You keep an eye on them if you're that worried.
  • It's not just HP that do this kind of thing, it's what Governments (your servants) are up to all over the world every day.
  • HP also agreed to maintain the watchdog positions of chief ethics officer and chief privacy officer for five years

    but the Scientologists had (have?) a Watchdog Committee and Ethics Officers and we can all trust them now can't we...
  • What I don't understand is - whose coffers does the money go to? How is this money then used? Why does the company have to pay the state or whoever $14.5 million dollars for something that was, though illegal, done internally in the company. It did not affect any external parties, the state etc. And what does the article mean by The AG's office 'negotiated' a settlement?
    Sounds like open bribes to me ... but what do I know?
  • Thats ridiculous - the shareholders must pay for the directors' irresponsilibity?

    And since when was it possible to settle criminal cases! ridiculous

    nuke california
    • Yes, the shareholders elected the Board. So ultimately you pay for your bad choice (assuming you're a shareholder). Now, if you (as a shareholder) want to go after the individual Board members, have at it.

    • Re: (Score:1, Informative)

      by Anonymous Coward
      Thats ridiculous - the shareholders must pay for the directors' irresponsilibity?

      Uh, yeah. It's called "ownership". You own (part of) the company, you take (part of) the risks. Those risks include the possibility that your asshat employees (including your board) will screw you.

      And since when was it possible to settle criminal cases! ridiculous

      Jesus, not only didn't you RTFA, you didn't even read the /. post. It was the civil case that was settled. Criminal charges are still in play.
    • <blockquote>Thats ridiculous - the shareholders must pay for the directors' irresponsilibity?</blockquote>

      Yes, the shareholders pay for their directors' irresponsibility. This makes the shareholders responsible for the choice of directors. (Of course, the shareholders are free to sue the directors for violating their obligations to the shareholders.)

      <blockquote>And since when was it possible to settle criminal cases!</blockquote>

      This wasn't a criminal case; the criminal cases against

  • Before all the knee jerk reactions start (too late for that) stating this is unfair or a travesty of justice, it is not. This is simply an out of court settlement for a civil case. Anyone could have done the same thing.

    For example: My neighbor wants to sue me in civil court for some perceived wrong doing. I go to my neighbor and say "Listen, instead of dragging this thing to court why don't I pay you X sum of money and agree to not do it again." My neighbor could accept the settlement and be done w

  • Revised definition (Score:4, Insightful)

    by BCW2 ( 168187 ) on Friday December 08, 2006 @08:55AM (#17161308) Journal
    When did impersonating a law enforcement officer get redefined as "pretexting". The former is a criminal offense and the latter is revisionist bullshit. There should be criminal charges for every person involved in this idiotic farce.
  • The appointment of a Chief Ethics Officer means you'll need to complete online training every year to ensure that you understand the ethical dimensions of your job.

    Here's an example verification, which I found by hacking one of the servers:

    Suppose a supplier offers to bribe you with a pair of World Series tickets to increase your purchases from his company. Should you:

    a) Say yes! Baseball is America's game, and give-and-take is good business.

    b) Refuse the offer and report the incident to top management

    c) A
  • stupidity. Jeez folks, how bout we find a moderator that at least understands what CIVIL case means.
  • It's not because this person got spied on, it is because the people in charge at HP were willing to spy on her. Here in the US, the republicans that have been in power for the last 4 years have believed that regulating companies was bad and that people should do it with their wallets. That is what I am doing. HP showed me their lack of morality, I am going to show them and other corporations that I don't tolerate that. I know that I am just one person, but I figure that there are probably a bunch of oth
  • As an ex-HP employee, I wish that they could get rid of their many layers of largely bad management for a paltry sum of 14.5 million. It would be cheap at twice the price.
  • "HP also agreed to maintain the watchdog positions of chief ethics officer and chief privacy officer for five years."

    Especially because their previous one (and also their general counsel) were involved in the pre-texting scandal ...
  • The California Attorney General's Office negotiated a $14.5 million payoff from HP as part of a settlement that calls for the state not to pursue civil charges...

    I guess everyone has their price. Perhaps someone can calculate what percentage of HP's net worth is $14.5 million so others could use that same percentage to settle their civil suits with CA ...

    I'm guessing it would be *very* affordable. :-)

  • 14.5 million???? That's *IT*???

    But then, this is the most corrupt state in the union, what more do you want? *shakes head*
  • Clearly not those who are responsible!

    THe fine gets paid by the shareholders and customers and perhaps a few low level employees who get fired. The fine is not paid by those who are guilty.

  • settlement fund (Score:1, Interesting)

    by Anonymous Coward
    --
    As part of the settlement [...] HP will "finance a new law enforcement fund to fight violations of privacy and *intellectual-property* rights"
    --

    So... HP is to give money to RIAA/MPAA?

  • meaningless settlement. (Score:3, Funny)

    by swschrad ( 312009 ) on Friday December 08, 2006 @05:30PM (#17168090) Homepage Journal
    HP burns 11.5 million dollars on shredder oil per year. this settlement means nothing to HP, which remains the poster boy for no ethics in business for spying like Putin.
  • The entity HP is a company name employing thousands selling billions. The guilty party is a fired executive and a few fired co-horts. Should the Company name suffer forever because one of the many people to hold a certain position was a crackpot? The company name HP can not be corrupt because it is just a name. Oh yeah, and the illuminati is a farce.

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