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Kevin Hunsaker Has a Problem

October 6th, 2006 by David Kronemyer · 1 Comment

To me, one of the more interesting aspects of the current Hewlett-Packard imbroglio is the role played by Kevin Hunsaker, an attorney with HP’s law department. Hunsaker had the grandiose title of “chief ethics officer,” which is pretty vague. It suggests, among other things, that there are subordinate ethics officers, too; for all we know, there was a whole staff of ethics officers, presided over by Mr. Hunsaker.

Hunsaker was the author of a fabulous e-mail. Hunsaker had asked Anthony R. Gentilucci, HP’s “manager of global investigations,” about what was going on. Gentilucci was pals with Ronald R. DeLia, who owned a company called Security Outsourcing Solutions. Gentilucci had hired Security Outsouring Solutions, and DeLia, to handle the job. Referring to DeLia, Hunsaker e-mailed: “How does Ron get cell and home phone records? Is it all above board?” Gentilucci responded that DeLia had investigators “call operators under some ruse.” Gentilucci also wrote: “I think it is on the edge, but above board. We use pretext interviews on a number of investigations to extract information and/or make covert purchases of stolen property, in a sense, all undercover operations.” Hunsaker’s e-mail response, in its entirety, said: “I shouldn’t have asked….” Darlin, D. & Eichenwald, K., “H.P. Said to Have Studied Infiltrating Newsrooms,” New York Times (Sep’t 20, 2006).

Hunsaker also was the giver of at least two legal opinions. First, that the “pretexting” technique used by HP in its investigation was legal, Waldman, P., “Emails Point to Prime Role Of Chairman, Top Counsel In Setting Direction, Tactics,” Wall St. Journal (Sep’t 20, 2006). Second, that all of HP’s documentary records regarding the investigation would be protected by attorney-client privilege, Waldman, P., Clark, D. & Stecklow, S., “H-P CEO Hurd Might Have Had Bigger Probe Role,” Wall St. Journal (Sep’t 21, 2006).

In addition to Gentilucci’s reassurances, Hunsaker received a legal opinion regarding the first point from a Boston lawyer named John Kiernan of the firm Bonner Kiernan Trebach & Crociata, which is affiliated in some capacity with Security Outsourcing Solutions. Hunsaker never sought a formal legal opinion from HP’s usual “outside counsel,” Larry W. Sonsini of Wilson Sonsini Goodrich & Rosati, Damon, D. & Richtel, M., “Chairwoman Leaves Hewlett in Spying Furor,” New York Times (Sep’t 23, 2006).

Sonsini was involved, though, because one of HP’s directors, Thomas J. Perkins, had asked him if what HP was doing, was legal. Sonsini replied that Baskins had ‘‘looked into the legality of every step of the inquiry and was satisfied that it was conducted properly.’’ Mr. Sonsini previously had looked into the matter in August 2006, at which time he had concluded that pretexting “was not generally unlawful,” Darlin, D. & Eichenwald, K., “Hewlett Review Is Said to Detail Deeper Spying,” New York Times (Sep’t 18, 2006).

So the chain goes something like this: HP’s Chairman, Patricia Dunn, relied on HP’s General Counsel, Ann Baskins; and Baskins in turn relied on Hunsaker, in whom she had confidence, Jones, A., “H-P General Counsel Resigns, Won’t Testify; Baskins Quits Her Post As Dunn Says She Relied On Lawyer’s Judgment,” Wall St. Journal (Sep’t 29, 2006). Hunsaker in turn relied on Gentilucci, and Kiernan.

So here is what Hunsaker has to explain:

1. As evidenced by the California Attorney General’s recent indictments of Dunn, Hunsaker, and others, Hunsaker’s first legal opinion is false. Indeed, this should be well known to just about everybody; for the past year, the media has been chock full of reports regarding identity theft, Congressional hearings re: same, and a host of related matters.

2. His second legal opinion is false, too. Attorney-client privilege never applies when fraud is involved. This is pretty basic stuff.

3. What was HP doing relying on Kiernan, a local lawyer in Boston? The chances of a Fortune 500 company retaining, much less relying upon, a local lawyer’s opinion in connection with a matter of national significance, should be zero.

4. What did he mean when he said, “I shouldn’t have asked.” Wouldn’t it be the job of the chief ethics officer not only to “ask,” but also to take action if something was wrong?

I also love Sonsini’s opinion that what HP was doing was “not generally unlawful.” What a load of bullshit. This type of “hedging” and reverse-negative gobble-de-gook is one of the main reasons why people hate lawyers. I’m sure that Sonsini had some over-paid young associate who doesn’t have a modicum of insight or professional judgment do some research, bill HP for 100 hours of firm time, and then he summarized it in his reply to Perkins.

I can see how Hunsaker slipped into his dilemma. As HP’s Chief Ethics Officer, his main task probably was to be on the lookout for people stealing pencils from the office supplies cabinet. Slowly, irreversibly, he became oblivious to bigger issues that might be occurring inside of the company; his title was much bigger than his job description. He probably had a nice fat salary, didn’t want to “rock the boat” inside of the company by taking a potentially antagonistic stand about anything, and became inured to the corporate culture. Maybe he was seeing the forest, but he sure wasn’t seeing the trees.

In every business organization, there is a “morality of duty” and a “morality of aspiration.” The former refers to what you have to do; the latter, to what you should do. It was the famous scholar of jurisprudence (jurisprude?) Lon L. Fuller, who first drew this distinction, Fuller, L., The Morality of Law (rev. ed. 1969).

The only one at HP seemingly aware of it is Mark Hurd, the company’s President and CEO. At a congressional hearing on the matter, he testified: “There’s a difference between legality and ethical behavior, and I don’t want to confuse the two,” he said. “We have a standard of business conduct that this violated, regardless of the legality.” Puzzanghera, J., “House Panelists Rail at HP,” Los Angeles Times (Sep’t 29, 2006).

The fact of the matter, though, is that HP’s lapses “signal the death of the ethical pledge the pioneering firm spread throughout the industry,” Piller, C., “‘HP Way’ Obsolete in Silicon Valley,” Los Angeles Times (Sep’t 25, 2006). And, even more depressingly, it looks like HP is starting to resemble what’s considered to be completely normal and above-board at most record and film companies, which don’t give this type of incident second thought!

UPDATE: An article in the New York Times says the Hunsaker e-mail “could become a cornerstone of the prosecutor’s case.” “‘This supplies a ready-made narrative … It sums up the case in a single sentence.’ … [P]rosecutors would characterize a corporate culture in which top executives did not confront the hard questions, telling the jurors, ‘Isn’t that what Dunn is all about? She knew not to ask.'” Richtel, M., “H.P. Could Be a Finger-Pointing Case,” New York Times (Oct. 11, 2006).

UPDATE: On October 12, 2006, HP named somebody named John Hoak (I wonder if he’s related to Ren Hoek) as its new “ethics officer.” “H.P. Names Ethics Officer,” New York Times (Oct. 13, 2006); “H-P Names Hoak As Ethics Officer, Wall St. Journal (Oct. 13, 2006). Would somebody please tell me why a company needs an “ethics officer,” to begin with?

I mean, I’m not saying that it wouldn’t be useful, particularly at a company like HP, or so it transpires. I think that being a lawyer, though, automatically would disqualify one for such a position. Before you go to law school, you know the difference between good and evil, right and wrong. After law school, though, it’s “well, on the one hand, there’s this factor,” and, “then on the other hand, there’s that factor.” The whole point of law school is to sand down that initial sensibility. Bright-line distinctions are replaced with a more ponderous approach, that is geared towards the evaluation and assessment of various alternatives. This in turn becomes the breeding-ground for all kinds of justifications, rationalizations, mitigations, ex post facto analyses, and the like.

A good example is the justification for torture that emerged from President Bush’s in-house legal department, otherwise known as the Justice Department, under the leadership of Attorney General Alberto R. Gonzales. What a phrase, the “justice” department — like it actually was going to administer justice, or something similar thereto. Their conclusion that torture was “legal” is fundamentally inconsistent with a “moral” or “ethical” belief, that torture simply is wrong. Not to mention, inconsistent with the professed ideals of a “democracy” like the USA; one of President Bush’s objectives is to bring democracy to the Middle East, so what better way to do so, than by torturing them? It doesn’t make a lot of sense.

Of course I’m not saying that HP is going to go out and torture people. However, my concern is that a position like “ethics officer” will have a tendency to migrate to “excuse officer.” Mr. Hoak, whom I’m sure is a nice fellow, will have to resist this subtle, yet pervasive change, to his job description. If he isn’t careful, he will find that his task will become to justify, excuse, or mitigate questionable conduct by the company, as opposed to clearly defining the rules, or principles. Because he’s a lawyer, most “line” (as opposed to “staff”) operations in the company will be dubious of his mission and authority — nowhere would the adage, “we’re from corporate, and we’re here to help you” find better application.

Then, there’s the issue of “qualifications.” I’m quite sure that Mr. Hoak is circumspect and non-controversial. However, I would be interested to hear his views on Aristotle’s Nicomachean Ethics, Kant’s moral philosophy, Aquinas and natural law, utilitarianism (Jeremy Bentham, John Stuart Mill), axiological ethics, etc. Wouldn’t like a philosophy professor be a better choice?