WASHINGTON, DC -- U.S.
Representative Jan Schakowsky, ranking member on the Energy and Commerce
Subcommittee on Commerce, Trade, and Consumer Protection and member of the
Oversight and Investigations Subcommittee, made the following statement at the
Oversight and Investigations Subcommittee hearing on the Hewlett-Packard
pretexting scandal:
Thank you, Chairman Whitfield
and Ranking Member DeGette for holding today’s hearing on the Hewlett-Packard's
pretexting scandal. I am glad that we have the opportunity to further examine
what is undoubtedly the most notorious case of pretexting for personal phone
records to date.
In July 2005, I circulated a
letter to my Congressional colleagues drawing attention to the burgeoning
practice of pretexting of phone records. I urged them to join me as cosponsors
of the SAFE CALL Act, which is a somewhat tortured acronym for the Stop
Attempted Fraud against Everyone’s Cell and Land Lines Act, a bill that would
expressly prohibit pretexting for phone records. I am proud that my bill was
used as the basis for Title I of H.R. 4943, the Prevention of Fraudulent Access
to Phone Records Act, which passed our committee unanimously.
We drafted the bipartisan H.R.
4943 because questions were raised about whether pretexting for phone records
was legal, not to mention the safety and privacy concerns it raises. The FTC
has successfully brought pretexting cases under its Section 5 authority, which
prohibits unfair or deceptive acts and practices. A number of states –
including my homestate of Illinois – have used their general consumer protection
and computer fraud statutes to file lawsuits against the practice. Yet, because
there is not clear federal statute outlining this anti-consumer practice, there
are those who still choose to dabble in what they claim is a grey area of the
law.
HP is a perfect example. When
Kevin Hunsaker – HP’s senior counsel and director of ethics – asked
whether pretexting for board member and reporters phone records was “above
board,” Tony Gentilucci – HP’s investigations manager replied, “I think
it is on the edge, but above board.” Hunsaker, instead of demanding an
explanation or ringing the alarm bells – responded, “I shouldn’t have asked.”
Additionally, HP’s September filing with the SEC revealed that the board was
advised by its outside general counsel, Larry Sonsini, that pretexting for phone
records was “not generally unlawful.” The filing went on to say,
“but such counsel could not confirm that the techniques employed by the
outside consulting firm and the party retained by that firm complied in all
respects with applicable law.”
Hewlett Packard’s action and
hedging about pretexting’s legality demonstrate just how pressing it is to pass
our bill and put an end to all questions. Congress, and at least 12 states that
have passed anti-pretexting laws, agree that pretexting is unacceptable – and
that the ends (in HP’s case, squelching board leaks) do not justify the
means.
What makes the HP story more
disheartening is that HP was believed to a corporation that set business
standards that others should follow. In January 2005, TRUSTe and Ponemon
Institute named HP “The Most Trusted Company in America for Privacy.” In July
2006, the Commerce, Trade, and Consumer Protection Subcommittee, of which I am
the ranking member, invited HP to testify about what it does to raise the bar on
consumer privacy protections. Little did we know that when we were trying to
learn about its “best practices,” HP had just been engaging in the worst
practices out there. If corporations that are supposed to be so reputable are
employing such legally and ethically questionable behavior, we have to ask what
other corporations are doing.
I look forward to hearing from
today’s witness. I truly hope that we can get to the bottom of this scandal.
Thank you. |