By Phillip Matier, Andrew Ross
January 24, 2007
In a case with shades of the ongoing Hewlett-Packard spy scandal, a
former HP executive claims the Silicon Valley giant secretly paid the
former president of rival Dell Inc.'s Japanese division for trade
secrets about Dell's competing entry into the lucrative printer
The bombshell industrial espionage charges are part of a countersuit
filed Friday in federal court in Tyler, Texas, by a former HP vice
president, Karl Kamb. He is among four high-ranking ex-HP employees
accused by the company in a $100 million civil suit of stealing
confidential company technology to launch a competing flat-screen TV
Hewlett-Packard claims it learned of the alleged fraud in 2004 when
Kamb's wife subpoenaed the company's records for their divorce
proceeding, and in the process requested information about Kamb's
secretive business enterprise.
Kamb has denied any wrongdoing, and instead traces his troubles to HP's
own "misguided intelligence efforts'' in 2002, when he says the company
used him to help gather information about Dell's pending launch of a
rival printer business.
According to the suit, Kamb was an HP vice president of business
development living in Japan at the time and working with HP's
"Competitive Intelligence Team" when he was instructed to make contact
with anyone who might have knowledge about Dell's plans.
One of those Kamb contacted was Katsumi Iizuka, the former president of
Dell Japan. The suit says Iizuka declined HP's offer of a monthly
stipend but instructed that the money and "secret information'' be
channeled through a third party to a firm identified only as Dinner Inc.
The suit alleges the payments were approved by "senior HP management''
and that "in an effort to conceal HP's clandestine activities, code
names were assigned to the Dell data collection project.'' Dell itself
was dubbed "Everest.''
Soon after, Iizuka allegedly provided HP with details of Dell's
anticipated launch -- everything from product specifications and costs
to the manufacturers and suppliers.
Kamb alleges that soon after his wife subpoenaed HP records as part of
their messy divorce, the company began interrogating him and snooping on
him -- including using false pretenses to fraudulently obtain his
private phone records.
The tactics, Kamb said, are eerily reminiscent of HP's scandal last year
involving "pretexting practices," in which the company admitted hiring a
private investigator to gather phone records of board directors, its own
employees and members of the media in an attempt to find out who was
leaking confidential and damaging corporate information.
"It is what it is -- we have not leveled any of those charges lightly,''
Kamb's Dallas-based attorney, Mark Joseph, said when contacted Tuesday.
HP issued us a statement calling Kamb's counterclaim "wholly without
merit" and an attempt to delay its pending theft case against him.
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