She's the corporate attorney who former HP Chairwoman Patricia Dunn and CEO Mark Hurd told Congress was primarily responsible for the spying operation and resultant scandal that rocked the company, cost stockholders millions in settlement money, and may yet land Dunn and others behind bars.
Yet Ann Baskins, who resigned as HP's general counsel in September before invoking the Fifth Amendment in a Congressional hearing, has to date escaped the prosecutorial consequences that have befallen both Dunn and one of Baskins' legal department underlings. (She is being sued, however.)
In an attempt to paint a clear picture of Baskins' role -- what she did, and more critically, what she could have done -- Sue Reisinger of the magazine Corporate Counsel has dug through public records and interviewed those few principals who were willing to speak on record. I highly recommend this read -- Did Ann Baskins See No Evil at HP? -- to anyone who's been following the story. However, it's a 4,000-word tome so I've taken the trouble of extracting a few of the most salient passages here:
Little has been written about Baskins' role in the spying efforts, but an in-depth analysis of more than 1,500 pages of documents, as well as interviews with people close to the investigation, offers insights into how she let the spying probe spin out of control. The records, which include HP e-mails and interviews conducted by lawyers at Palo Alto-based Wilson Sonsini as part of the company's internal investigation, were made public by the House committee.
In the end, the HP scandal comes down to this: The spying probe became a runaway train. And Ann Baskins was the person in the best position to recognize the danger and stop it. But she didn't. In fact, the records show that from June 2005 to April 2006, Baskins raised legal questions about the tactics at least six times. But she never pushed for a definitive answer about whether the methods used were, in fact, lawful. Or, more importantly, whether they were unwise and dangerous to the company. In retrospect she could have, and should have, shut down the throttle on this train long before it crashed.
A damning indictment and one you might think would have gotten Baskins indicted, but the author explains in a sidebar the apparent reasoning for why that hasn't happened.
Through her attorney, Baskins does acknowledge oversights, if not wrongdoing.
Even Baskins concedes that she should have done more. Her attorney, K. Lee Blalack II, says Baskins would not comment for this story. But Blalack says that Baskins fully recognizes that instead of solely focusing on whether the investigation was legal, Baskins also should have questioned whether it was ethical. "She regrets that she did not do so," says Blalack, a partner in the Washington, D.C., office of O'Melveny & Myers.
That she did not do so is made painfully clear by the chronology laid out in this report. One of the misconceptions that has taken hold is that the phone-records pretexting that generated the most outrage just sort of happened, or it was the work of unscrupulous private detectives who kept HP executives and lawyers in the dark. This story shatters any such notion as the record makes clear that the upper echelons of the company -- including Baskins -- had opportunity after opportunity after opportunity to step in and act responsibly.
The phrase "willful ignorance" doesn't quite do justice to what transpired. These people understood all too well that they were on thin legal ice yet charged ahead with little regard for the consequences.
And, of course, the legal questions were always just the starting point for what should have shut down the spy ring before it careened out of control.
One (general counsel) who has overseen investigations for his Fortune 500 media company says that beyond the legal and the ethical issues, Baskins failed to ask the crucial question: "How will all this affect the company if it shows up on page one of The New York Times?"
Final note: Upon leaving the company, Baskins received a severance package worth $3.6 million.
Advertisement: |
The Leader in Network Knowledge
