Lockyer Widens Probe of HP
California Atty. Gen. Bill Lockyer said Wednesday that he had enlisted his Massachusetts counterpart in a widening criminal investigation into alleged corporate spying at Hewlett-Packard Co.
Lockyer in an interview identified one focus of the probe as Security Outsourcing Solutions Inc., a tiny Boston-area firm that may have been involved in deceiving phone companies into releasing phone records of HP directors and reporters covering the Silicon Valley company.
The exact nature of the relationship between HP and the security firm, whose listed address is the home of private investigator Ronald R. DeLia, remained unclear Wednesday. Lockyer said he had not yet determined where DeLia’s company stood in a “chain of vendors” HP used to investigate leaks by its board.
It is common for large corporations, through their legal or security departments, to hire investigative firms, which in turn subcontract the work to others. It’s not clear in this case whether DeLia was hired by HP or worked as a subcontractor for another firm.
It remains a puzzle why a Fortune 500 company with the heft and prestige of technology icon HP came to be involved with someone like DeLia, who is virtually unknown even among fellow Massachusetts investigators.
“I’ve been doing this for 32 years and I’ve never heard of the guy,” said Phillip E. White, executive director of the Licensed Private Detectives Assn. of Massachusetts, an industry group that claims three-fourths of the state’s active private eyes as members. “Nobody seems to know him.”
The HP scandal has mushroomed as details become known about methods used in the leak investigation ordered by Chairwoman Patricia C. Dunn. The Palo Alto-based personal computer and printer maker has said that private investigators gained access to the phone records of reporters and HP directors.
Dunn this week agreed to surrender leadership of the board to Chief Executive Mark Hurd in January.
In a message to employees, she said: “I apologize personally, deeply and sincerely to everyone affected in any way either within HP or outside of the company. This matter has caused HP and me major distress and embarrassment.”
DeLia did not respond Wednesday to telephone messages and e-mails. HP spokesman Ryan J. Donovan would say only that the company was cooperating with Lockyer’s investigation.
Public records show that DeLia has been a principal in at least two investigative or security firms including Security Outsourcing, which apparently operates from his home in the Boston suburb of Needham.
He is listed as the registered agent for the company, which was formed in 1998. The only other officer, according to state corporation records, is his wife, Caroline, who serves as president, secretary, treasurer and director.
Ronald DeLia previously was president of another Massachusetts company, Commercial & Industrial Services Inc., which was formed in 1982 and dissolved in 1990.
DeLia was licensed as an investigator in 1999 and has not been the subject of disciplinary action, according to the Massachusetts State Police, which certifies private eyes.
The company’s website says Security Outsourcing was formed to provide small and medium-sized companies with the same level of security services available to better-heeled firms.
The Boston address and phone number listed on the company’s website belong to the law firm Bonner Kiernan Trebach & Crociata. Questions were referred to partner John Kiernan, who did not return a phone call.
White of the trade association said neither DeLia nor his company had ever been a member of the group, which has taken a formal stance opposing the use of “pretexting” -- impersonating others to obtain their confidential information.
“We don’t condone it and we don’t like it,” he said. “It gives everybody in the profession a bad name.”
Between stints with his security and investigations companies, DeLia in the mid-1990s was an owner and general manager of the Cue and Grill, described in Boston newspaper reports as a trendy pool parlor and restaurant in the city’s storied North End, where he also served on the neighborhood council.
The restaurant soon ran into financial trouble, according to a filing with the state commissioner of revenue, which found DeLia responsible for nonpayment of sales taxes on meals. The restaurant ultimately went bankrupt.
Lockyer, who is known for being more talkative about active investigations than most others at his level of law enforcement, reiterated his intention to seek indictments but would not say when. He denied media reports Wednesday that said his office planned to bring charges within a week.
“We’d rather be thorough than speedy, and there’s additional information we’d like to get ... to nail it down,” Lockyer said. “Obviously, crimes were committed. We know some of the people who did it, inside and outside of the firm. The big unresolved issue is who else could be involved, and we’re working on it.”
He said Massachusetts Atty. Gen. Tom Reilly had assigned staff to “help us get a search warrant served.”
Lockyer said he was looking into alleged violations of three specific penal code sections dealing with identity theft, unauthorized access to computer records and misuse of computer records controlled by a public utility, such as a telephone company.
He said he was also considering filing civil lawsuits, alleging privacy violations under the state’s unfair-competition law. He said his office had been aggressive in filing both civil and criminal complaints in environmental and consumer enforcement cases.
Indeed, the HP probe is part of a broader investigation of the pretexting of cellular telephone records that involves about half a dozen cases, Lockyer spokesman Tom Dresslar said.
Cellphone records and other personal data are specifically protected by the California Constitution, which spells out rights to privacy, Dresslar said.
In March, Lockyer filed a $10-million-plus lawsuit in San Diego County Superior Court against Data Trace USA Inc. The action alleged that Data Trace illegally obtained and resold cellphone customers’ call records.
Lockyer said he consulted on the HP case with Santa Clara County Dist. Atty. George Kennedy, but Kennedy deferred to the state in pursuing a possible prosecution.
The FBI and the Securities and Exchange Commission are also investigating HP, and a House committee has asked the company for information about its probe.
Lockyer’s efforts to protect Californians’ privacy and guard their pocketbooks from consumer fraud and manipulation have brought mixed results.
Lockyer, who pursued a detailed investigation of market manipulation by natural gas pipeline companies and electricity generators during the energy crisis of 2000 and 2001, said he had won judgments of almost $6 billion from Enron Corp. and others.
He’s had less luck, however, dealing with oil refiners and finding evidence of possible price manipulation in California.
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kim.christensen@latimes.com
Times staff writers Elizabeth Douglass and Michael A. Hiltzik contributed to this report.
