Questions raised by move in HP case
The offer by state prosecutors to drop felony charges against those implicated in the corporate spying scandal at Hewlett Packard Co. could be a sign that the case against them may be weak.
Or, it could indicate that federal authorities are prepared to mount their own case against former HP Chairwoman Patricia C. Dunn and three others. One investigator hired by HP has already pleaded guilty to federal felony counts of conspiracy and aggravated identity theft.
People familiar with the investigation against Dunn and the others said Thursday that prosecutors at the state attorney general’s office last month offered all the defendants a plea deal that would dismiss the four felony charges against them in exchange for pleading guilty to a single misdemeanor count.
“In light of the fanfare with which the attorney general announced this prosecution, bargaining the case away for a misdemeanor seems peculiar,” said Jan Handzlik, an attorney with Kirkland & Ellis in Los Angeles. “It might reflect a weakness in the case. Then again, it may indicate that the state prosecutors knew that a federal prosecution is in the offing.”
Handzlik and other legal experts said the prosecutors might be evaluating the likelihood of convincing a jury that Dunn and the others knew what they were doing was illegal.
The case riveted Silicon Valley after it was revealed in September that Palo Alto-based HP had hired private investigators to spy on reporters and its own directors to find the source of leaks to the media. During that investigation, which was ordered by Dunn, private phone records were accessed illegally through subterfuge. Dunn and her codefendants have said either they did not know what was being done to find information or didn’t know it was illegal.
Both the California attorney general’s office and the U.S. attorney’s office declined to comment.
The deals were first revealed by Stephen Naratil, attorney for Bryan Wagner, the private investigator who pleaded guilty last week to the federal charges. They were confirmed by two other sources who declined to be identified because the cases were still pending.
Naratil said that California Deputy Atty. Gen. Robert Morgester offered Wagner the opportunity to plead guilty to a single misdemeanor in exchange for dropping the four felony counts he faced in state court. Each count carried a potential $10,000 fine and three years in prison.
Naratil said that Morgester said a similar offer had been made to the other defendants, including Dunn.
“I don’t comment on anything that occurs outside the courtroom,” Morgester said.
Naratil said that his client pleaded guilty to the federal felony charges rather than take the California deal in part because the California Penal Code prevents defendants from being tried twice for the same charges.
Representatives for Dunn declined to comment.
Michael Pancer, the lawyer for former HP ethics officer Kevin Hunsaker, said that his client was not in negotiations with either state or federal prosecutors.
“He’s not guilty,” Pancer said. “My client didn’t know Mr. Wagner. Never knew he existed and he never authorized him to take any actions on behalf of HP.”
In addition to Dunn and Hunsaker, state charges were filed against three private investigators: Wagner, Ronald DeLia and Matthew DePante. Separately, the federal government has pursued its own case.
Legal experts said it was unusual for charges in such a high-profile case to be reduced.
“It might be that the state is losing interest,” said Stephen Sitkoff, a former deputy district attorney and now a criminal defense lawyer with Takakjian, Sowers & Sitkoff in Los Angeles. “It might be that the feds might take care of it. I really don’t know. As a general rule, prosecutors don’t offer sweetheart deals if they don’t have problems with the case.”
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