Allegations of misconduct abound in the corporate world nowadays. Corporate executives commit offenses that are markedly different from ordinary criminals. They do not hold up stores, steal cars, or shoplift; instead, they engage in frauds, receive kickbacks, trade stocks on inside information, and deliberately fail to pay government loans. The impact of their misdeeds can be tremendous, affecting the lives of people by the thousands. Here are five notable corporate scandals in history.

The HP Spying Scandal

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What began as an effort to find reporters’ unidentified sources had turned into an elaborate spying operation. The entire mess started in early 2005, when the Hewlett-Packard Company (HP) board became troubled over leaks of confidential board meeting details to the media. Determined to dig out the source of the leak, HP chairwoman Patricia Dunn ordered HP senior counsel Kevin Hunsaker to lead an internal probe that involved hiring of an independent group of electronic security experts-investigators to spy on HP board members and several journalists. However, the group practiced the illegal technique of “pretexting,” which is the act of creating a scenario (pretext) or pretending to be someone else to trick people into releasing confidential information. They planted false documents, tracked HP board members and journalists, and watched their homes and family to obtain their phone call records. A sophisticated albeit unsuccessful email sting operation was also devised in an attempt to trick Dawn Kawamoto, who wrote a rather detailed CNET article summarizing the HP’s long-term strategy on January 23, 2005, into revealing her sources.

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In September 2006, the US House Committee on Energy and Commerce learned of HP’s use of pretexting while conducting an investigation on Internet-based brokers who purportedly employed “lies, fraud and deception” to obtain personal information, and permitted anybody to acquire “itemized incoming and outgoing call logs” in exchange for a modest fee. During the congressional hearing, Dunn initially professed to have no knowledge of the operational aspects of the probe, but subsequenly acknowledged to the truth when several of her emails with Hunsaker came to light, revealing the intense degree of interest she had given it. Criminal charges and arrest warrants were eventually filed against Dunn, Hunsaker and three outside investigators for four counts each of identity theft, fraud and conspiracy. All pleaded not guilty except for Colorado investigator Bryan Wagner who was indicted, for having illegally obtained and transmitted personal information of HP directors/employees and journalists. Dunn and Hunsaker left the company as a result of the scandal.

Harken Energy Scandal

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