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Hewlett-Packard

Hewlett-Packard

Industry: 
Technology
Value of USG Contracts: 
17600
Symbol: 
NYSE:HPQ
States: 
CA
Country: 
USA
Sources: 

“A major infiltration of a military network blamed on Iran was facilitated by a poorly written contract with computer-services provider Hewlett-Packard Co. , said people familiar with the matter. H-P's contract with the military didn't require it to provide specific security for a set of Navy Department databases, and as a result, no one regularly maintained security for them. That eased access for hackers, who used the opening to penetrate deep into the Navy Marine Corps Intranet network, said people familiar with the matter. The findings of the Navy's investigation are being closely watched by lawmakers on Capitol Hill, who next week are set to evaluate the nomination of Vice Adm. Michael Rogers as National Security Agency director. Adm. Rogers was the Navy cyber chief who oversaw the response. The intrusion, which officials said didn't compromise classified information or email, took about four months to clean up. The Navy has been working to address lapses revealed by the hack and other security efforts under what it calls Operation Rolling Tide. The infiltration is the only publicly known penetration of a military network blamed on Iranian hackers…The hacking ‘is a contracting failure and not a technology failure,’ said one cybersecurity specialist familiar with the situation. ‘This is a Dilbert cartoon.’ H-P on its website calls the Navy and Marine Corps network ‘the world's largest and most secure intranet,’ saying that ‘improved security is unquestionably NMCI's greatest value.’ The network's security system detects more than 800 new viruses each month, it says. An H-P spokesman declined to comment on the infiltration.” (Wall Street Journal, “Navy Hacking Blamed on Iran Tied to H-P Contract,” 3/6/14)

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"A major Iranian partner of Huawei Technologies offered to sell at least 1.3 million euros worth of embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator in late 2010, documents show. China's Huawei, the world's second largest telecommunications equipment maker, says neither it nor its partner, a private company registered in Hong Kong, ultimately provided the HP products to the telecom, Mobile Telecommunication Co of Iran, known as MCI... Huawei has a similar partnership with HP. In a statement, the Palo Alto, Calif., company said, 'HP has an extensive control system in place to ensure our partners and resellers comply with all legal and regulatory requirements involving system security, global trade and customer privacy and the company's relationship with Huawei is no different.' The statement added, 'HP's distribution contract terms prohibit the sale of HP products into Iran and require compliance with U.S. and other applicable export laws.'... The proposal makes clear that HP computer servers were an integral part of the 'Hardware Installation Design' of the expansion project. Tables listing equipment for MCI facilities at a new site in Tehran and in the city of Shiraz repeatedly reference HP servers under the heading, 'Minicomputer Model.'... The pages list prices for HP servers, disk arrays and switches, including those that already are 'existing' and others that need to be added. The total proposed project price came to 19.9 million euros, including a 'one time special discount.' The proposed new HP equipment, which totaled 1.3 million euros, included one server, 20 disk arrays, 22 switches and software . The existing HP equipment included 22 servers, 8 disk arrays and 13 switches, with accompanying prices. Asked who had provided the existing HP equipment to MCI, Vic Guyang, a Huawei spokesman, said it wasn't Huawei." (Reuters, "Exclusive: Huawei partner offered embargoed HP gear to Iran," 12/30/12)

 

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"But because its products are often sold by others through indirect channels without its knowledge or consent 'it is always possible that products may be diverted to Iran or Syria after being sold to channel partners, such as distributors and resellers,' HP said... HP said in both letters that it would continue to work with ZTE, but it had conducted an internal investigation relating to an alleged sale of its products to MTN Irancell, Iran's second largest mobile carrier." (Reuters, "HP says products may have been sold to Syria by others," 11/23/2012)

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"MTN Irancell, a joint venture between MTN Group Ltd of South Africa and an Iranian government-controlled consortium, sourced equipment from Sun Microsystems Inc, Hewlett Packard Co and Cisco Systems Inc, the documents and interviews show. MTN owns 49% of the joint venture but provided the initial funding." (Reuters, "Iranian cell-phone carrier obtained banned U.S. tech," 6/4/2012)

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"Hewlett-Packard formed a partnership in 1997 with a newly formed company in Dubai to sell its products in the Middle East, including to Iran. It also sold services to the U.S. military while operating in Iran. In January 2009, after its sales in that country came under scrutiny, the company said it would cease all business in Iran to go "beyond the letter of the law."  From 2000-2009, the company has been the recipient of $17.6 billion US federal funds.  They have withdrawn their acitivites in Iran.  (The New York Times, "Profiting from Iran, and the US," 3/6/2010)

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"Hewlett-Packard Co. has said it would stop a distributor from selling its products in Iran.

The computer and printer maker acknowledged Thursday that it knew the sales were occurring despite trade sanctions on Iran, but maintained it did nothing illegal and was halting the practice "to go beyond the letter of the law."

The Boston Globe reported last week that HP could be in violation of US export laws because of an arrangement it had with Redington Gulf, a technology distributor in the Middle East, to sell HP printers in Iran.

HP said at the time and reiterated Thursday that it complies with all export laws. But it said in a statement that it would clarify contracts with its distributors 'to explicitly prohibit the sale of HP products in Iran.'

HP said it would more closely monitor its distributors. "Having recently examined the situation, we believe it's important to go beyond the letter of the law," the statement said.

The company emphasized that it never shipped directly to Iran and doesn't have any employees there. Even so, the Globe story noted that an HP manager had been quoted as calling Iran an important market. In 1999, HP's Middle East manager at the time estimated that sales in Iran would grow 50 percent a year." (AP, "HP to bar sales of its products in Iran," 1/20/09)

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Hewlett Packard Correspondence with the SEC regarding the business its new acquisition, EDS [Electronic Data Systems Corporation], has with Iran:

"In our initial response letter dated March 12, 2009, we noted that HP completed its acquisition of EDS in August 2008. Since the date of that letter, we have gathered additional information about EDS’s contacts with Iran, Syria and Sudan. Accordingly, the following supplements our responses to prior comments 1-3 included in your letter dated February 10, 2009.

In our initial response letter, we stated that EDS provides services utilizing its computerized reservation system known in the trade as “Shares” to non-U.S. airline companies to provide IT infrastructure support to those airlines as they conduct flight operations throughout the world and that, in some instances, these airlines, given their global operations, fly into and out of Iran. In addition to the “Shares” software program, a Swiss subsidiary of EDS has a second suite of similar programs in Switzerland that provides similar services to non-U.S. airlines flying to a variety of destinations, including Iran, Syria and Sudan.

In addition, EDS and its non-U.S. subsidiaries provide IT services (such as database and applications management, infrastructure support and support for other IT systems) for their customers’ global operations. Some of these customers are non-U.S. companies that are located outside of U.S.-embargoed countries (e.g., in Europe, South America or Asia) and that have their own business activities with Iran, Syria and/or Sudan. In providing services to these customers, EDS is mindful of U.S. legal requirements and regulatory restrictions, including those restricting exports or re-exports of goods, technology and software to Iran, Syria and Sudan, as well as those prohibiting U.S. persons from unlawful involvement with those countries...

However, based on the information that it has gathered to date, HP believes that the services described above are being provided by EDS and its non-U.S. subsidiaries in compliance with applicable laws relating to business activity with Iran, Syria and Sudan. HP also has no knowledge of any of the services provided by EDS and its non-U.S. subsidiaries described above being put to military use by any of the referenced countries.  In addition, HP continues to believe that its limited contacts with Iran, Syria and Sudan do not represent material information to a reasonable investor at this time." (SEC Correspondence, 4/21/09)

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The Securities and Exchange Commission asked Hewlett-Packard Co. about any export of its products to Iran, Syria and Sudan.

Palo Alto-based HP (NYSE: HPQ) replied that it has had no dealings with Sudan and that exports of its products to Syria and Iran have been authorized directly by the U.S. government or have met export restrictions. Sales to Iran amounted to about $120 million in fiscal 2008...

In particular, the SEC asked HP about Dubai-based distributor Redington Gulf, which resells HP products in Iran. HP printers accounted for 41 percent of the Iranian market in 2007, the SEC said, citing news reports...

Concerns about possible military uses of computer equipment have led to some devices and software being banned from export to those countries. The SEC letter asked HP to explain if 'any of the products, equipment, components, technology or services' provided to Iran, Syria or Sudan have military uses or have been used for military purposes...

'All known sales' of HP equipment or software into Iran have been made through the company’s Dutch subsidiary, Hewlett-Packard Europe B.V., the reply to the SEC said...

Also, HP said, its subsidiary recently 'has taken steps to terminate existing agreements with Redington Gulf' and other distributors to stop its products from ending up in Iran. (San Francisco Business Times, "SEC asks HP about sales in Iran, Syria, Sudan," 8/18/09)

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Hewlett-Packard Co. said late Thursday that it would stop a distributor from selling its products in Iran. The computer and printer maker acknowledged that it knew the sales were occurring despite trade sanctions on Iran, but maintained it did nothing illegal and was halting the practice to go beyond the letter of the law. The Boston Globe reported last week that HP could be in violation of U.S. export laws because of an arrangement it had with Redington Gulf, a technology distributor in the Middle East, to sell HP printers in Iran. (Associated Press, "HP says it will stop distributors sales in Iran," 1/08/09)

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HP printers have become a top seller here, despite a comprehensive embargo that prohibits the California-based company from sending its products to Iran the lions share of HP printers, among the most visible of US goods here, come not through smugglers, but through a series of international transactions that enable HP to sidestep US sanctions. In 1997, two years after President Clinton banned trade with Iran, HP struck a partnership with a newly formed company in Dubai to sell its products in the Middle East. At the time, the company, called Redington Gulf, had only three employees and its sole purpose was to sell HP supplies to the Iran market, says a history on Redington Gulfs website and Rajesh Chandragiri, the administrative manager in Redington Gulfs Dubai office. (Boston Globe, "HP uses third party to sell printers in Iran," 12/29/08)

 

Response: 

No response at this time.