The definitive INQUIRER Guide to industry scandals

NOBODY DOUBTS that HP is one of the great IT pioneers but when it comes to scandals it's only just starting out.

Here's the INQUIRER'S Top Five list of famously infamous scandals in the biz.

5. Firmage's Theory. OK, so maybe it's more weird than scandalous but we wouldn't want to miss out on a chance to remind you of Joseph Firmage, the founder of web design pioneer USWeb. As his company boomed in the late 1990s, Firmage made the mistake of telling the world about his odd beliefs, which included the theory that a massive cover-up -- isn't it always -- had been orchestrated to obscure extraterrestrial spaceship crashes and that discoveries therein had led to modern fibre-optics and semiconductors.

He noted that he had nothing to gain through his beliefs and “every conceivable career disincentive”. Firmage now runs Intend Change, which, with Carl Sagan Productions, formed Cosmos Studios that, "has funded and filmed expeditions discovering new species of dinosaurs in Egypt, and the launch of COSMOS ONE, the world's first solar sail spacecraft".

4. CA's bad arithmetic. Very few tech companies today would be willing to cast the first stone about rivals' accounting practices given the number of stock award-related recounts currently going on, but the former Computer Associates has struggled with its adding up more than most.

Ex-CEO Sanjay Kumar is scheduled for sentencing next month after pleading guilty to fraud but the company continues to struggle to keep its books straight despite hiring former IBMer John Swainson to steer the ship and, that oldest of tricks by scandal-hit companies, changing its name.

However, as critics were quick to point out, changing your name to CA when everybody already calls you CA anyway isn't going to make a heck of a lot of difference.

3. EDS's parties. Not a company you might normally associate with party-animal behaviour, consulting behemoth EDS created tabloid-style headlines in 2003.

Part of a broader accounting dispute included an exchange over expenses where then-CEO Dick Brown was accused of squandering EDS money on a party for his wife which flew in guests on a private jet and a separate Comdex bash in Las Vegas featuring Barenaked Ladies -- a popular beat combo m'lud -- and Macy Gray. The relative quiietude of the press on the matter might have related to the fact that hundreds of them gorged on the Comdex lig, including your humble correspondent.

2. MCI-Worldcom's fraud. Bernie Ebbers paid the price for a complex hairball of number-juggling antics, ending up with a 25-year sentence. After selling Compaq to HP, Michael Capellas pulled off a remarkable double by taking over at the company, restyling it as MCI, and taking about $39m in severance after selling out to Verizon. In January of this year, he was named on the board of Cisco. Nice work if you can get it and Capellas seems to get it every time.

1. IBM's Nazi links. Edwin Black's 2001 book IBM and the Holocaust uncovered the "strategic alliance" that, it alleged, used Big Blue's early computer know-how to catalogue genocide activities. The uncomfortable topic of the relationship between business and dealing with not-like-us states was broached again recently when Yahoo boss Terry Semel fudged a response as to whether he would have cooperated with the Nazis.

The question was prompted by the mass hug currently being afforded by the global computer industry to China. µ

See Also
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