Verizon obfuscation fails to disprove stolen items were found at its offices
ON THURSDAY, a court case that provides an alarming insight into the dirty tricks taking place in South African boardrooms was buried without fanfare, when the local arm of US firm Verizon paid an “undisclosed settlement” to Dimension Data’s (Didata’s) arm, Internet Solutions.
Internet Solutions claimed ex-employee Neil Whitehead stole its “confidential documents and, with (Verizon’s) knowledge”, took them to Verizon’s Gallo Manor offices, where they were used “to facilitate unlawful competition with Didata”. Based on this suspicion, Didata got an Anton Piller court order in August, allowing the sheriff to search Verizon’s premises.
The results, according to Internet Solutions director Tony Walt, “proved to be a realisation of Didata’s worst fears”. In all, 108 Internet Solutions documents were found at Verizon, including “67 hard-copy items and 41 items electronically stored on Verizon’s computers”.
(As an aside, court papers record how Jayendra Naidoo, a Verizon shareholder, confronted Internet Solutions CEO Angus MacRobert during the search, warning him “this is going to backfire on you”.)
But having apparently been caught red-handed, it was a surprise that Verizon and Whitehead went to court last week asking that the order be “discharged” and the documents returned.
Verizon’s case hinged on an argument that there were “defects” in the Anton Piller order, which meant it had not been properly served.
Bristling with outrage, Verizon’s lawyer told the court, “it’s an abuse, the way this order was implemented”.
But Verizon’s case began to look shaky when Judge Phillip Boruchowitz put it to Verizon that there may only have been “a litany of inconsequential errors”.
After that (and before the judge could rule) Verizon’s lawyers struck a “settlement deal” outside court with Didata.
The settlement is secret, but it is believed Verizon paid Didata less than R10m.
Although Didata can still file a criminal complaint, is Verizon’s token payment sufficient?
Considering the scale of the offence, you wouldn’t think so.
In court papers, Walt said Didata “has reason to believe that this unlawful conduct was also known to, and supported by, other (staff) of Verizon, having regard to (where) certain of this documentation was found”.
Scanning the 108 documents shows it wasn’t just the odd Didata canteen menu that was pocketed, but a rather breathtaking array of information.
For example, one labelled “IS Bandwidth usage Sept05” contained details about customers stored in Internet Solutions’ online Customerzone portal, including billing details and costs. “This information would enable Verizon to contact (one of our) customers and submit a (cheaper) offer ,” said Walt.
Equally, “Clover WAN drawing 2005” detailed the IT network that Internet Solutions had created for Clover, giving rivals insight into Internet Solutions’ VPNs (virtual private networks).
The documents also included details of a new Internet Solutions product that provides a voice-over-internet service using digital subscriber lines (DSL).
Walt said this leak was an “extreme concern as it imperils (us) being first to market”, because rivals could use the data to duplicate the product.
After the case, Didata’s attorneys, Werskman’s David Hertz and Trevor Boswell, said Didata had to act to curb this “unethical conduct”, where “misappropriated” data were used as a springboard for unlawful competition.
When contacted on Friday, Verizon released a statement that managed to be simultaneously constipated and vacuous.
Brimming with white-noise about their “industry-leading products”, Verizon said it had “investigated and responded to the allegations internally in line with our strict code of conduct and human resources policies”.
But if, as it seems, people implicated in this theft still work for Verizon, one wonders what this “internal investigation” found? Asked if Verizon had fired anyone, Verizon’s flacks said the company “wasn’t saying anything else”.
In its statement, Verizon said “ethical behaviour and compliance with laws are fundamental to everything (we) do”.
So how come it paid Didata to settle the matter? And did Verizon think shallow corporate speak could erase the fact that stolen documents “somehow” ended up at their office? Despite the hushing-up, one wonders whether Verizon’s customers will still sleep as well as before.
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