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Did Fiorina's HP violate U.S. sanctions?

May 20, 2010 |  8:11 am

Irvine Assemblyman Chuck DeVore, who is trailing former Rep. Tom Campbell and business executive Carly Fiorina in the race for the Republican U.S. Senate nomination, has been trying hard to tarnish Fiorina with allegations that she violated the U.S. trade embargo against Iran while she ran technology giant Hewlett-Packard from 1999 to 2005.

DeVore’s accusation stems from a December 2008 Boston Globe story alleging that HP’s Dutch subsidiary was selling printers to a Dubai-based company called Redington Gulf, which in turn was reselling them to Iran.

Was this, as DeVore has repeatedly claimed, a violation of the spirit of the embargo on all trade with Iran, which was imposed in 1995 by President Clinton in an attempt to put pressure on the Iranian government over its nuclear program and support for terrorist groups?

Not exactly.

There is, it turns out, a gray area in the law, which HP was able to use to its advantage. Nevertheless, in January 2009, HP announced it would no longer sell products to Redington Gulf. It had never violated the letter of the law, the company said, but wanted to comply with the spirit of the law.

Even DeVore concedes, when pressed, that no laws were broken. But, he added in an interview with reporters after a May 5 debate with his opponents at the Museum of Tolerance in Los Angeles, “it’s business executives like Carly Fiorina that make embargoes virtually worthless because they find ways around it."

"It only would have been illegal if Hewlett-Packard executives had direct knowledge of the exports. They had direct knowledge of the exports, of course they did,” he said, because Redington Gulf “was named after the middle name of the founder of the company [William Redington Hewlett].”

Actually, having direct knowledge of such sales appears not to be the issue. The issue, according to trade law experts, is whether Hewlett-Packard’s Dutch subsidiary is owned and controlled by the parent company, and whether it can be considered a “United States person” under the rules of the U.S. Treasury Department, which administers the law through its Office of Foreign Assets Control.

Hewlett-Packard maintains that its Dutch branch cannot be considered a “United States person,” and further claims that the products sold in Iran were authorized under the Treasury Department’s "export administration regulations."

What about DeVore’s claim that Redington Gulf was named after William Redington Hewlett? That one took a while to track down. We tried calling Redington Gulf in Dubai, but got no answer. So we called the Indian headquarters of Redington India Ltd. in Chennai (formerly Madras). We were told to send an e-mail with our inquiry.

A few days later, we received a response from S.V. Krishnan, the company’s chief financial officer. “This is to confirm that there is no relationship between our Company’s name and Mr. William Redington Hewlett,” wrote Krishnan. “Redington Pte Ltd. was a shell company in Singapore which was bought by us from a legal firm in the 1970’s.”

-- Robin Abcarian