SACRAMENTO — Over the past dozen years, Hewlett-Packard has sold hundreds of millions of dollars worth of printers and other products to Iran through a Middle East distributor, sidestepping a U.S. ban on trade with the country.
Now the person who headed HP for much of that time, Carly Fiorina, is ramping up to run for U.S. Senate. And questions are emerging about what Fiorina knew about HP's growing presence in Iran during her six-year tenure at the Silicon Valley firm from 1999 to 2005.
With Iran drawing condemnation abroad for its suspected pursuit of nuclear weapons and crackdown on government dissidents, Fiorina could find herself on the defensive. Did the former CEO know that her company was selling its wares to Iran through a European subsidiary and then a Middle Eastern distributor while she was at the helm? If an HP executive had such direct knowledge, that would violate the trade embargo.
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Securities and Exchange Commission issued a letter to HP seeking information about the company's dealings in Iran, Syria and Sudan. HP responded that in fiscal 2008 about $120 million worth of products were sold to Iran by a Dutch subsidiary through a Middle Eastern distributor. But even as the company claimed that those sales were legal because its subsidiary was acting on its own, HP in January announced it was severing ties with Dubai-based Redington Gulf. The distributor had sold HP products to Iran since 1997, two years after the United States imposed a complete ban on exports to Iran.
The announcement came days after The Boston Globe reported from Iran that HP printers had become nearly ubiquitous there despite the embargo.
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Even if HP is able to satisfy legal questions, that doesn't mean Fiorina is in the clear politically. HP's relationship with its Middle East distributor, Redington Gulf, flourished on her watch.
In 1999, after she took over at HP, the company's Middle East general manager was quoted in a United Arab Emirates English-language newspaper calling Iran "a big market for Hewlett-Packard printers" and noting sales growth in the country was 50 percent. Fiorina herself in 2003 cited the Middle East as a growth region amid flagging sales elsewhere (she did not mention Iran specifically). And the same year, Redington Gulf trumpeted in a press release that sales of HP products had topped $100 million.
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