FBI PROBE TWIST IN COUNCIL DATA DRAMA:
Offshore tech business probed by FBI
THE tech company that was set to be handed the personal data of up to 25,000 Geelong leisure members was in 2015 investigated by the Federal Bureau of Investigation (FBI) amid allegations of “email hacking and extortion”.
The Geelong Advertiser can reveal multi-billion dollar US tech company HubSpot was the organisation contracted by the City of Greater Geelong to provide Swim Sport and Leisure member communications earlier this year.
The city this week refused to confirm or deny whether HubSpot was the contracted provider, instead threatening legal action against the Geelong Advertiser for the publication of any confidential information.
The city’s move to hire the business had been met with widespread outcry over privacy concerns.
Each Swim Sport and Leisure member’s name, address, email address, phone number and member number were to be shared with the company, which would also use tracking technology in messages to collect technical information such as users’ IP addresses.
It is understood the city is no longer intending to use the contracted company, and will now search for a new marketing and communications provider.
HubSpot, a Cambridgebased sales and marketing software firm, endured a scandal-plagued year in 2015, surrounding the release of a tellall book from a former employee.
An FBI investigation into the company notes the use of “tactics such as email hacking and extortion” were used in an attempt to railroad the book.
Heavily-redacted unclassified FBI documents note some individuals at HubSpot were concerned the book would embarrass the company and some people working there.
“Additionally, it was viewed as a financial threat to HubSpot, its share price, and the company’s future potential,” the documents say.
In July 2015 the company announced it had terminated its chief marketing officer’s employment, finding he had “violated the company’s Code of Business Conduct and Ethics in connection with attempts to procure a draft manuscript of a book involving the company”.
It also received the resignation of its vice president of content “before the company could determine whether to terminate him for similar violations”, and “sanctioned” its chief executive for not reporting the pair’s actions in a timely manner.
The book in question — Dan Lyons’ Disrupted: My Misadventure in the Start-up Bubble — detailed his time at the company, including anecdotes of the company’s showers being used as “sex cabins” on boozy Fridays.
The Office of the Victorian Information Commissioner (OVIC) made “preliminary inquiries” with Geelong’s council over its proposed use of a third party service provider earlier this year. An OVIC statement noted the city had included a clause acknowledging that the third party was subject to the Australian Privacy Act 1988, and that the city would remain responsible for any privacy breaches by the provider.
“Although the City of Greater Geelong can outsource marketing and communications functions, it cannot outsource its duty to protect the privacy of the people whose information it holds,” the OVIC statement read.
Geelong’s director of governance, strategy and performance Rebecca Leonard refused to confirm HubSpot as the provider, and said the city was viewing “alternative options”.
“Due to contractual obligations, we are not able to disclose the name of the proposed provider,” she said. “We will notify our members of the identity of any third-party communications providers the city chooses to use in future.”