It is notoriously difficult for business executives to jump into politics. California Senate hopeful Carly Fiorina's Iranian connection provides a textbook illustration of why.
As the CEO of a publicly-traded company, tech stalwart Hewlett Packard, Fiorinia had a fiduciary duty to maximize profits for her shareholders. It takes immense hubris to think that can be reconciled with a future in public service. But then Silicon Valley is a famously arrogant place; that's why this election cycle has two political novices, Fiorina and former eBay CEO Meg Whitman, trying to leverage corporate experience into elected office.
Fiorina's having a rough time of it. Her latest problem: defending herself against charges that HP made loads of money during her tenure by selling its products in Iran despite a U.S. trade embargo. "To her knowledge, during her tenure, HP never did business in Iran," Fiorina's campaign told the San Jose Mercury News.
Really? Fiorina had no idea? That's odd, since...
- Fiorina in 2003 noted Middle East sales were defying global trends, and, as the Merc notes, HP's partner there issued a press release saying sales topped $100 million and that "the seeds of the Redington-Hewlett-Packard relationship were sowed six years ago for one market - Iran."
- Three of the three HP partners in the Middle East contacted by Christopher Stewart for a story in Portfolio magazine's August 2008 issue readily agreed to ship printers to Iran. Portfolio notified HP of the incidents, but the company didn't condemn them, instead refusing comment. Fiorina was gone as CEO at this point, but Portfolio noted that diversion of American products to Iran trough Dubai had been going strong for many years.
- HP had an office in the Dubai free-trade zones notorious for funneling American goods to Iran, Portfolio reported — so it had ample means to be aware of how its products were being shipped.
- After the SEC noticed the prevalance of HP products in Iran, it asked the company about the matter, and got back a letter from the company saying its Dutch subsidiary sold $120 million to Iran in 2008.
- Finally, in January 2009, HP severed ties with Redington Gulf, the distributor that had publicly bragged about its Iran trade six years earlier.
If Fiorina appears to have turned a blind eye to shipments of her products into Iran, that's what she was supposed to do, as CEO; as both the Merc and Portfolio note, the company most likely stayed on the legal — and profitable — side of a gray zone, a loophole in U.S. trade sanctions. But it will be tough to look patriotic while explaining that to voters. Fiorina had better hope her fellow Republicans continue to be more interested by the supposed dangers of universal health care and illegal immigration than by the War on Terror launched by their party's last president.