Speaking of the options-backdating debacle, Dan Gillmor wrote an incisive piece recently in PR Week, where he has a regular column. I met Dan several years ago at an O’Reilly conference, and I have much respect for the man. Few journalists have a better perspective on the Valley than he does, after so many years covering the tech beat for the Merc News. His latest PR Week column was entitled Silicon Valley’s image troubles run a lot deeper than just PR. Since that link is behind a paywall for most of you, let me provide some excerpts:

Like most others in Silicon Valley, I’ve watched Hewlett-Packard’s slow-motion train wreck – its unethical and probably illegal anti-leak spying program – with awe….

The current management is trying hard to spin its misbehavior into something that will let the company go back to business as usual. Good luck.

HP’s woes have shifted focus away from another corporate ethical debacle, namely the stock options scandal. That, you’ll recall, involves corporate chieftains and their obedient (or incompetent) directors, who’ve abused shareholders to further enrich the executives.

As a Silicon Valley resident, I’m sorry to say these affairs have the Valley and its longstanding arrogance in common. The 1990s stock bubble and its predations were bad enough. The latest news has made things worse…

Then he goes on to cite a metric that reminds us we’ve hardly heard the end of this saga….

…when the Valley’s most venerable big company gets caught running a sleazy spying operation, and when roughly half of the companies known to be under investigation for stock options shenanigans are in the tech business, you can’t just ignore reality…

He also mentions the troubles of a man who was previously one of the most renowned, iconish names in the Valley — top tech-industry lawyer Larry Sonsini:

….Sonsini’s role in the Valley’s dual debacles may be the most intriguing. As outside counsel for HP, he offered advice – not to worry, we’re doing nothing illegal, he effectively told the board as its spying operation neared public disclosure – that met a low standard indeed: What’s acceptable is what you can get away with, not what’s right.

Sonsini’s firm has also represented many of the tech companies under investigation in the options matter. No big surprise, given that the firm has been the Valley’s most influential and powerful for years, but it does raise more questions. Handling PR for Sonsini and his colleagues right now must be nightmarish, too.

In his closing, though, Gillmor succinctly lays out the real challenge for the tech establishment:

No doubt, the Valley’s image will recover eventually. But making that happen will require some honest introspection in executive suites and boardrooms, not just clever PR. How likely is that?

Makes one think of the company motto adopted not long ago by a certain new tech leader (whose name starts with “G”). Maybe that motto — “Don’t Be Evil” — wasn’t just window dressing? Maybe these kids had a deeper knowledge and insight about Valley culture than we realized….

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