CEO of Tiversa responds to House Oversight letter

Yesterday, House Oversight sent a letter to the FTC concerning the former’s investigation of Tiversa. The letter informed the FTC that  information Tiversa had provided to the FTC – information that formed a significant part of the FTC’s complaint against LabMD – might be “inaccurate,” “incomplete,” or “untruthful.” put some questions to Tiversa about the letter and situation, and received a response last night from Robert Boback, CEO of Tiversa.

In response to a question about whether  “Tiversa Employee B” in his testimony to Congress was Rick Wallace, Mr. Boback did not directly confirm that “Employee B” was Wallace, but replied:

Mr Wallace was terminated for cause by Tiversa on 2/28/14. We believe that his pleading the fifth is related to his actions outside of his scope of employment at Tiversa…..which are documented by law enforcement.

It is also important to note that Tiversa has freely, and voluntarily, answered all questions posed by Congress with (sic) exception or reservation.

Tiversa was also deposed by the FTC and LabMD counsel on two separate occasions. No current employee has ever plead the fifth, nor would they feel the need to.

Mr. Boback’s response seems to suggest that Wallace, whom he had identified as the analyst of the 1718 File, might have nothing significant to say about the 1718 File and that any potentially criminal conduct would not be related to the 1718 File.  But since LabMD called Wallace as a witness for the defense, it would seem that they think he has some important testimony to add. Michael Daugherty, CEO of LabMD, confirmed as much to, saying, “LabMD’s interest is in Mr. Wallace’s  work and actions as an employee of Tiversa, not outside, and he was subpoenaed for such.” also asked Mr. Boback to clarify where the 1718 File was actually found in February 2008 and whether it was found as part of the Dartmouth study. He did not respond directly to either question, simply stating:

Tiversa has found 7 locations where the 1718 file was found on file sharing networks with the first one found in Feb 2008.

While you might think where the file was found is not as important as the fact that it was found available for file-sharing, where the file was found and how the file came into Tiversa’s possession (and then the FTC’s possession) are somewhat crucial to LabMD’s defense. LabMD has asserted that the file is their property and that Georgia law considers it a crime for anyone to access or download the file from their computer – even if it is accidentally exposed. So where Tiversa reportedly found the file in February 2008 is key to part of their defense. If Tiversa acquired their property from their workstation, then, if I understand LabMD’s position, the FTC was receiving and using stolen information to build a case against LabMD, which calls the FTC’s case into serious question.  Parenthetically, I’d note that this case may be another reason the Computer Fraud and Abuse Act needs to be updated – to clarify whether accidental exposure of files entitles others to access or download them and/or use them with impunity.

Note that is not accusing Tiversa of computer theft, nor the FTC of receiving stolen property, and Tiversa has previously sued Daugherty  for defamation based on statements Daugherty has made about Tiversa and its conduct.  But given the controversy, in the interests of truth and justice, shouldn’t we know when, where, and under what circumstances Tiversa found and/or acquired the 1718 file that became the impetus for the FTC’s investigation and claims against LabMD? And shouldn’t we know whether the FTC relied on Tiversa’s information or conducted its own investigation to confirm any claims? asked Mr. Boback whether the House Oversight investigation or allegations that Tiversa’s information to the FTC might be “inaccurate” or “untruthful” would have any impact on Tiversa’s defamation lawsuit against LabMD. He responded:

As far as the defamation case, there is no correlation between the FTC/LabMD case. Regardless of whether the FTC is found to be overreaching or not with regard to LabMD, it does not allow Mr. Daugherty or LabMD to make defamatory comments about Tiversa.

In any event, the FTC’s case is now somewhat on hold until the issue of Rick Wallace’s immunity is resolved either by the House Oversight committee or by LabMD’s counsel making a motion for the FTC to grant immunity under their rules. For LabMD’s counsel to go through what sounds like a hassle to obtain immunity for Wallace suggests to this blogger that they must think he has some testimony that can significantly dent or rock the FTC’s case.

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