In early April, the White House announced it had misplaced—and may have deleted—more than 5 million e-mail messages from its archives. The missing files may have contained crucial information pertaining to an investigation into the firing of eight U.S. Attorneys.
The White House says that, in accordance with the Hatch Act of 1939, which prohibits federal employees from using government resources to promote political parties, many staffers had two e-mail accounts—one for White House work and another for the Republican National Committee—and were not properly informed about how their e-mail in those accounts should be archived. As a result, messages improperly sent to RNC addresses were purged.
That excuse wouldn't fly in the business world. E-discovery laws in effect since last December mean companies can no longer claim that finding old e-mail and other documents is an unreasonable burden. "The courts have spoken," says Barry Murphy, principal analyst for Forrester Research. "There is technology to manage this, and companies have to comply."
See also: E-Discovery: What You Need To Know
In a legal or regulatory fight, you'd better be able to produce any requested records, and fast. Morgan Stanley tried the missing-files argument in 2005 after billionaire Ron Perelman sued the investment firm over a business deal gone bad, and lost the caseto the tune of $604.3 million. (The verdict was overturned in late March, but could still be enforced.)
So companies should review their e-mail archiving strategies and deploy tools to make messages searchableyet most do only the bare minimum to comply with the new laws, according to Murphy. That's risky, says Jim McGann, vice president of marketing for Index Engines Inc., an e-mail archiving services provider. Finding specific e-mail messages on storage tapes is time-consuming and expensive, with retrieval costs as high as $500 per tape. And the clock is ticking. "This is the year when a lot of these new requirements are being pushed down to IT," says T.M. Ravi, president and CEO of Mimosa Systems, another e-mail archiving services provider.
But deploying e-discovery tools—a market Forrester's Murphy says will top $4.8 billion by 2011—is only one piece of the puzzle. Equally important are policies that stipulate which e-mail messages should be kept, how they should be indexed and when they can be destroyed. At many companies it will be up to the CIO to create cross-functional teams including legal, IT, finance and appropriate lines of business to discuss information use and storage. And even the best archiving policy means nothing without proper auditing to ensure that the rules are followed. "Too often," says Murphy, "companies have policies in place and expect users to act in accordance. Given the amount of e-mail we get, it's impossible to remember to consistently act on those policies."
As for the White House debacle, the Presidential Records Retention Act of 1978 mandates that all records related to activities, policies and decision-making must be preserved. In late April, the Democratic National Committee sued the Justice Department over its refusal to turn over its e-mail correspondence with the Republican Party to Congress. That drama is ongoing.