HP admits to spy op, lawyers dig in
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SEC and California want answers HP today divulged some of the grimy details behind its boardroom mole hunting operation.â¦
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(InfoWorld) - Hewlett-Packard board members and journalists were under physical surveillance by investigators trying to find out who was providing information to reporters, and private investigators tried to put tracking software on a journalist's computer to keep tabs on e-mail, according to a New York Times report. Patricia Dunn, HP's chairman, the company's general counsel and a staff attorney oversaw the internalÂ investigation of news leaks, the Times reported, citing anonymous sources who have been briefed on HP's findings so far regarding the secret investigation. It isn't clear how much involvement in the investigation there was by Dunn and others at HP, the Times reported Monday. HP announced last week that Dunn willÂ step aside as chairmanÂ in January, although she will remain as a director. Two others also have resigned from the board in the wake of the scandal. Over the weekend, HP identified Michael Moeller, director of corporate media relations, as one of two HP employees who was targeted in the internal investigation. "Investigators' suspicions were misdirected and unfounded," Robert Sherbin, HP's vice president for external communications was quoted as telling the Times on Sunday. The internal investigation reportedly was conducted in two stages, with the first from January 2005 to August of that year, which came up with nothing to go on, and then a second phase beginning in January 2006 after the technology news site of CNET NetworksÂ posted an article about an HP senior management meeting held that month. The board first clamored for an investigation into leaks of information to journalists in January 2005 following an article in The Wall Street Journal that spoke of board discussions regarding management reorganization and changes in the responsibilities to be handled by Carly Fiorina, who was then chief executive officer and chairman. She was ousted by the board in February 2005. Within days of that board action, The New York Times published a detailed account of a directors' meeting that was crucial to her ouster. Reporters from the Times, the Journal, CNET and Business Week have been informed by the California attorney general's office that HP investigated them. California and federal authorities are investigating HP's conduct and the California attorney general has said that charges are likely. HP has admitted that its the private investigative firm it hired used "pretexting," with investigators pretending to be journalists in order to obtain their personal telephone records. Even after a summary of the internal investigation was presented to leaders at HP, in Palo Alto, California, those in charge were unaware that possibly illegal methods had been used to obtain information, the Times reported. In May, the investigation's findings were relayed to the board of directors, including the allegation that its longest-running member, George Keyworth, was the source of the leaks to journalists. He refused to resign, but Vice Chairman Thomas Perkins, an influential and important Silicon Valley venture capitalist, was incensed over the probe and quit the board. He then turned his attention to pressuring Dunn to resign. His surprising departure was announced in a mildly worded HP statement that offered no clue as to the fractious nature of what had transpired, details of which began to emerge in news accounts earlier this month.
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(110 sec.) An update on the major players in the Hewlett-Packard spying scandal.
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Documents offer new details of HP's leak hunt, including info Patricia Dunn shared with private investigators.
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By Ryan Blitstein, San Jose Mercury News, Calif.  Dec. 7--The California attorney general's office will announce this afternoon it has reached a civil settlement with Hewlett-Packard regarding the computing company's board-spying scandal, CNET News.com has reported.
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Hewlett-Packard Co. HPQ.Nhas been   contacted by the U.S. attorney for the Northern District of   California regarding the company's probe into media leaks, the   company said in a regulatory filing made on Monday.
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Hewlett-Packard Co. (HP) has submitted thousands of documents to a House subcommittee looking into how the company tracked down boardroom leaks.
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Not so Agile Business Comment HP grows leakier by the hour: today's Pretexting Scandal episode, brought to you by an unnamed source of the NY Times reveals that the company "conducted feasibility studies on planting spies in news bureaus of [CNET and The Wall Street Journal] as part of an investigation of leaks from its board". Check out those janitors, before they check you out.â¦
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A US attorney general is investigating methods used by Hewlett Packard to spy on senior members of staff.
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(InfoWorld) - Although Hewlett-Packard's spying scandal has led to the resignation of four high-ranking officials and evoked comparisons in Congress to Watergate and fraud at Enron, it isn't likely to impede the company's long-term ability to compete, analysts and investors said. So far, these groups said, there has been scant evidence linking Mark Hurd to the legally questionable practice of pretexting, in which investigators probing news leaks impersonated board members and journalists in order to obtain their phone records. So long as Hurd is not shown to have approved or participated in those activities, HP is likely to emerge with its viability intact. "The problem has obviously been recognized and is being rectified, and with time the business will build back to normal," said Alex Vallecillo, a portfolio manager who follows technology stocks at Allegiant Asset Management. "We're all big boys and girls, and we understand what goes on in the corporate boardroom has no effect on the ability of [HP's] products and services to deliver value." Indeed, HP's shares gained 1.6 percent on Thursday, the same day Patricia Dunn, who was forced to resign as the company's chairman last week, was grilled before a hearing convened by the House Energy and Commerce Committee. Ten people involved with the investigation asserted their Fifth Amendment rights in declining to answer representatives' questions. Since Sept. 5, the day before the news of the scandal broke, HP shares have fallen 1.1 percent, compared with a 2.9 percent gain for the Nasdaq composite index and a 2.1 percent gain for the Dow Jones Industrial Average. Although the negative attention has been a distraction for HP, "that's a very short-term situation, which I expect to pass soon," said Sunil Reddy, senior portfolio manager at Fifth Third Asset Management. "All the cards are on the table right now; I'd be very surprised if anything new comes out." Analyst Rob Enderle of the Enderle Group, attending an event in New York where HP was showing off new PCs ahead of the Christmas shopping season, agreed. The corporate buyers he's talked to aren't likely to choose HP competitors as a result of the scandal, and he said he expected non-business customers to feel the same way. "It relates to behavior of folks the average consumer doesn't relate with and probably doesn't understand." That said, HP's investigative techniques have become the butt of plenty of jokes, Enderle said, in which business customers tell HP sales staff: "We're probably going to send this out to bid, but you probably already know that because you've been looking at my phone records."
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(InfoWorld) - A U.S. House of Representatives Subcommittee probing theÂ Hewlett-Packard Co. (HP) pretexting case has issued more subpoenas to compel witness testimony at a Thursday hearing. The Subcommittee on Oversight and Investigations of the Energy and Commerce Committee issued subpoenas Wednesday for five people identified as "pretexters," data brokers who sometimes obtain access to confidential records under false pretenses. HP has been embroiled in a scandal over its hiring of private investigators who engaged in possibly illegal pretexting to investigate news leaks from HP's board to reporters. Served with subpoenas, according to the Subcommittee, are: Bryan Wagner, a private investigator from Littleton, Colorado; Charles Kelly, of the CAS Agency in Villa Rica, Georgia; Cassandra Selvage of Eye in the Sky Investigations, of Dade City, Florida; Darren Brost, of Austin, Texas; and Valerie Preston from InSearchOf Inc., of Cooper City, Florida. Wagner was identified in a Wednesday Wall Street Journal article as a suspect in the pretexting of phone records of HP directors, employees and journalists who cover the Palo Alto, California technology company. The Journal reported that Wagner told an investigator that he smashed his computer to pieces with a hammer, destroying data that was saved on it. The article also said that the destruction of the computer may hamper an investigation by California Attorney General Bill Lockyer's office into possible illegal activity by people at HP or by the private investigators HP hired. The five who were subpoenaed Wednesday have been added to a list of witnesses that also includes HP's Chief Executive Officer and President Mark Hurd and former board chairman Patricia Dunn, who resigned last Friday because of the scandal. While Dunn and Hurd have volunteered to appear, two other HP executives involved in the investigation were subpoenaed: senior counsel Kevin Hunsaker and Global Security Manager Anthony Gentilucci. Hunsaker "left the company" and Gentilucci "resigned" effective Tuesday, said HP spokesman Ryan Donovan. Also subpoenaed are Ron DeLia, operator of Security Outsourcing Solutions Inc., a Needham, Massachusetts, private investigations firm, and Joe Depante, owner of Action Research Group, of Melbourne, Florida. HP has acknowledged hiring both those firms in its leak investigation and that they used pretexting to track down personal phone records. Â
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(InfoWorld) - Hewlett-Packard has entered into mutual agreements with two former directors caught up in theÂ board spying scandalÂ not to file lawsuits over the dispute. The company disclosed the agreement in a filing to the U.S. Securities and Exchange Commission on Thursday. In the same filing, HP said it has agreed to pay some of the directors' legal expenses in connection with the investigations. The SEC has asked for more information on the circumstances surroundingÂ Thomas Perkins' resignationÂ from HP's board of directors over the spying scandal, HP said in the filing. HP also revealed the terms under which Perkins and directorÂ George Keyworth left the board. They resigned after it was revealed that private investigators hired by HP may haveÂ used illegal methodsÂ to identify Keyworth as the source of leaks of board deliberations to the news media. Separately on Thursday, HP said chief executive officer Mark Hurd "has offered to appear" before a House subcommittee probing the scandal. Other HP executives, Chairman Patricia Dunn and others implicated in the scandal haveÂ accepted invitations to appearÂ at a Sept. 28 hearing. HP said in the SEC filing that it has entered into a "Mutual Release and Indemnification Agreement" with Perkins and Keyworth in which the two former directors agreed not to file claims against other directors, officers or employees of HP. In turn, the company agreed not file claims against them. HP will also pay legal fees Perkins and Keyworth may incur in cooperating with government investigations of the scandal. Besides the House inquiry, the California Attorney General and the U.S. Attorney for Northern California are conducting probes. The SEC filing also said Perkins and Keyworth reserve the right to take legal action against private investigation companies that HP allegedly hired to probe the source of board leaks. HP told the SEC on Sept. 6 that it had discovered those outside firms engaged in a possibly illegal practice called "pretexting" while digging into the personal phone records of directors, HP employees and journalists. The investigators' probe identified Keyworth as the confidential source. He initially refused to resign when confronted by the board in May, but he quit on Sept. 12. HP also said in the filing that it is cooperating with an SEC request for additional information about the circumstances of Perkins' resignation in May. HP's SEC filing at that time noted Perkins' resignation without elaborating. Perkins, who said he resigned in protest of the way HP was conducting its investigation, later lobbied the company to amend its notice with more detail. Hurd is set to lead a news conference Friday at HP headquarters in Palo Alto, California, to reveal the results of a separate investigation of HP's leak probe. After the scandal broke and reports surfaced about how involved HP executives may have been in overseeing the private investigators' activities, HP brought in the law firm of Morgan, Lewis & Bockius to investigate. A representative of the firm will present its findings at the news conference. News reports in recent days have revealed Hurd, Dunn and other HP executives were moreÂ involved in the leak probeÂ than they had earlier indicated. Â
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New reports implicate HP chief more deeply than previously thought.
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Hewlett-Packard Co settled claims on Wednesday with four reporters at the heart of a scandal involving claims that the world's biggest PC maker engaged in corporate espionage to plug a boardroom leak.
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Hewlett-Packard Co. (HP) has agreed to a $14.5 million settlement in the California civil lawsuit related to the company's spying scandal.
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The U.S. Department of Justice is asking questions about conduct by Hewlett-Packard Co. that has embroiled the technology company in controversy.
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(InfoWorld) - An attorney hired by Hewlett-Packard to investigate the conduct of HP and outside investigators has provided new details of his firm's investigation ofÂ news leaks from the HP board. Mike Holston, a partner in Morgan, Lewis & Bockius was hired Sept. 8 to conduct an independent investigation of the scandal and reports directly to HP Chief Executive Officer and President Mark Hurd. Morgan Lewis has reviewed some of the approximately 1 million pages of documents it received from HP and outside investigators hired by HP to trace the news leaks. It determined that HP Board Chairman Patricia Dunn authorized two separate investigations: one to probe leaks in 2005 and a second in 2006. The Morgan Lewis probe found that HP hired in 2005 Security Outsourcing Services (SOS), of Needham, Massachusetts, a private security firm, to probe the first series of leaks. This is the first official confirmation that HP hired that firm, even though it had been identified in several recent news stories. Two months into SOS's probe, HP's Global Security division also joined the investigation. The investigation concluded in July 2005 without being able to identify the source of those leaks. When CNet NetworksÂ reported Jan 23, 2006, on the details of a private board meeting, HP launched a second investigation with the help of SOS and HP Global Security. Dunn, Hurd, HP's General Counsel Ann Baskins, and Jim Fairbaugh, chief of Global Security, approved the second investigation. Dunn and Baskins were kept up to date on the course of the investigation over the next three months, Holston said. "It is now clear that the investigation included tactics that ranged from the review of HPâs internal e-mails and instant messages, to the physical surveillance of an HP Board member and at least one journalist, to the "pretexting" of telephone call information of board members, HP employees, and journalists," he said, adding that SOS's legal counsel informed HP that SOS's investigative techniques were legal. The investigators presented a draft report to HP in March 2006 identifying the source of the board leaks and detailing some of their investigative methods, including pretexting, which is obtaining access to private phone records under false pretenses. HP sent a copy of the report to its outside legal counsel and the report was disclosed at a May 18 board meeting. In a separate HP filing Sept. 6 with the U.S. Securities and Exchange Commission, the company disclosed that director George Keyworth was the source. While he acknowledged his role, Keyworth refused to resign at that May board meeting. HeÂ eventually resignedÂ Sept. 12. Holston went on to say that Tony Gentilucci, another member of HP's Global Security division and a member of the investigative team, turned over the Social Security number of an HP employee to SOS. SOS then turned that and other Social Security numbers over to Action Research Group, another private investigative firm, which used the numbers to help gain unauthorized access to private phone records. This is also the first acknowledgement that Action Research, of Melbourne, Florida, was involved, although it had been identified in news reports. Disclosing personal employee information is a violation of HP policy, and could result in Mr. Gentilucci's dismissal, said a source inside the company who declined to be identified. Holston also disclosed that investigators attempted to send an e-mail to a CNet reporter from a fictitious disgruntled HP employee that contained a hidden attachment, called a "tracer," that would track who the reporter contacted about the tip so as to identify her sources. HP did not disclose the identity of the reporter Friday, but she was identified in a Sept. 21 Washington Post article as Dawn Kawamoto. But Holston said it could not be determined whether the tracer was ever activated. Hurd acknowledged in his remarks that heÂ approved the fake e-mail schemeÂ but said he did not know it involved use of the tracer. And although another scheme to send spies into the San Francisco offices of CNet and The Wall Street Journal posing as clerical or janitorial workers was considered, there was no indication it was ever carried out, Holston said.