HP CEO Expected to Address Leak Probe
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By JORDAN ROBERTSON  SAN JOSE, Calif. - With Hewlett-Packard Co.'s stock tumbling, CEO Mark Hurd continued to face questions about what he knew of HP's efforts to ferret out a boardroom leak.
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(InfoWorld) - California Attorney General Bill Lockyer says criminal charges are "likely" in the scandal surrounding alleged spying involving the board of Hewlett-Packard Co. (HP), reports say. Meanwhile, HP board Chairman Patricia Dunn says she will not resign over the scandal and that she was "appalled" that contractors hired to investigate news leaks used potentially illegal methods, news reports say. The Wall Street Journal reported the HP board will hold a special meeting by phone this weekend to discuss the situation. HP is on the defensive after the disclosures this week thatÂ phone records of HP board membersÂ andÂ journalistsÂ were hacked to see who on the board discussed confidential strategy sessions with reporters earlier this year. The company disclosed in a U.S. Securities and Exchange Commission filing Wednesday that investigators, in order to identify the leaker, had used "pretexting," a method in which false pretenses are used to gain online access to others' phone records. The investigation determined that director George Keyworth was the source for a Cnet.com story in January about HP's strategy. Keyworth was asked to resign from the board in May but refused. Board member Thomas Perkins, a renowned Silicon Valley venture capitalist, did resign in May in protest over concerns with the HP board's handling of investigations into leaks of confidential information. Dunn, in an interview in the Journal Friday, said that while she ordered the investigation of board news leaks, she did not know the investigators hired to conduct the probe used pretexting. "I was appalled. And I'm going to apologize," to those journalists, she told the Journal. Because she was also subject to investigation, she said she could not have known what methods the investigators used. But while she does not plan to resign, Dunn will take into consideration what the board thinks she should do. "I serve entirely at the pleasure of the board,'' Dunn told the Journal. "If they determine it no longer is in the interest of shareholders [for me to remain on the board] I will do so.'' Charges could be filed under a California law prohibiting gaining unauthorized access to computer data or under another law prohibiting identity theft through unauthorized use of personal information, published reports say. The investigation is ongoing but prosecution is likely because a crime has occurred, Lockyer told the San Jose Mercury News. A bill to specifically outlaw pretexting is on Governor Arnold Schwarzenegger's desk awaiting his signature. The governor has until the end of September to sign or veto the bill, spokesman Darrel Ng told IDG News Service. Schwarzenegger hasn't taken a position on the pretexting bill, but only because it is one of hundreds of bills passed during the recently concluded session of the California Legislature, Ng said.
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California's attorney general is preparing to file criminal complaints today against ousted Hewlett-Packard Co. chairman Patricia C. Dunn and four others for their roles in the Hewlett-Packard Co. spying operation that surfaced last month, according to sources close to the case.
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The California attorney general expects to file charges against people at Hewlett-Packard Co and other companies in relation to the 'pretexting' scandal at HP, in which HP paid investigators who hacked the phone records of its directors and several journalists.
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Hewlett-Packard Co. HPQ.N   Chairman Patricia Dunn on Friday defended her role in an   inquiry into a boardroom leak that has led to a California   state investigation, and said she has no plans to resign unless   asked by the board.
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HP says it will cooperate with a request from a U.S. House subcommittee questioning  why CEO Mark Hurd sold HP stock just before a boardroom spying scandal broke in September.
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(InfoWorld) - In one telling moment during the recent Congressional hearings onÂ the Hewlett-Packard Co. board scandal, ousted chairman Patricia Dunn offered the "everybody does it" defense. Asked by one legislator about HPâs hiring private investigators who obtained phone records under false pretenses, a practice called pretexting, to identify whoâd leaked confidential information, Dunn replied, "I believe these [pretexting] methods may be quite common at companies around the country." If so, that is chilling to business ethicist Kirk Hanson. "As an ethicist Iâm horrified that HPâs managers relied on the assertion that it was borderline, but legal, and never asked whether it was ethical," says Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University, in Santa Clara, California. If HP adopted what Hanson called "black ops" as standard investigative practices, he wonders how many other companies have done it. HP, some of its employees and companies it hired to investigate boardroom leaks to news media still face potential civil and criminal liability for their actions. Other companies find themselves in a dilemma over how to control information within the law. Companies may have a moral or legal responsibility to respect peopleâs privacy, but they also have a legal and fiduciary responsibility to protect confidential business information. And under the federalÂ Sarbanes-Oxley ActÂ in effect the last four years, they have obligations to investigate certain leaks, Hanson says. Companies have a right to investigate their own employees if theyâre suspected of leaking information. Employees should presume no right to privacy in their use of company computers, e-mail programs or telephones. One commonly used tactic to probe security breaches doesnât even involve electronic snooping. Companies exclusively give suspected leakers seemingly important but relatively benign information. If it turns up in the media, the company has identified the leaker. But Hanson sees a bright line separating how a company can investigate its own employees and how it can investigate outsiders. The HP reaction to leaks to reporters contrasts with the recent practice of Apple Computer Inc. when proprietary information got out. Although Apple is known for its devotion to secrecy, it went to court rather than to private eyes when confidential information leaked in 2004. Apple, of Cupertino, California, sued in state court to force two Web sites to reveal sources for stories they posted about a possible new Apple product. A state appellate court ruled May 26 that the writers on those Web sites enjoy the same First Amendment rights as mainstream journalists and, thus, were protected by Californiaâs shield law from having to reveal their sources. Apple dropped the case. It did not reply to a request for comment on this story. The Sarbanes-Oxley Act requires companies to develop a whistle-blowing reporting system so employees can raise issues about improper behavior within the company, said Hanson. That has prompted companies to develop an investigative capability in the event improper or illegal activity is alleged. "So (under SOX), companies have developed much enhanced investigative capability," he said. Companies also have to keep confidential information safe because disclosure could be a criminal act or a breach of fiduciary responsibility, said Rob Enderle, senior analyst at Enderle Group, a technology market research firm. If word leaks that a board is contemplating an acquisition, for instance, the company or people in it could be prosecuted for insider trading if people used that knowledge to make stock trades. Given the potential liabilities, corporate investigations of leaks are "common," said Enderle. "The stuff with the pretexting goes to the extreme, but looking at company phone records or e-mails, that is very common. Hiring an outside contractor is also common." In fact, leak investigations enjoy broad support among corporate directors. In a September telephone survey of 226 board members at publicly traded companies in the U.S., 73 percent said a company's chairman should be empowered to use any legally available means to identify a board-level leaker, according to Ponemon Institute LLC. About 71 percent of the respondents said it would be okay for a board chairman to review the e-mail messages of other members, in addition to other types of confidential data stored on company computers. Fifty percent said that reviewing telephone records of individuals obtained via pretexting is proper as long as that approach hasn't been outlawed. But HPâs tactics of tailing reporters, attempting to install a tracer on a reporterâs e-mail program, pretexting numbers of people outside the company and even considering planting spies in newsrooms as janitors or clerical workers is "bizarre" to Rick Belluzzo. "The reaction by HP was totally out of proportion with the situation," said Belluzzo, chairman and CEO of Quantum Corp., a network storage equipment maker. His rÃ©sumÃ© includes president of Microsoft Corp. and a 23-year stint at HP, where he rose to the position of executive vice president of its computer division. While he understands the importance of keeping certain information confidential and making employees and directors sign confidentiality agreements, HP overreacted to information leaks that are sometimes going to happen anyway. "Itâs an impossible task to control information flow. Some leaks are inevitable," Belluzzo said.
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Hewlett-Packard Co. HPQ.N Chief   Executive Mark Hurd told lawmakers on Thursday there were no   excuses for a probe of boardroom leaks that led investigators   to obtain private telephone records deceptively.
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HP CEO Mark Hurd knew of plans for a disinformation campaign designed to find the source of leaks from boardroom talks, The Washington Post reported today.
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Members of Congress plan to grill current and former executives of Hewlett-Packard Co. today about their roles in a surveillance scandal and to determine whether broader ethics or privacy laws are needed to safeguard consumers.
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SAN FRANCISCO -- Hewlett-Packard Co.'s chief ethics officer learned the company's detectives were relying on shady tactics to gather private phone records long before a boardroom battle over media leaks triggered criminal and congressional investigations .
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By Jordan Robertson  California's attorney general said Tuesday that Hewlett-Packard insiders are likely to face criminal charges, putting a damper on the news HP was reshuffling its board because of the scandal surrounding its efforts to root out media leaks.
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(InfoWorld) - Hewlett-Packard Co. Chairwoman Patricia Dunn, a former company lawyer, and three outside investigators wereÂ charged Wednesday in CaliforniaÂ on felony charges related to the conduct of an investigationÂ to track down news leaks from the HP board that allegedly broke state law. California Attorney General Bill Lockyer's office said charges have also been filed against Kevin Hunsaker, a former senior lawyer at HP; Ronald L. DeLia, a Boston-area private detective; Matthew DePante, manager of Action Research Group, a Melbourne, Florida, information broker; and Bryan Wagner, a Littleton, Colorado, man who is said to have obtained private phone records while working for Action Research. TheÂ charges were announced at a press conference held Wednesday at the California Department of Justice. The charges include using false or fraudulent pretenses to obtain confidential information from a public utility, wrongful use of computer data, identity theft, and conspiracy to commit each of those crimes. All of the charges are felonies. "One of our state's most venerable corporate institutions lost its way as its board sought to find out who leaked confidential information to the press," said Lockyer in a statement, released Wednesday. "In this misguided effort, people inside and outside of HP violated privacy rights and broke state law." Lockyer's office has been investigating the spying allegations because HP is based in Palo Alto, California. The U.S. Attorney's Office in San Francisco and the Federal Bureau of Investigation have been conducting separate investigations of HP. In a statement released Wednesday in advance of the Sacramento press conference, HP said it was continuing to cooperate with state and federal investigators. The private investigators hired by HP allegedly used "pretexting," pretending to be someone they are not, to obtain the telephone records of HP directors, other employees and journalists who cover the company in an attempt to find out who from the board provided information to the reporters. The scandal has attracted the attention of the U.S. Congress.Â On Sept. 28,Â Dunn told the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee that she believed employees and lawyers who said that the HP's leak investigation complied with the company's standards of conduct. The subcommittee was holding hearings into the use of pretexting. The committee passed a federal ban on pretexting but the Congress adjourned before the full House or the Senate voted on the legislation. When questioned about the techniques used to track down the leaks arose in the latter part of the investigation, Dunn said, she passed concerns to company Chief Executive Officer Mark Hurd. Before then, the company's lawyers had assured her the techniques were being done "legally and properly," she said. "At no time in the investigation did I authorize its methods," Dunn said. "I asked this to be done in the HP standard way." On his part, Hurd told the subcommittee that he was not aware of the details of the techniques being used. He said he did not read a report from the investigating team that detailed the use of pretexting. Ann Baskins,Â who resigned right before the subcommittee hearing as HP's senior vice president and general counsel, and Hunsaker both asserted their rights not to testify under the Fifth Amendment of the U.S. Constitution during the hearing. Also taking the fifth before the subcommittee were Delia, Wagner and Action Research owner Joe DePante. Dunn faces these criminal charges at a difficult time in her personal life. Dunn, is scheduled to begin chemotherapy Friday for a recurrence of advanced ovarian cancer, according to a Wednesday report in the San Jose Mercury News. She was diagnosed with ovarian cancer in 2004 and had been treated for breast cancer and melanoma dating back to 2001, the paper reported. (Stephen Lawson and Robert McMillan contributed to this story) Â
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Hewlett-Packard Co. HPQ.N said   on Monday it has been contacted by U.S. federal prosecutors   seeking information about the company's investigation into   boardroom leaks to the press.
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Hewlett-Packard Co.  said  on Monday it has been contacted by U.S. federal prosecutors  seeking information about the company's investigation into  boardroom leaks to the press.
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Hewlett-Packard Chief Executive Officer Mark Hurd knew of plans for a disinformation campaign designed to find the source ofÂ leaks from boardroom discussions, The Washington Post reported Thursday.
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The scandal over Hewlett-Packard Co.'s conduct in investigating press leaks started affecting its business yesterday for the first time, weighing down its stock price and raising questions about the future of its leadership.