Probe Scandal Puts HP Chief on Offensive; Dunn Calls Tactics 'Appalling,' Claims Board Support
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By MICHAEL LIEDTKE   Associated Press writer  SAN FRANCISCO -- Battling to keep her job, Hewlett-Packard Co.
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(InfoWorld) - The attorney for ousted Hewlett-Packard chairman Patricia Dunn fired back Wednesday at public comments made by board rival Thomas Perkins about theÂ HP pretexting scandal. "Mr. Perkins...has made the biggest mistake of his career. He is a bully, and he is bullying the wrong people," said James Brosnahan, attorney for Dunn, in a statement in response to what Brosnahan called a "gratuitous attack" on his client in a speech Perkins gave Tuesday in San Francisco. In an appearance at the VentureOne Outlook Conference, a gathering of venture capitalists, Perkins said the HP dispute about how to control leaks of board deliberations to the media was really a fight for control of the board, which Dunn won, according to media reports of his speech. Perkins also lamented that many corporate boards, including HP's, have turned from being "guidance" boards into "compliance" boards. Rather than advising the company on how to run its business as a "guidance" style director, "compliance" directors are increasingly focused on maintaining compliance with U.S. Securities and Exchange Commission regulations governing publicly traded companies. He described Dunn as a compliance-style director, according to the reports. Dunn was indicted in October 2006 on four felony counts in California state court for authorizing an investigation into HP board member leaks to the media. Investigators hired by HP allegedly used false pretenses, or "pretexting," to get phone companies to divulge calling records for people they were investigating. A former legal counsel for HP and two private detectives hired by HP are also facing trial. The scandal broke in September 2006 because Perkins demanded the company publicly state, in an SEC filing, why he quit the board four months earlier. Because the state case is still awaiting trial, Dunn can't directly respond to Perkins' remarks, but her attorney had plenty to say. "Mr. Perkins generated an attack on Patricia Dunn, hired lawyers, hired a public relations firm, and all because his colleague on the Hewlett-Packard board [Jay Keyworth] was found to be leaking information. Now he is attempting to further prejudice the public against Patricia Dunn," Brosnahan wrote. Perkins quit the board when Keyworth was outed as the director who leaked information to the media. In his statement, Brosnahan said Perkins is likely to be called as a witness in Dunn's trial. He also accused Perkins of publicly criticizing Dunn to draw attention to Perkins' soon-to-be-published book, which is expected to touch on the pretexting scandal. A call to Perkins' office was not immediately returned.
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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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SAN JOSE, Calif. -- Hewlett-Packard Co. said Tuesday that Patricia Dunn will step down as chairwoman of the computer and printer maker in January amid a widening scandal involving a possibly illegal probe into media leaks. She will be succeeded by CEO Mark Hurd.
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Former Hewlett-Packard Chairwoman Patricia Dunn, the company's former senior  counsel and three others face four charges each in connection with the boardroom leak scandal at HP, according to The New York Times.
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(InfoWorld) - A day after Hewlett-Packard Co. (HP)Â chairman Patricia Dunn promised to step down for her role in a spy scandal, the state of California is continuing its effort to indict her and the private investigators she used. Dunn's actions were not merely unethical but actually violated the law, and the state now has enough evidence to indict people both within HP and contractors outside the company, according to Thomas Dressler, a spokesman for California Attorney General Bill Lockyer. In her efforts to discover the source of press leaks about board deliberations,Â HP has acknowledged that Dunn hired a private investigation firmÂ to pose as the 10 suspected board members and journalists in order to convince the phone company to disclose private phone records. This is a practice known as pretexting. In an interview on The NewsHour with Jim Lehrer Tuesday, Lockyer said that under California law, people involved in the probe could be charged with crimes both for falsely taking another person's identity and for accessing computer records with their personal information. Dressler confirmed Lockyer's comments. HP hired investigation firm Security Outsourcing Solutions Inc. (SOS), which shares its Boston offices with a law firm called Bonner, Kiernan, Trebach and Crociata, according toÂ a report in The New York Times that sited sources close to the case. The Times also said that the California and Massachusetts attorney generals were working together on the case. Dressler declined to confirm the name of the security firm HP hired, or whether California and Massachusetts are working together on the case. "I'm not going to deny it, but beyond what the attorney general said I'm not going to comment. It's not prudent for prosecutors to mention names before bringing charges," Dressler said. A call to SOS on Wednesday was answered by a woman who recited the name of the law firm, but denied the two businesses were connected. She declined to give her name, and said that no one was immediately available for comment. Ironically, an SOS newsletter posted on the firm's Web site warns corporate executives that their privacy is at risk since their Web surfing and e-mail records can be traced by Internet browsers and cookies. It advises clients to shield their identities by using a Web site called Anonymizer.com. Â
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(InfoWorld) - Hewlett-Packard chief executive officer Mark Hurd blamedÂ the scandalÂ that has besieged his company on "a rogue investigation" that got out of hand, in an advance copy of his Congressional testimony released by a House Subcommittee on Wednesday. "How did such an abuse of privacy occur in a company renowned for its privacy? The end came to justify the means," Hurd wrote. "The investigation team became so focused on finding the source of the leaks that they lost sight of the privacy of reporters and others. They lost sight of the values HP has always represented." Former HP Chairman Patricia Dunn,Â forced to resignÂ Sept. 21 because of the scandal, defended in her testimony her decision toÂ investigate the leaksÂ of confidential board discussions to the news media. In her testimony, Dunn wrote that she knew investigators were obtaining the phone records of people it was investigating. Lawyers for HP and for an investigation firm carrying out the probe assured her the tactics were legal, she wrote. "I was fully convinced that HP would never engage in anything illegal," she wrote. "Given that attorneys were unambiguously overseeing the investigation ... reinforced my understanding that the investigations were being handled appropriately." Both are among severalÂ witnesses expected at a hearingÂ before the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee on Thursday in Washington. The committee is looking into the practice of "pretexting," or using false pretenses to gain access to confidential records. Investigators hired by HP to find the source of leaks engaged in pretexting to get hold of the phone records of directors, HP employees and reporters who cover the Palo Alto, California, technology company. Hurd, echoing comments he made in a news conference last Friday at HP's headquarters, said he was determined to get to the bottom of this episode and to try to restore HP's image. "I pledge that HP will take whatever steps are necessary to make sure nothing like this ever happens again," he wrote, "and that this company will regain not just its reputation ... but its pride." Although much of the criticism of the scandal surrounds the tactics used by the investigators, Dunn wrote in her testimony that equal consideration should be given to the leaks from within the company that damaged HP. HP's board was notorious for its leaks to news media and such disclosures made it difficult for the board to deal with important issues candidly, she wrote. Dunn explained that board deliberations on the selection of a replacement for former CEO Carly Fiorina in 2005 were leaked. She cited a BusinessWeek magazine story "disclosing opinions about various candidates and revealing details about ... the search process." "If you were a top CEO candidate, would you want to work for a company whose board could not be trusted to keep such information confidential? HP is very lucky to have been able to recruit Mark Hurd under such circumstances," Dunn wrote. "I wish fervently that none of this had ever happened," Dunn continued. "But boards have an unquestionable obligation to take steps to prevent [leaks]. That certain steps taken during the investigation went well beyond what was appropriate does not undermine the importance of the board's mission in this matter." Hurd also outlined several steps the company is taking internally to clarify its privacy policy for employees and to emphasize it in employee training programs.ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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(InfoWorld) - Several people connected to the Hewlett-Packard Co. (HP) board scandal have been invited to testify at a U.S. House subcommittee hearing Sept. 28 on the issue ofÂ pretexting to get confidential phone records. Patricia Dunn, chairman of HP's board, and Ann Baskins, HP's general counsel, have been invited to testify at a hearing of the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee in Washington, D.C. Also invited to testify is Larry Sonsini, lead outside counsel for HP, and Ronald DeLia, managing director of Security Outsourcing Solutions Inc., a Needham, Massachusetts, corporate security company identified as having been hired by HP to investigate who on the board leaked news of a confidential strategy session to the media. HP and outside firms it hired to conduct the investigation are facingÂ possible criminal charges in California for using pretexting to surreptitiously gain access to the personal phone records of HP directors and nine journalists. Dunn has agreed to resign as chairman come January as a result of her role in the investigation, but will remain on the board. Sonsini, chairman of the law firm Wilson Sonsini Goodrich & Rosati, advised HP on the legality of its investigation of the leaks. The committee is considering federal legislation to outlaw pretexting in the U.S. and put other limits on the work of so-called data brokers who gather information for clients. Sometimes their means are duplicitous, such as impersonating an individual to gain unauthorized access to confidential records. HP is being investigated by the Attorneys General of California and Massachusetts, the U.S. Federal Bureau of Investigation and the U.S. Attorney's office for actions it took to investigate the board leaks that may have violated the law. Terry Lane, a spokesman for the House committee, said the witnesses have not been subpoenaed to testify but could not say what the committee might do if they declined the invitation. Although HP has said it is willing to cooperate on investigations into the pretexting case, spokesman Mike Moeller said the company would not comment specifically on whether Dunn and Baskins would accept the invitation to testify. Neither of the others responded to a request for comment. Â
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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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In an advance copy of his Congressional testimony released by a House Subcommittee on Wednesday, Hewlett-Packard chief executive officer (CEO) Mark Hurd blamed the scandal that has besieged his company on "a rogue investigation" that got out of hand.
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(InfoWorld) - Huge, ugly scandals have a way of planting new terms in the lexicon. Consider the way the Watergate affair of the early 1970s made -gate an all-purpose suffix denoting scandal, or the way last yearâs Sony digital rights management imbroglio made ârootkitâ an unlikely term heard around the dinner table. Thanks to Hewlett-Packardâs daring board of directors, weâve got another one: âpretexting,â which describes the technique of impersonating someone else to obtain personal information. In the case of HP, that personal information was the private phone records of board members and journalists, unknowingly caught up in an all-out effort by HP Chairwoman Pattie Dunn to plug press leaks at the company. Last week, HP announced a board shakeup to try to put the whole mess behind it, but it may be looking over its shoulder for some time, experts say. Dunn will relinquish her chair to CEO and President Mark Hurd in January. The scandal created two other board vacancies: director Thomas Perkins quit in protest last May over the companyâs investigation; and director George Keyworth, identified as the source of the leak, resigned the same day as Dunnâs announcement. At print time, Californiaâs Attorney General Bill Lockyer said that the state was working with authorities in Massachusetts and that he had the evidence he needs to indict people connected to the pretexting scandal both inside and outside of HP. The scandal is a teachable moment for American business, said Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University. âIt is a cautionary tale about how companies conduct investigations into employee conduct and give direction to outside vendors,â Hanson said. This case will help them clarify what they can and cannot do to protect their interests. âExpect the word pretext to begin showing up in corporate handbooks,â Hanson said.
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The attorney for the ousted HP chairman fired back  at public comments made by board rival about the HP pretexting scandal.
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(InfoWorld) - Former Hewlett-Packard Co. chairwoman Patricia Dunn made a brief court appearance Thursday in Santa Clara County, California, to face four state felony charges in the HP boardroom scandal. Superior Court Judge Alfonso Fernandez scheduled her arraignment for Nov. 17, at which she will enter a plea to charges in the case. Also making an initial court appearance earlier in the day was Kevin Hunsaker, HP's former ethics counsel, who surrendered, was booked and was scheduled for an arraignment December 6, according to the office of California Attorney General Bill Lockyer. Three private investigators hired by HP to investigate suspected leaks to news media by HP directorsÂ were also charged Wednesday, but since they are from out-of-state, their court appearances will likely occur sometime next week, Lockyer's office said. Each of the five defendants face charges of fraudulent wire communications, wrongful use of computer data, identity theft and conspiracy. The state alleges that Dunn and Hunsaker authorized an investigation of leaks and hired the private investigators. The investigators allegedly obtained, under false pretenses, the phone records of individuals targeted in their investigation, including HP directors, some employees and journalists who cover the technology company.ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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Hewlett Packard's former chairwoman Patricia Dunn faces criminal charges along with four others.
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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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The ousted chairwoman of Hewlett-Packard Co. told a House subcommittee today that some of the tactics used by the computer giant in its surveillance scandal are employed by other American companies.
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(InfoWorld) - Patricia Dunn, Hewlett-Packard's embattled chairman, will be relieved of those duties after the board's Jan. 18, 2007, meeting, but will continue as a director. The announcement came Tuesday morning, followingÂ meetings of the boardÂ over the weekend and Monday. Mark Hurd, HP's chief executive officer and president will also take on the chairman's job. Richard Hackborn, who has been on the board since 1992, has been chosen as the lead independent director as of January. Dunn has been under intense pressure to step down as chairman after it came to light last week that the board of directorsÂ carried out an investigationÂ to determine who among the board leaked confidential information to journalists. The board admitted in a filing with the U.S. Securities and Exchange Commission (SEC) that the internal probe involved "pretexting," where employees of an investigative firm hired by the company pretended to be reporters to gain access to their telephone records. Federal authorities, including the U.S. Department of Justice and a congressional committee,Â are questioning the board's conductÂ in the probe and the California attorney general has said thatÂ charges are likely to be filed. "The recent events that have taken place follow an important investigation that was required after the board sought to resolve the persistent disclosure of confidential information from within its ranks. These leaks had the potential to affect not only the stock price of HP but also that of other publicly traded companies," Dunn said in a written statement released by HP. "Unfortunately, the investigation, which was conducted by third parties, included certainÂ inappropriate techniques. These went beyond what we understood them to be, and I apologize that they were employed." Dunn pledged to take action to make sure that such "inappropriate investigative techniques" do not happen again. "They have no place in HP," she said in the statement.