HP Spokesman Among Targeted During Probe
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SAN JOSE, Calif. - Hewlett-Packard Co. officials said Saturday that the company improperly accessed phone records of a corporate spokesman during its investigation into unauthorized leaks to the press.
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Two Hewlett-Packard Co. executives and an outside investigator were served subpoenas to appear before a House subcommittee Thursday to answer questions about the company's investigation into boardroom leaks.
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U.S. lawmakers on Thursday plan to   shine a spotlight on Hewlett-Packard Co.'s HPQ.N snooping   into the telephone records of some board members and   journalists, a practice that Congress may soon ban.
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By RACHEL KONRAD SAN FRANCISCO - Hewlett-Packard Co. Chairwoman Patricia Dunn is under scrutiny from business and ethics experts after she oversaw an invasive and possibly illegal effort to snoop into the home phone calls of fellow HP board members.
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Hewlett-Packard Co. Chairwoman Patricia Dunn said Friday that several of her fellow board members want her to remain on the job despite a criminal investigation into her efforts to plug a media leak.
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SAN JOSE, Calif., Sept. 16 -- Hewlett-Packard Co. officials said Saturday that the company improperly accessed phone records of a corporate spokesman during its investigation into leaks to the media.
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Hewlett-Packard Co. HPQ.N on   Thursday admitted that private investigators hired by its board   had acquired the phone records of several journalists in an   attempt to find a suspected boardroom leaker, the Financial   Times reported on Friday.
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The Hewlett-Packard Co. spying effort that has sparked criminal investigations was wide-ranging and included physical surveillance, photographs and spyware sent via e-mail, and it also targeted wives and other relatives of HP board members and reporters, according to a consultant's report prepared...
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(InfoWorld) - Hewlett-PackardÂ Chief Executive Officer and President Mark Hurd Friday confirmed that he approved a probe of HP employees, board members and journalists in an effort to find out who on the HP board was leaking confidential information outside of the company. However, Hurd said he did not approve the placement of tracing technology in an e-mail to a journalist, and apologized for this and any other "inappropriate" tactics -- such as physical surveillance and obtaining phone records under false pretenses, known as "pretexting" -- that HP undertook in its investigation to find the source of information leaks. "I extend my sincere apology to those journalists who were investigated and to everyone who was impacted," Hurd said. "The inappropriate techniques that were applied do not reflect the value of HP. ... These are not indicative of how we conduct business at HP." Hurd also said he accepted the resignation of Patricia Dunn from her position as chairman of the HP board and a director, effective immediately, and thanked her for her eight years of service on HP's board. Previously, Dunn was to stay on as a director of the board, but would step down as chairman in January. Hurd now takes on the role of chairman of HP's board. HP also appointed Bart M. Schwartz, a former U.S. prosecutor, as board counsel. His role will be to perform an independent review of investigative methods and the company's Standards of Business Conduct processes, and to make future recommendations for implementing best practices. He will report to Hurd and HP Chief Financial Officer Bob Wayman. Hurd said that HP had the "best intentions" when it began the first of two phases of a probe into boardroom leaks, but said it "turned in a direction we could not have anticipated" and he takes full accountability for what transpired. "I take this very seriously and commit to getting to the bottom of this," he said. "Our job is to fix this and get back to the job of running the business." Hurd did not field reporter questions at the press conference, at which HP searched attendees' bags and did not allow video cameras. Hurd plans to appear at an U.S. House of Representatives Energy and Commerce Committee Subcommittee on Oversight and Investigations hearing about HP's investigation on Thursday, Sept. 28., and said he did not want questions on Friday to interfere with that testimony. Mike Holston, a partner with law firm Morgan, Lewis & Bockius LLP, also spoke at the press conference on Friday. HP appointed the firm, which reports directly to Hurd, on Sept. 8 to investigate the tactics used by HP and third-party investigators in its probe. Holston said his firm has read more than 1 million pages of documents about two internal HP investigations -- called Kona 1 and Kona 2 -- and is still in the process of putting together the details of what took place. He declined to identify by name the people HP investigated. However, Holston did confirm that HP worked with two third-party organizations -- Security Outsourcing Services and Action Research Group -- to investigate employees, board members and/or former board members and their families, and journalists and their families. That investigation included physical surveillance, obtaining social security numbers of those being investigated to obtain phone records and the placement of e-mail tracing technology in an e-mail to one journalist, he said. Friday's news conference followed a steady stream of news reports over the last two weeks with revelations of actions HP and its outside investigators allegedly took to discover the source of company leaks to the media. Schemes allegedly considered included an attempt to plant spies inside the San Francisco newsrooms of The Wall Street Journal and CNET Networks Inc. posing as clerical workers or janitors, and a sting operation in which a fake anonymous source within HP would e-mail CNET reporter Dawn Kamamoto with a tip and track her e-mails to see if she contacted her other HP sources about the tip. Holston said Friday that while there was evidence that HP considered starting undercover operations in the newsrooms of the Journal and CNET, there is no evidence that such operations ever took place. He also confirmed that HP did try to track one reporterâs e-mail through tracing technology, but did not name the reporter involved and said there was no evidence at this time that the HP investigation team was aware that the tracer was activated.
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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-PackardÂs spying operation included monitoring an employeeÂs instant-messaging exchanges with a reporter at The Wall Street Journal.
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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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(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.
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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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Investigators for Hewlett-Packard Co. sought private telephone records of board members while hunting for leaks to the media of confidential company information, the computer maker said in a regulatory filing Wednesday.
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As the HP press leak scandal widens, e-mails obtained by the Washington Post indicate CEO Mark Hurd approved some of the tactics used. This included tracking of a reporter's e-mails via a Trojan horse.
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Hewlett-Packard has turned over thousands of documents to a U.S. House subcommittee investigating methods the company used to find out who was leaking company information to the media, a subcommittee spokesman said Monday.