HP's Dunn says others supervised probe
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In written testimony, former chairman drops names of CEO Mark Hurd, general counsel Ann Baskins and CFO Bob Wayman.
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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 Chairman Patricia Dunn will answer questions on the spying scandal that has embroiled her company during a House committee hearing on Capitol Hill next week.
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Prosecutors in California filed criminal charges yesterday against former Hewlett-Packard Co. chairwoman Patricia Dunn and four others implicated in a corporate spying campaign, including a private investigator from Needham.
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SACRAMENTO, Calif  - California's attorney general on Wednesday sought felony indictments against former Hewlett-Packard Co. Chairman Patricia Dunn and four others in a leak scandal that involved spying on board members and journalists.
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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.
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Hewlett-Packard Co.'s Chief  Executive Mark Hurd had approved a "sting" operation on a  reporter to investigate boardroom media leaks, The Washington  Post reported, and embattled Chairman Patricia Dunn said she  looked forward to "setting the record straight" soon.
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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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Hewlett Packard's former chairwoman Patricia Dunn faces criminal charges along with four others.
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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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(InfoWorld) - In one of his first public acts to address the burgeoning Hewlett-Packard Co. (HP) spy scandal, Chief Executive Officer Mark Hurd plans to brief reporters Friday about the findings of an analysis conducted by the company's law firm. HP retained Morgan, Lewis & Bockius for the outside analysis of the company's actions in trying to find the source of a boardroom news leak. The scandal led toÂ the resignation of company Chairman Patricia Dunn, who will turn over that job to Hurd in January. Dunn and Hurd have said they knew about the operation, but insist they never approved of the possible illegal methods used by third-party investigators to obtain communications records of reporters and some HP employees and directors. "What began as an effort to prevent the leaks of confidential information from HP's board room ended up heading in directions that were never anticipated," Hurd said in a written statement. However, company e-mail records seem to indicate that both executives knew about the investigators' "pretexting" practices while they were going on, according toÂ recent stories in the Wall Street Journal and The New York Times. Pretexting involves pretending to be someone to obtain their telephone records. In Friday's meeting, a representative from the law firm will share its findings, describing "exactly what took place and when," Hurd said. Dunn has also saidÂ she will share more information about the episode, promising to "set the record straight" about allegations that she oversaw the illegal operation. Morgan Lewis will also represent the company in government inquiries such as criminal investigations by the California and Massachusetts attorneys general, and by the U.S. House of Representatives. California Attorney General Bill Lockyer has said that he has enough evidence to indict certain people at HP and its contractors with crimes related to their methods in obtaining private phone records of reporters, board members and other employees. Â
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By MICHAEL LIEDTKE, THE ASSOCIATED PRESS  SAN FRANCISCO  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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Hewlett-Packard Co. Chairman Patricia Dunn will answer questions on the spying scandal that has embroiled her company during a House committee hearing on Capitol Hill next week.
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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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Patricia Dunn, the former chairman   of Hewlett-Packard Co., said she believed the investigation   into leaks had been authorized by the company's chief financial   officer and the methods used were legal, according to testimony   to Congress released on Wednesday.
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HP Chairman Patricia Dunn said on  Friday she had no idea private investigators hired by the  company had used questionable tactics to probe a boardroom  leak, and said she did not plan to resign but would do so if  asked by her board.
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Patricia Dunn was charged in connection with an illegal spying operation.