Hewlett-Packard Chairwoman Dunn Under Fire After Spying On Directors, Reporters

[mandy]

HP has now admitted to spying on its own directors' personal phone records in order to root out a leaker. It did so by using private investigators who engaged in "pretexting"—calling up phone companies and impersonating directors seeking their own records. HP late last week additionally admitted to spying on the phone records of nine journalists, including at The New York Times and Wall Street Journal, some of which date to 2005. HP's Dunn stands accused of orchestrating the investigation. Perkins quit in a rage over the surveillance and wants Dunn out as chairman; HP is painting him as an angry traitor with a vendetta against Dunn. Lying, spying, name-calling, finger-pointing—all of it is a tragicomedy that Shakespeare might've penned had he gotten an M.B.A.

The HP board of directors has long been a leaky ship. During the embattled reign of Fiorina—HP's flashy CEO who was forced out nearly two years ago—a blow-by-blow account of a board retreat, held off-site to discuss the company's most sensitive problems, appeared in The Wall Street Journal. Furious, Fiorina laid down the law to board members: the leaks had to stop. For a time it appeared that the leakers, whoever they were, had gotten the message.

But then, in January 2006, the online technology site CNET published an article about HP's long-term strategy. While the piece was upbeat and innocuous, it quoted an anonymous HP source and contained information that could've come only from a director...

full article: http://www.msnbc.msn.com/id/14736379/sit...ek/page/3/

THE board of Hewlett-Packard held an emergency meeting last night to decide the fate of Patricia Dunn, the chairman, hours after a powerful former director called for her resignation.

HP revealed last week that the company had hired investigators to look into the leak of sensitive boardroom information surrounding the resignation in 2005 of Carly Fiorina as chairman and chief executive. The company revealed that the investigators, or a company hired by them, had obtained the telephone records of certain board members by deception as part of their inquiry.

The attorney-general of California has begun an inquiry into the HP board investigation and the US Securities and Exchange Commission, the market regulator, is looking into the affair. The Federal Communications Commission is understood to be seeking documents from certain telecoms and internet companies believed to have been involved...

full article: http://business.timesonline.co.uk/articl...61,00.html

The California attorney general’s investigation into the purloining of private phone records by agents of Hewlett-Packard has revealed that the monitoring effort began earlier than previously indicated and included journalists as targets.

The targets included nine journalists who have covered Hewlett-Packard, including one from The New York Times, the company said...

In an interview Thursday about the state’s criminal investigation of the Hewlett-Packard matter, Attorney General Bill Lockyer said, “A crime was committed.” But he added: “It is unclear how strong the case is. Who is charged and for what is still an open question.”...

full article: http://www.nytimes.com/2006/09/08/techno...1157947200&en=4cafe0faefa8ee27&ei=5087%0A

[mandy]

With memories of ousted Hewlett-Packard CEO Carly Fiorina still fresh in the minds of many, news comes that the company's chairman, Patricia Dunn, has agreed to step down.

Dunn plans to leave HP on Jan. 18, 2007. HP President and CEO Mark Hurd will fill her post in addition to retaining his other positions with the firm.

Dunn, who climbed the corporate ladder from secretary to CEO at Barclays Global Investors after abandoning a career in journalism, appears to be another casualty of fallout resulting from a pretexting scandal that stirred up the company's board of directors.

"Dunn's resignation is both too little and too late," attorney Richard Cellini, vice president at Integrity Interactive, told the E-Commerce Times. "The only major action a company can take to protect itself is to have a compliance risk management program in place long before a problem like this happens."...

full article: http://ecommercetimes.com/story/EOEXGCIS...Post.xhtml

[mandy]

Latest update:

A day after Hewlett-Packard Co. (HP) chairman Patricia Dunn promised to step down for her role in a boardroom scandal, the state of California is continuing to investigate the actions of HP officials and the private investigators they used.

The state now has enough evidence to indict people within HP as well as contractors outside the company, confirmed Thomas Dressler, a spokesman for California Attorney General Bill Lockyer.

In addition, the California attorney general is now working with Massachusetts officials to pursue the case, according to a spokeswoman for the Massachusetts attorney general's office...

In an interview on The NewsHour with Jim Lehrer, Lockyer said, "People's identity was taken falsely... People accessed computer records that have personal information. That's a crime in California."..

full article: http://www.computerworld.com/action/arti...ticleBasic&articleId=9003253

[mandy]

The latest update:

Hewlett-Packard Co. chief executive Mark V. Hurd approved an elaborate "sting" operation on a reporter in February in an attempt to plug leaks to the media, according to an e-mail message sent by HP Chairman Patricia C. Dunn.

The document, one of more than two dozen e-mails obtained by The Washington Post, for the first time links Hurd to an internal investigation of media leaks that has led to criminal probes and will be the subject of a congressional hearing next week...

The e-mail sting operation, which was part of a wide-ranging two-part HP investigation that began in March 2005 and ended in May 2006, is the latest in a series of deceptive and possibly illegal tactics that reveal the lengths to which HP went to spy on people inside and outside the company to protect its image and secrets...

full article: http://www.washingtonpost.com/wp-dyn/con...01964.html

[Kristijntje]

Two articles on HP CEO Hurd's involvement in the scandal:

It was even more obscene than I had imagined it might be. I had held out hope that Hewlett-Packard CEO Mark Hurd would do the right thing and address the company’s leak-probe scandal directly and courageously during his opening keynote at last week’s HP Technology Forum in Houston. I knew it was a long shot. But I didn’t expect Hurd’s disdain for his users to be so blatant...

Hurd proceeded to talk about how HP wants to do three things all at the same time: grow, be efficient, and align the company’s human and financial capital with its strategy. There was no further reference to the scandal — not so much as a simple reassurance that he was committed to ensuring that the fiasco would not distract the company from serving its users...

full article: http://www.computerworld.com/action/arti...ticleBasic&articleId=265439

I just returned from listening to Mark Hurd the CEO of HP talk about the boardroom spying scandal engulfing the company and I have to say, I am disappointed.

Hurd said a lot of right things in his remarks. He apologized to the journalists who were spied on. He announced that Patti Dunn, the former chairman of the board who orchestrated the spying campaign, had resigned – as in “I pushed her out.” He admitted he had made a mistake by not supervising the leak inquiry more closely. And he announced concrete steps to make sure something like this never happens again.

But CEOs lead not just by what they say and do, but also by what they 0don’t say and don’t do, and in my view, this is where Hurd falls hugely short. For starters, Hurd may have said a lot of the right things today, but he has been virtually silent on the scandal up until now - and it is three weeks old. Condemning actions, pushing out wrongdoers and apologizing for mistakes counts as leadership right after a scandal breaks. Three weeks in it looks like standard corporate ass covering...

full article: http://blog.wired.com/27BStroke6/index.b...id=1561453

Mark Hurd, Hewlett-Packard Co.'s CEO, apologized today for "instances of impropriety" over how his company conducted an investigation of boardroom leaks, while attempting to distance himself from its seamy investigative practices. He also announced that Chairman Patricia Dunn is stepping down from the board, effective immediately

Faced with a deepening scandal over potentially criminal methods used to root out boardroom leaks, Hurd explained his role in the matter and said he first learned of the effort in July 2005. "This is a complicated situation and the more I look into it, the more complicated it becomes," he said at an afternoon news conference at HP's Palo Alto, Calif., headquarters. "As of today, we still do not have all of the facts."...

full article: http://www.computerworld.com/action/arti...ticleBasic&articleId=9003565

[mandy]

Update: somebody's in trouble! 

The California Attorney General's office late Wednesday charged former Hewlett-Packard Chairwoman Patricia Dunn, a second high-ranking HP executive and three others with felony fraud and conspiracy in the wake of a controversial internal investigation launched to determine the source of board leaks to the media.

Dunn was charged along with former HP counsel and ethics chief Kevin Hunsaker -- who has, like Dunn, since resigned from the computer maker -- and three outsiders: Ronald R. DeLia, managing director of Security Outsourcing Solutions, the Boston-based security firm that ran an investigation into press leaks for HP; Matthew Depante, who oversees a Florida-based firm known as Action Research Group (ARG) that allegedly brokered the phone record data; and Bryan Wagner, a Colorado-based employee of ARG...

full article: http://ecommercetimes.com/story/Itw0AiIq...Case.xhtml

[Anita]

WOW, this sounds like a soap opera... not real life!

[mandy]

Unbeknownst to my family and me, someone was scoping out our trash earlier this year -- someone hired by Hewlett-Packard Co.

The trash study was carried out in January by Security Outsourcing Solutions Inc., a Needham, Mass., investigative firm that H-P employed, according to a briefing H-P officials gave me yesterday. Whether the sleuths ever encountered my toddler's dirty diapers, H-P said it doesn't know.

I learned this -- and more -- as I sat in a conference room at H-P's outside law firm yesterday in San Francisco, where attorney John Schultz ran through a litany of snooping tactics H-P's agents used against me as part of its effort to identify which of its directors might be leaking news to the press. For around a year, Mr. Schultz told me, H-P collected information about me. H-P's investigators tried at least five times, he said, to get access to my home-phone, cellphone and office-phone records. In several instances, they succeeded: H-P now has lists of calls I made to people such as my editors, my husband, my insurance company and a reporting source employed by one H-P rival...

full article: http://online.wsj.com/public/article/SB1...?mod=blogs

[mandy]

The latest developments in this case:

A shareholder lawsuit against Hewlett-Packard Co. (HP) for attempting to spy on board members and reporters has been expanded to include charges of insider stock trading.

An amended complaint filed Wednesday in the Superior Court of California for Santa Clara County accuses HP Chairman and Chief Executive Officer Mark Hurd and seven other company executives of selling $41.3 million worth of HP stock at "inflated prices" shortly before the company revealed that its investigators had used questionable and possibly illegal techniques to gain access to personal records such as phone call logs.

The eight executives sold 1.7 million shares of stock between Aug. 21 and Sept. 6, according to the lawsuit...

full article: http://www.itworld.com/Man/2681/061130hpspy/index.html

[mandy]

Latest update:

The California Attorney General's Office said Thursday that Hewlett-Packard will pay $14.5 million to settle civil charges related to the company's now infamous spy scandal.

As part of the settlement, which was first reported by CNET News.com on Wednesday, HP will "finance a new law enforcement fund to fight violations of privacy and intellectual property rights" and adopt corporate governance reforms, the Attorney General's office said in a statement...

News.com reported last week that the Attorney General's office was considering bringing a civil action against HP. But the PC maker said that as part of the deal, the state will not pursue civil charges against the company, or against its current or former officers or directors. (It's not uncommon for prosecutors to file a settlement at the same time as a civil complaint.)...

full article: http://news.com.com/HP+settles+with+Cali...=nefd.lede