Sun, Sep 24, 2006 - Page 11 News List

HP boss quits over spy scandal

`DISTURBING' Hewlett-Packard's co-chair resigned amid allegations investigators hired by the firm impersonated board members and journalists to plug a data leak


Patricia Dunn, co-chairwoman of Hewlett-Packard (HP), resigned in disgrace and chief executive Mark Hurd apologized for "disturbing" boardroom espionage on Friday as they prepared to answer to a congressional committee about the scandal.

Hurd told a news conference Dunn's resignation was effective immediately and that he would take over her duties as chair of the HP board.

"We believe it is in the company's best interest that she now step aside given the distraction her presence on our board continues to create," Hurd said. "We have never questioned her intentions, her integrity or her ethics."

Dunn had been due to step down in January next year, but her departure was moved up amid allegations HP's investigators impersonated board members and journalists to get private telephone records.

"Some of the findings uncovered are very disturbing to me," Hurd said at the company's office in Palo Alto, California.

"On behalf of HP I extend my sincere apologies to those journalists investigated and everyone who was impacted," he said.

Hurd said that his offer to testify with Dunn and HP lawyers before the House of Representatives' Energy and Commerce Committee in Washington on Sept. 28 had been accepted.

The hearing will focus on whether private investigators hired by HP spied on board members, employees and reporters in a campaign to plug a company leak.

At issue was whether the investigators impersonated people to gain access to their telephone records, secretly followed people, and tried to trace company e-mail to learn where it was forwarded.

California Attorney-General Bill Lockyer said last week that he had enough evidence to criminally prosecute people "inside and outside" the world's second largest personal computer company.

"This is a complicated situation and the more I look into it the more complicated it becomes," Hurd told reporters.

Hurd said he called the press conference and volunteered to testify before the congressional committee to show that any illicit tactics used to plug the boardroom leak were unsanctioned aberrations.

"We believe that these were isolated instances of impropriety and not indicative of how we conduct business at HP," Hurd said.

"What began as an investigation with the best intentions has ended up turning in a direction we could not have possibly anticipated. The people of HP don't deserve this nor do any of the people impacted," he said.

Hurd was adamant that he was never told of questionable investigative tactics along the way and that if anyone sent him details in a memo, he never read it.

The HP leak probe included impersonating people to get telephone records; picking through trash; sifting through company e-mail records, and surveillance of a board member and a reporter, said Attorney Mike Holston of a law firm brought in by Hurd to investigate what happened.

Social security number information supplied by HP was used to get some of the private telephone records, according to Holston.

Hurd sanctioned a ruse to send a reporter an e-mail from a fictitious disgruntled HP executive in the hope the journalist would forward it to the boardroom leak and they could track it, Holston said.

The bogus e-mail was imbedded with a tracer, but the ploy didn't work, according to the attorney. Hurd said he knew of the e-mail but not the tracer.

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