September 25, 2006 3:45 PM PDT

Five questions for HP

Hewlett-Packard CEO Mark Hurd has finally spoken about the company's controversial leak probe, but there are plenty of questions that didn't get answered at a Friday press conference.

HP did take some steps toward answering critics, securing Chairman Patricia Dunn's resignation and offering up some details of its understanding of what happened. It confirmed that, as part of its effort to uncover the source of unauthorized leaks to the news media, it used physical surveillance and sent out a bogus e-mail tip with an attachment designed to put a trace on the recipient. The details came on top of earlier admissions that HP used the legally dubious practice of "pretexting," or using false pretenses, to obtain the phone records of journalists, board members and two HP employees, as well as others.

But there is still plenty left to learn about HP's leak hunt. More answers could come on Thursday, when Hurd, current and former HP employees and contractors are slated to testify at a congressional subcommittee hearing. Here are some of the questions that could be asked at the hearing:

1: Was there a Kona 1.5?

A continuing question is: Just what was the time frame for HP's leak probe? And, if it was halted, what prompted its resumption in January 2006?

Hurd and Mike Holston, HP's outside lawyer, both said on Friday that the company's investigation was divided into two phases. The first phase of the hunt--dubbed Kona I--ran from early 2005 through late summer that year, Morgan, Lewis & Bockius lawyer Holston said. The second phase--Kona II--started in late January of 2006, according to some accounts. It came after the publication on Jan. 23 of a CNET News.com story that included details from a January 2006 board retreat at a Marriott resort and spa in Indian Wells, Calif.

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However, HP appears to have been investigating News.com's reporters before their Jan. 23 story appeared. Two News.com reporters have been told by a government investigator that their phone records were accessed the week of Jan. 17, a week before their article was published. In the case of Tom Krazit, the investigator told him that HP went after his phone records on Jan. 20, the day he called HP for comment. Reporter Dawn Kawamoto has been told by the investigator that her records were targeted on Jan. 17, three days before HP had been contacted for comment.

Also, HP's investigators used physical surveillance at a January board meeting, the company's outside lawyer said on Friday. HP did not immediately confirm whether that was the Indian Wells gathering. If it was, it indicates that Kona I may have ended months earlier, but HP's sleuths were nonetheless still on the case.

2: Just whose dumpster was that?
HP has already been soiled over the tactics used in its investigation, but the latest wrinkle was the disclosure that HP's outside investigators may have gone through certain individuals' trash.

Holston said Friday that Morgan, Lewis has evidence that "third party investigators may have conducted a search of individuals' trash" in February 2006. "However, at this time, we do not know who the targets of these efforts were," he said.

HP representatives have declined to say whose bins may have been raided or how many people's cans were overturned.

3: How did Hurd miss the details of the investigation?
Hurd characterized the investigation as one that was well-meaning, but that eventually went astray. "What began as an investigation with the best intentions has ended up turning in a direction we could not have possibly anticipated," he said.

That point is far from settled, however, particularly since Hurd was notified about several key elements of the probe, and regular updates were provided to Dunn and, according to Holston, "to a lesser extent, to (general counsel) Ann Baskins."

Hurd said Friday that he "attended a brief portion of a meeting" that covered the results of the first phase of the leak probe. As for the second phase, he said he got a draft report summarizing the second phase of the company's leak investigation, but did not read it. He also said he attended a March meeting "at which a verbal summary of the second phase of the investigation was provided."

Also, he said he approved the notion and content of a fake e-mail sent to a News.com reporter, but not the tracer technology that could have allowed the company to see who opened the attachment.

4: Who received Fred Adler's warning?
According to The Wall Street Journal, HP security worker Fred Adler sent a warning to others at the company that the pretexting could be illegal. The Journal article does not say who at HP got that e-mail. Neither Hurd nor Holston addressed that matter on Friday.

An HP representative did not immediately provide comment when asked who received Adler's message.

5: Are there more shoes to drop?
Morgan, Lewis has said it has more than 1 million pages of documents, many of which have yet to be reviewed. Hurd has said that there may be more details out there.

"I believe we now have a number of the substantial facts," he said. "Although there may be others, I am confident that we have a good understanding about what has transpired around the investigations."

There are ongoing criminal investigations by both federal and state authorities. And, although reporters did not get to ask questions last Friday, Congress will be able to press HP executives at Thursday's hearing.

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