September 8, 2006 1:08 PM PDT

HP chairman: Use of pretexting 'embarrassing'

The "pretexting" technique used in a Hewlett-Packard investigation of board members and reporters has been an embarrassment for the company, Chairman Patricia Dunn said Friday.

"I am not happy that the way this investigation has been conducted has led to this major embarrassment," Dunn said in an interview with CNET News.com. Asked if she believed pretexting is illegal, Dunn replied, "I have no idea, but it's wrong."

Dunn has been at the center of a controversy involving the ordinarily secret activities of HP's boardroom. After leaks to the press beginning in 2005, Dunn ordered an investigation of board members that led one to resign and another not to be renominated.

special coverage
HP's boardroom drama
Investigation into media leaks used controversial data-gathering method, SEC filing confirms.

In pretexting, one person masquerades as another to obtain private information such as phone records. HP said in a U.S. Securities and Exchange Commission filing that it hired an investigation company to try to track down board leaks to the media. The company in turn hired a contractor that used pretexting to scrutinize board members, HP said. The technology giant acknowledged on Thursday that the phone records of nine reporters, including two from News.com, were also accessed.

Dunn has no plans to resign, she said. "If the board wants me to resign, I will absolutely accept their judgment on this," Dunn said. "I have full confidence that if they ask me to, it'll be the right thing to do for shareholders."

The board will have an opportunity to discuss the investigation and its consequences on Sunday. The directors scheduled a meeting by telephone conference call, HP spokesman Ryan Donovan said. Such phone meetings are scheduled "from time to time...on other issues that come up," he said.

And HP has taken measures to ensure that pretexting won't be a problem for it again. "Pretexting will no longer be permitted as a part of any HP investigation," Dunn said.

HP has refused to disclose which company it hired for the investigation, and Dunn also wasn't forthcoming. "I don't know what the name of the firm is," she said. "I worked through HP resources to get the outside firm," which HP also used in the past, she added.

But Dunn was closely involved in the investigation, according to Tom Perkins, the board member who resigned. According to a June 20 e-mail posted on The Wall Street Journal Web site, Perkins told HP's outside legal counsel, Larry Sonsini, "Larry, the investigation was a Pattie Dunn program, 100 percent conceived of and managed by her, and unknown to the board, except perhaps in the most vague and imprecise terms, with the possible exception of Mark, who she may have briefed."

Dunn also didn't know if investigators had used pretexting to examine HP employee records, she said. She said she learned of the use of pretexting to access journalists' phone records on Wednesday.

The probe included accessing phone records of two CNET News.com reporters, Dawn Kawamoto and Tom Krazit, according to the California attorney general's office. The two co-wrote a Jan. 23 story about a private, long-term strategy session held by HP's board of directors. The Wall Street Journal reporters Pui-Wing Tam and George Anders and The New York Times reporter John Markoff also were targeted using pretexting, those publications said.

Dunn personally apologized to the CNET News.com reporters Friday. "The information that has recently come to light about the involvement of reporters and the way they're involved in this investigation is highly regrettable, and I want to apologize individually on behalf of this board," she said. "Nobody had that in mind when this investigation was undertaken."

Indeed, she said, the investigation should have been conducted according to HP's standards.

"That investigation was authorized on the basis that everything done would be not only legal but fully compliant with HP's high standards for both ethics and business practices," she said. "I received assurances about that at every step of the way."

Dunn also went on the offensive in the interview, lashing out more than once at those whose leaks led to the investigation.

"This is a board who has suffered for a long period of time from egregious breaches of standards of business conduct. The board asked me to do something about it," she said. "Many directors thought the top priority was to figure out how to plug the leaks. We couldn't function as a board with these leaks continuing. This was not my spying on the board."

The leaking also has hurt HP's image, she said.

"HP's reputation has been damaged by a leaker who refused to come forward knowing this investigation was going on," she said, a person who "lied to the rest of the board, by omission and commission, about the fact that he was the source of this information for a long period of time."

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40 comments

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First fire her, then throw her in jail. Sleaze!
<eom>
Posted by anarchyreigns (299 comments )
Reply Link Flag
Culture of spying
HP's actions are a reflection of the culture that seems to prevail these days. People in govt and powerful postions feel they can do whatever they want, spy on whoever they feel like, circumventing the law at will, because they feel what they're doing is ideologically right.

Shame on HP for trampling on the constitution, personal privacy and breaking the law.
They should be investigated by the SEC and someone should go to jail.


PS : Its no surprise that HP is a major contributor to the Republican cause (as per Rush Limbaugh)
<a class="jive-link-external" href="http://www.rushlimbaughonline.com/articles/boycottcompanies.htm" target="_newWindow">http://www.rushlimbaughonline.com/articles/boycottcompanies.htm</a>
Posted by barlie (4 comments )
Link Flag
Sleezier than a Danielle Steel Novel
You're right, Patricia Dunn's basically turned into the NSA of the corporate world <a class="jive-link-external" href="http://www.iwantmyess.com/?p=95" target="_newWindow">http://www.iwantmyess.com/?p=95</a>

It's an abuse of power and information that reads more salacious than a Danielle Steel novel. Former HP board member in a NY Times Interview had even said Dunn's spying was "probable unlawful conduct, improper board practices, breakdowns in corporate governance."
Posted by marileev (292 comments )
Link Flag
She should resign
If you order an investigative company to quietly find out who has made PAST phone calls without going through public, legal channels (i.e. subpeona phone records, etc.), you know damn well that they are going to have to resort to unethical or illegal tactics to get that data.

I'm not buying the "we had no idea because we hired a company who outsourced to contractors" excuse. Common sense dictates that this operation was fishy by definition and by instruction.

HP, of all companies, can't have a corporate officer (and chief legal counsel, for that matter) who condone spying on other board memebers and private citizens. It's an afront to the "secure" IT services HP is in the business of selling to others.

She should resign.

-Mister Winky
Posted by Mister Winky (301 comments )
Reply Link Flag
sure she can...
pretend it's a "terrorist" thing...then you can do what you want....ask GWB...he does it!!!!


if she had any ethical values...she should offer her resignation...
Posted by oceanview_1 (14 comments )
Link Flag
"I'm shocked gambling is going on in here ..."
I find it humorous that the person that initiated the investigation is
shocked about the methods employed. This whole thing smells of
one big Cat Fight where personalities versus common sense
prevailed. I can't wait to see how Hurd handles this ... Hopefully,
it's an opportunity for management to reclaim control from the
board over the company. This board has run amuck.
Posted by mossvine (3 comments )
Reply Link Flag
Removal or Resignation
The acts conducted by the investigative company at the direction of Patricia Dunn have caused unprecedented embarrassment to the company and its ethical business practices. Ultimate, she initiated the investigation and should be accountable for all actions taken under said investigation.

I feel bad for the employees of HP and their new super-star CEO, Mark Hurd, who have been working so hard to rekindle the success of HP.

This board has always been volatile with arguments with the Hewlett family members over the Compaq acquisition to the most current debacle. I think it just may need a clean sweep..so shareholders call for a vote!

Removal or resignation are the appropriate action for Dunn.
Posted by webonics (13 comments )
Reply Link Flag
Dunn Resignation
The board should be sensitive to all the bad press and privacy violations for a NYSE traded company <a class="jive-link-external" href="http://www.iwantmyess.com/?p=95" target="_newWindow">http://www.iwantmyess.com/?p=95</a>

Might be time to cut bad ties with Dunn.
Posted by marileev (292 comments )
Link Flag
Sack, humiliate, and procecute the incompetent bimbo
It's appalling that she still has a job at all. If I were involved in HP, I would destroy her now.

HP MUST sack her immediately and eat massive crow by issuing a press release with an effusive apology for "Profoundly Unacceptable Behavior by Former Chairwoman who has been Terminated" -- then state emphatically that it will cooperate fully with any any and all civil or criminal investigations.

I for one will touch no HP product unless and until I see some satisfaction.
Posted by MikeDson (50 comments )
Reply Link Flag
HP is a great company...with a bad apple
HP is a great company and should not be punished for the bad apple's actions.

The simple and clean solution is to remove her in disgrace and cooperate with any possible criminal investigations.
Posted by Stan Johnson (322 comments )
Reply Link Flag
HP's privacy advice
HP might just want to pull it's privacy advice <a class="jive-link-external" href="http://h20239.www2.hp.com/TechCenter/Security/Protect_PC.htm" target="_newWindow">http://h20239.www2.hp.com/TechCenter/Security/Protect_PC.htm</a> until they toss that bad apple
Posted by marileev (292 comments )
Link Flag
Tom Perkins is laughing his sails off right now
Can you imagine the satisfaction that Perkins has right now?
Sipping champagne on his 270 ft yatch as Dunn is baked in the
slow rotisserie of American investigative journalism. The sweet
taste of revenge.
Posted by mossvine (3 comments )
Reply Link Flag
I'm with everyone else
The buck stops with you, Ms. Dunn. Get out. You wouldn't accept ignorance as an excuse from anyone who works there. Why should we accept it from you?

Carly Fiorina was bad enough, and this is worse. I have 3 HP products in my house which are becoming hard to look at. Maybe I'll tape a Xerox label over them just for fun.
Posted by giggles (46 comments )
Reply Link Flag
spying culture
HP's actions are a reflection of the culture that seems to prevail these days. People in govt and powerful postions feel they can do whatever they want, spy on whoever they feel like, circumventing the law at will, because they feel what they're doing is ideologically right.

Shame on HP for trampling on the constitution, personal privacy and breaking the law.
They should be investigated by the SEC and someone should go to jail.


PS : Its no surprise that HP is a major contributor to the Republican cause (as per Rush Limbaugh)
<a class="jive-link-external" href="http://www.rushlimbaughonline.com/articles/boycottcompanies.htm" target="_newWindow">http://www.rushlimbaughonline.com/articles/boycottcompanies.htm</a>
Posted by barlie (4 comments )
Reply Link Flag
Er, no...
*** Shame on HP for trampling on the constitution, personal privacy and breaking the law. ***

It's a non-sequiter to accuse a private non-government entity of trampling on the constitution. If you read the thing you'll note that it says what says what government can and can't do, and never says a word about what private entitities can't do. Common mistake. Only the government can "trample on the constitution" -- people and companies are limited by laws, not by the constitution.

And since the 8th amendment appplies to the government and not to me, if anyone from HP tries to get sensitive information on me, I'll hunt them down and exercise cruel and unusual punishment on 'em.
Posted by MikeDson (50 comments )
Link Flag
Tip of the iceberg
I hate to say this, but...this kind of thing is really just the tip of the iceberg. It is common practice in corporate circles to hire private investigators with less-than-ethical tactics for whatever purpose they deem necessary. It is a sad statement about the character of people that we consider to be leaders in our communities that they have little or no moral compunction in breaking the law or violating the privacy of others.
Posted by bms94550 (1 comment )
Reply Link Flag
less-than-ethical ?
Private investigators with less-than-ethical tactics? Give me a break, what kind of ethical tactics can they possibly use to get the investigation done? So, what does it mean "less than ethical"? There is none, not less.
Posted by cshsieh (9 comments )
Link Flag
Do you hear that Patricia?
It's the sound of 20 years of loyalty to HP that you just flushed
down the toilet.

Look out Epson, I am going to be buying some printers....
Posted by MTGrizzly (353 comments )
Reply Link Flag
Interesting conundrum
Interesting conundrum, the leaker gets off, Tom Perkins is lauded as a hero to all, and the madam chairperson, who used the very questionable illicit investigative means gets the roasting!

Still, she has yet to explain the why, as to the filing the statement to the SEC omitting the basic facts as to Tom Perkins resignation in May, and restricting CEO's general statement to both the staff at HP and the press.

Further, has yet to explain when given ample opportunity, to correct the basic errors as well including the boardroom minutes to that fateful meeting !

Remember , that she of her own freewill and volition , chose to operate in that arbitrary manner as well!

Let the roasting continue unabated, as she deserves it , though she leaves so many unanswered questions?, at this point in time, as well!

Her options, now appear to be shrinking by the hour, as the scandal continues along it's merry way!

Oh well, time will tell all shortly!
Posted by heystoopid (691 comments )
Reply Link Flag
corporate ethics and media ethics
So everyone is ready to fry Ms Dunn !!! What happened to that board member who leaked the information to news.com ?, i am sure that was not ethical ...and of course news.com would have not commented 'Why as a board member you are leaking this information ?'
The point is, what Ms Dunn has done is wrong, but also wrong is the 'leaker' and also that reporter who accepted the leak .... if this entire situation is to be treated with true ethics. Ofcourse it is debatable that, what is true ethics.
Posted by marap (43 comments )
Reply Link Flag
A reporter accepting a "leak" is NOT unethical
This is the nature of the press. People very frequently will tell the press something and want their name kept out of it. Judith Miller of the NYT went to jail to keep the confidentiality of a source.

The most famous type of this would be "Watergate" and its leak "Deep Throat." Or the current "BALCO" grand jury investigation. There are countless reasons why an informant wants their name kept out of it; privacy and fear of retaliation for example.
Posted by giggles (46 comments )
Link Flag
rid them both
yeah she should pay..but so should that frickin leaker, he shouldn't get off because she did something stupid. A dishonest director is a cancer to a company. Let the two of them hold hands as they are escorted out of corporate america for good!!!
Posted by df561 (94 comments )
Reply Link Flag
What other methods of "Torture" are excluded?
Are companies now going to have to make an itemized list of
surveilance methods that can't be used??
Posted by technewsjunkie (1265 comments )
Reply Link Flag
Not just done by investigators
I have been subjected to "pretexting" by credit collectors, calling on the phone attempting to get me to believe they know some one who used me as a reference. They have tried to get me to divulge any information they can about others by making be think they are a friend of so and so. I exercise caution over the phone, just as I do over the internet. I think it would be a difficult thing to prove should a law against it be passed, either on a local, state or national level. Many of these investigators are pretty sly and those subjects can be quite gullible. Inuendo and insinuation are powerful tools used to gain information and some people are more than willing to divulge private info thinking they may be helping.
Posted by mjd420nova (91 comments )
Reply Link Flag
Direction From The Top
We all take direction from the boss above us. As their top boss spies, HP must have a cluture of spying.
Posted by Bill97 (3 comments )
Reply Link Flag
Direction From The Top
We all take direction from the boss above us. As their top boss spies, HP must have a cluture of spying.
Posted by Bill97 (3 comments )
Reply Link Flag
Direction From The Top
We all take direction from the boss above us. As their top boss spies, HP must have a cluture of spying.
Posted by Bill97 (3 comments )
Reply Link Flag
Give me a break
This kind of thing happens all the time and it will keep
happening regardless. The only difference is someone got
caught, it's no different than your HR manager listening to
employees gossip at the water cooler. Or your manager
pretending to be your best buddy (getting you drunk at the bar)
than selling you out down the road. I'm surprised that no one
noticed that the guy who leaked the information wasn't some
middle manager but someone at the top which goes to show you
that attempts to "buy" loyality just doesn't work anymore, I'm
mean it's not bad enough you pay these guys big bucks to run
the place heaven forbid you expect them to keep their mouths
shut and not ruin the game plan. Maybe they should add
punishable by death to the termination clause perhaps that'll
shut people up.
Posted by brian.lee (548 comments )
Reply Link Flag
Partially right
There is nothing illegal about a "HR manager listening to employees gossip at the water cooler. Or your manager pretending to be your best buddy (getting you drunk at the bar) than selling you out down the road." Its unethical in general (depending on who you are it might not be personally), but not illegal. Obtaining someone's phone records without a court order is illegeal and unethical. What George Keyworth did was unethical, but not illegal. Should HP fire him? Maybe. It depends on what his worth is to the company seeing that he will not longer be on the board. Its true executives are paid lots of money to run a company, and should be able to keep strategies to themselves. However, they also should be able to obey the law as well.
Posted by VI Joker (231 comments )
Link Flag
Board has no choice but to fire Dunn
At this point in time, the Board has no choice but to fire Dunn.

Keeping her would send a strong signal that HP condones Dunn's actions. And that would be a very bad signal to send.

Furthermore, HP's board should call on Mr Perkins to not only return, but assume chairmanship of the Board. Having someone with such strong ethical principles would send the right signal.

A board member who resigns because of principles is the right definition of "corporate governance". It means someone who will not tolerate unethical behaviour so he can leep the perks of a board membership.
Posted by jfmezei (24 comments )
Reply Link Flag
Does pretexting software come preinstalled on my HP computer?
There is no Question Dunn must resign or be removed. There is little doubt that criminal laws were broken, and someone is going to be indicted. The Ken Lay defense of I didnt know they were doing that has already been rejected by the courts. I see no reason why Dunn should not be charged.
Posted by Gninnaf (4 comments )
Reply Link Flag
Would make good Bush successor
This level of sleaze is all too common at the top levels of our businesses. I can remember when HP was a very well respected company, and I bought their instrumentation products without question. Now their products are not reliable and their management is sleazy.
Posted by kchenderson (3 comments )
Reply Link Flag
hp?
Look, the board nor the shareholders need to vote as to what to do with Dunn. Ultimately it is the enduser, and the little resellers that have made this company. In my opinion if HP products were just not bought or sold, then there would be no mess of this nature. And since I'm both an enduser and a reseller, I've already voted!
Posted by picketech (2 comments )
Reply Link Flag
Pretext or impersonate?
Pretexting is just pretending to be someone you're not and that's unacceptable.I don't know what ignoramus came up with the word pretext, but I'm sure it was sell an palatable idea to people.
Posted by bdboyce (5 comments )
Reply Link Flag
Or... Fraud!
Oh, no. Pretending to be someone I'm not in order to obtain privileged information I'm not entitled to? That's not fraud! Why that would be illegal! I'm just "pretexting." [Sarcasm Alert!]
Posted by lshurr (2 comments )
Link Flag
 

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