September 27, 2006 8:00 PM PDT

HP in for hard time at hearing

For companies accused of wrongdoing, Capitol Hill often is little more than a marble-columned woodshed. At Thursday's congressional hearing into the spying campaign launched by Hewlett-Packard, those involved are sure to take some licks.

The hearing before an oversight and investigations subcommittee has as its focus the kind of easily understood issues that Congress likes to fix in its sights, such as spy rings, stolen phone records and surveillance photos.

HP has acknowledged accessing the personal phone records of two employees, members of the company's board and nine journalists, including three from CNET, as it attempted to plug boardroom leaks to the news media.

To flush out the source of the leaks, HP now acknowledges that its investigators went to extremes, tricking phone companies into divulging private records, a legally questionable practice known as "pretexting." The investigators tailed at least one journalist and director, tried to trace e-mails, and masqueraded as a disgruntled employee in an effort to extract information from a reporter.

Trying to explain the boardroom intrigue could make for a very interesting day in Washington.

"HP tried to distance themselves by hiring an information technology expert," said Rep. Cliff Stearns, a Republican member of the oversight and investigations panel, a subset of the House Energy and Commerce Committee. "They still have culpability. A lot of times these companies try to insulate themselves by hiring investigators and tell them, 'I just want the information.' That doesn't remove them from responsibility."

For the past eight months, the committee has heard from investigators who rely on pretexting to obtain and then sell private records. But many believe Congress knows too little about the consumers of such information, says security consultant Rob Douglas, a man who has testified before an Energy and Commerce subcommittee several times.

"The committee knows how the information is stolen," Douglas said. "What is of interest to me is what happens when the white hot focus is placed on the people who put the money in the pipeline to the information thieves."

Subcommittee Chairman Ed Whitfield, a Republican from Kentucky, said he was disappointed by the actions of HP executives and wondered how leaders of "one of the largest technology companies in the world" could approve of a spying campaign.

"Hopefully the (hearing) will be a deterrent to other companies," Whitfield said. "Evidently, there is a lot of corporate spying going on (beyond HP)."

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HP's boardroom drama
Catch up on the complete coverage, including the latest news on HP's controversial effort to root out media leaks.

Certainly, Thursday's testimony is likely to produce interesting moments. This could be the only time that the public gets to hear Patricia Dunn, the former HP board chairman who resigned her position last week at the request of the board, explain under oath her involvement in HP's investigation.

But far more crucial to HP's future is how CEO Mark Hurd will handle questions about how he encouraged the investigation into media leaks but failed to read a report that outlined much of the methods used by investigators.

Will Congress believe Hurd, who has a reputation for attention to detail, when he tells them that the report slipped by him?

Copies of both Hurd's and Dunn's testimony were released Wednesday. Hurd said in the written testimony that he believes HP's probe into leaks went wrong when investigators grew overly zealous.

"It's an age-old story," Hurd said. "The ends came to justify the means. The investigation team became so focused on finding the source of the leaks that they lost sight of the values of the company."

In her testimony, Dunn tried to shift the focus to the dangers posed to HP by leaked information. She also downplayed her role in overseeing the leak hunt.

Rep. Bart Stupak said last week that even if the leak did harm the company, someone should have at least asked about the rights of the journalists and their families. According to documents seen by CNET, two HP employees did raise concerns about the legality of HP investigator's tactics.

"What about a free press?" said Stupak, the subcommittee's ranking Democrat. "To me it looks like HP tried to intimidate the media."

Others scheduled to testify include former HP senior counsel Kevin Hunsaker, who resigned last week, and more than a dozen investigators involved in the leak hunt. HP General Counsel Ann Baskins had been expected to testify, but Thursday morning it was announced that she had resigned from the company and would not appear at the hearing.

The full list of those testifying: In panel 1, Ron DeLia, Security Outsourcing Solutions; Anthony Gentilucci, HP's Global Security Investigations; Cassandra Selvage, Eye in the Sky Investigations. In panel 2, Dunn; Hunsaker; Larry Sonsini, of law firm Wilson Sonsini Goodrich & Rosati; Fred Adler, HP's IT Security Investigations; Joe Depante, Action Research Group; Valerie Preston, In Search Of; Bryan Wagner, of Littleton, Colo.; Charles Kelly, of Villa Rica, Ga.; Darren Brost, of Austin, Texas. Panel 3, Hurd.

CNET's Anne Broache contributed to this report.

See more CNET content tagged:
Mark Hurd, testimony, hiring, Patricia Dunn, pretexting


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Punish them!!
I've had enough of companies who think they can get away with such things. To have the gall to do something like this, it sounds like taken right out of a movie script. One can only hope those responsible may rot in jail. It's good to see that there is still justice left in this country.
Posted by Sentinel (199 comments )
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As always .. back the train up a couple fo feet pls
In order to savor the marketing and spin, the down playing subterfuge and rhetoric, put a real Reality Check on the menu, let us just examine, once again what is being done and said.

Is Hurd really in for a rough time? or is it the school yard tittering at some one getting caught. Too often the objective powers having taken all 'this' in, psychologically, feel a need to re-iterate their position and establish their authority. Much as a teacher would reduce the upbraiding if a 'guilty'/'caught' child had been overly teased. "Indeed we must save our great business leaders and not be too hasty or punitive" - burning in the back of any public group's or committee's subconscious charged with examining this or dispensing justice.

Well Hurd is not a child, should have learned his lessons on how to control a company, and while there may be subjective slants at anything being said about the whole affair, the importance here is too make sure the facts get out to everyone - real business leaders that are making decisions about whether HP can be trusted with providing thier servers?, the average person on the street thinking about a purchase (wondering can hp be trusted not to rootkit spyware in the background on their pc, and is this a reasonable place to work - this should important.

You see we are only hearing about the one thing that HP did get caught at. Are you telling me this was just one little accident? To have taken steps like this HP surely had been ferreting out a lot more on their employees. The after hours snoop through employee belongings, the multitude of cameras and bugs, minute inspection of every little piece of personal information on record are impossibly deniable precursors to paying out big bucks for "investigations".

Deceit and malice aforethought, huberis and meglomaniacal propensities - this affair is not the accidental little mis-step that we will hear played over and over again - this is a vendetta acted out in the only way that HP knows how and the way they have always done things.

A leader, a man of intelligence and compassion, a soul of discretion and forthright clearsightedness are the barest of minimum requirements to be able to call yourself an executive. To captain a ship takes the unwavering, stalwart, true heart that Hurd never possessed, and I doubt, ever even been close to.

So much we have ventured and so little distance we have covered. Instead of the keelhauling, Hurd should have had the intestinal fortitude and courage to accept the mantle of responsibility and asked himself, "Why?". "Why is it that someone would feel the need to take steps to appear to be a little too forthcoming about our stratagies?". In reality, it should read more like, "Why do I want to persecute the people that I feel may have offended me?" As I have eluded to many times, this is just the tip of the iceberg.

Being "one of the largest technology companies in the world" should have very little sway with the exception of ensuring that employees are taken care. The duality means that; not only is corruption, excesses, ludicracy and malice not only more likely a temptation for those in power, but that it is harder to discover and harder to make accountable for. Just because you are big doesn't mean you are good.

Hurd's excuse is that the investigation was "overzealous". That is a very nice way to discount your responsibilities. Again another inconsistency in Hurd's behavior if it were true is that the efforts were not directed by HP.

But HP did not need an investigation, it was directed by Hurd in reality or virtually, and was not only encouraged but escalated.

Yes this will get hot for a few months and then die in some faint hearted legislation and backroom consulatory back patting.

If there is ever any wonder at why the rest of the world glances askance, just heap this on top of all the other typically American, "big business" political successes.

Gosh I feel proud.
Posted by Dragon Forge (96 comments )
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HP!!! You got some 'spainin' to do...
Patricia Dunn indicates that she thought the records were be obtained legally... Oh that is such a stretch (I'm trying not to curse).
How did she think the records of people external to the company were going to be obtained legally?
Did she think that her investigators and/or legal counsel went to these people and obtained written consent..c'mon.
HP's legal counsel went along with this and even let it slide although with doubts. If they had doubts then WHY oh God WHY did they approve it?
They should not only be fired but be put in front of the Bar for suspension.
Now for the rest of the Board of Directors' involvement, why isn't anybody concerned that only one member of the board took this to the public? Where were their ethics? They should indicted as coconspiators since they just sat on their thumbs while this whole thing unfolded.
They are responsible to the shareholders for whom this could cost dearly, in company reputation, legal costs (which HP is picking up fully) and the almost full-time distraction of the company CEO.
Speaking of CEO, Mark you said that you didn't read the completed investigation report so you were "unaware". So then are we to take it then that this is the norm for your office to just not keep up with the internal workings of the company and specifically the Board of Directors, the very board that put you in the chair you sit in today? BUNK!
I hope the hearings today go well for you since I think they are going to open the eyes of many americans both about "The HP Way" and the privacy of americans which by any standard is an oxymoron.
Posted by fred dunn (793 comments )
Reply Link Flag
Poor HP
1) They can't compete in the marketplace with Dell on price.

2) They can't compete with IBM/Lenovo on quality.

3) They can't compete with Alienware (Dell) on "Gee Whiz".

4) They can't compete with the NSA / FBI / CIA in depriving Americans of their privacy.

5) The Gambino Crime Family runs a better beoardroom.
Posted by Too Old For IT (351 comments )
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