September 13, 2006 5:05 PM PDT

HP leak probe extended to employees

Hewlett-Packard's probe into news media leaks extended to the company's own employee ranks, the company's chairman said this week.

In a videotaped message to employees, Chairman Patricia Dunn said the same techniques that were used to obtain details about HP directors and journalists were also used on two employees.

"These techniques were practiced on a number of individuals including certain directors, two employees and a number of individuals outside the company, including journalists," Dunn said in a message on Tuesday, a transcript of which was provided by the company. An HP representative confirmed that two current employees had their personal records targeted, but would not identify the employees or say which records were accessed.

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HP has come under fire for launching an investigation that employed the practice of "pretexting," or obtaining personal information under false pretenses. The company has said that phone records of nine journalists were targeted, as well as those of board members. Among those targeted were three CNET News.com reporters, and the records of one reporter's father were also included.

California's Attorney General Bill Lockyer said in a television interview on Tuesday that his office believes it has enough information to bring charges against people both inside and outside the company. Charges could come within a week, according to a spokesman for Lockyer, although there is no set timetable.

"They could come in a week; they could not come in a week," Lockyer spokesman Tom Dresslar told CNET News.com. "We are not confining ourselves to any specific timeline. We'll go when we are ready to go."

The FBI and the U.S. Attorney's Office in San Francisco are also investigating, while a House committee has asked HP to turn over records. HP has said it is cooperating with all three investigations.

On Tuesday, HP said that Dunn would step down as chairman in January and turned over that job to CEO Mark Hurd. Dunn will remain a director. Director George Keyworth resigned from the board on Tuesday. Keyworth said in an HP press release that he was the source of a January CNET News.com story that had been at the center of the leak probe, but Keyworth also lashed out at the investigation.

"The invasion of my privacy and that of others was ill-conceived and inconsistent with HP's values," he said.

In her message to HP employees, Dunn apologized for the tactics used in the probe. Details of Dunn's message were noted earlier by the Financial Times.

"If there was any way I could course-correct some aspects of the investigation, I would," Dunn said. "I wish this had never happened. I apologize personally, deeply and sincerely to everyone affected in any way, either within HP or outside of the company."

In the message to employees, Hurd noted that the company has "completed a thorough investigation."

Hurd said that HP has taken action on recommendations made by its outside counsel, Wilson Sonsini Goodrich & Rosati. Among the actions HP has taken, Hurd said HP is "engaging an external firm so that in the future, our investigative methods and processes are handled in a manner that not only complies with the law but also will be aligned to Hewlett-Packard's Standards of Business Conduct." An HP representative declined to say what type of firm HP had hired, or to name the company.

HP has also retained another outside law firm to meet with federal prosecutors. HP reportedly has tapped Morgan, Lewis & Bockius to represent the company in its dealings with federal prosecutors, according to the legal periodical The Recorder. According to The Recorder, the two sides met on Monday, with HP making a "proffer," that is an offer to talk about certain matters under certain conditions. An HP representative declined to comment on that report as well.

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7 comments

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Boycott in effect
This is unbelievable. So she steps down as chairman (in Jan. no less, should be immediately) but still remains on the board? What punishment is this? They just don't get how serious of a crime this is. And until they do I will no longer purchase HP products or recommend them to anyone.
Posted by ballssalty (219 comments )
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Employees should file civil suits...
This conspiracy is like an onion it is getting peeled off on layer at a time.
What new revelations are awaiting us?

Stockholders, now is the time to start closely watching your HP stock values.
Posted by fred dunn (793 comments )
Reply Link Flag
Business discourages honesty
Its an interesting situation, isn't it?

You've got the top Republicans saying that every American needs to invest in the stock market to ensure a survivable retirement, and you've got companies doing away with pension plans in favor of plans where you invest in the stock market, often with heavy commitments to that company's stock.

Yet more and more executives and government leaders are being shown to be morally and ethically handicapped.

In your personal situation, you catch your company doing something highly illegal. You begin communicating with a hopefully honest agency within the federal government about your company's illegal activities.

"Somehow" word leaks out. Your company goes after you using illegal methods.

Subsequently, perhaps as a result of your attempting to halt an illegal invasion of privacy, all the dirty details become public knowledge.

Some of the responsible company board or management personnel get a slap on the wrist; worst case, they leave with one of those ever more golden parachutes.

Your potential for advancement within that company is effectively ended, and because of the news that your company doesn't know the meaning of ethics or morality, the stocks which your company invested your retirement in tank.

Now, you're stuck...can't get a pay raise, and your retirement is shot in the nether regions.

And to think Bush wants Social Security to go away in favor of the stock market...
Posted by missingamerica (6147 comments )
Reply Link Flag
King George doesn't need Social Security...
Beside the FAT presidential pension with Secret service and housing paid for he had a fat daddy to start with. So people who wanted to get to his daddy made sweet deals with him.
King George has a distorted field of view (either that or all of that alcohol has dain bramaged him) about economics.
His economic plan is to reduce the tax burden for the wealthiest 5% of americans, give the rest of Americans a one-time refund so they won't complain too loud, spend like there's no tomorrow.
We have all used him use the word "War" when he is talking about Afghanistan and Iraq but yet he still hasn't gone to Congress to propose a long term war budget. Why, because since it's a war against terrorism we aren't really fighting a war, get it? So the funds come out of the emergency funds.
Today marks the passing of a great Lady "Ann Richards" whose quote at the Democratic Convention of '88 about Bush Sr. certainly applies more to 'W':
"Poor George, he can't help it. He was born with a silver foot in his mouth".
I'll sure miss Ann.
Posted by fred dunn (793 comments )
Link Flag
Why no anger at the Phone Company?
Everyone is jumping up and down in anger at the HP Board and the private investigators, but I don't see anyone expressing anger at the Phone Company. Who would have belived that you could call the the Phone Company and say:
"Hi, my name is Joe Bigshot and my phone number is 555-1211. I've misplaced my phone bill; could you please send me a new copy with calls itemized? By the way please send it to me at Shade Tree Investigations, 123 Spys-Are-Us Avenue, New York, NY. Thank You"

I think that the reporters and others should be screaming at the Phone Company for releasing their records so easily.
Posted by gtalbott (9 comments )
Reply Link Flag
HP - Crime and Punishment?
Most of the comments were on the mark except for the one about "King George doesn't need Social Security..." How about if we stay on topic and not let personal partisan views interject inappropriately. I myself could say a few choice things about Bill, Hillary, Harry, Teddy, Howard, John, Diane, etc. etc. the list could be endless, but no one has asked me to share my personal vitriol so I won't. So, what was the subject, oh yeah, Hewlett Packard. Why would anyone be surprised. This was purely a political move meant to make the totally stupid among us think that lawbreakers in the boardrooms get punished. Normally, if you do get canned, you walk away with millions of the companies money. I just wonder how much Dunn received for quietly falling on the sword and taking a small step back. By now most of you must have come to the realization that there are different types of justice served out in this country depending on if you're a powerful politician, wealthy, an athlete, entertainer or a commoner. On the other hand, maybe I'm just cynical. So let's not waste any more time on this, let's just move on as almost nobody gives a damn or is going to change anything. Just my personal view!
Posted by ctcua1997 (1 comment )
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The hypocracy of dogooder commentaters
As a person whos retirement income depends on stocks and the privacy of board meetings for my income, I'm happy to praise Dunns efforts at getting the slimeball (motives unknown) who is spying on HP board meetings. Who thinks Keyworth is not deserving of a few years in prison and in depth investigation for other criminal, anti stockholder activities. Hypocrits.

Martin Jackson
Vancouver, BC
Posted by (1 comment )
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