September 28, 2006 6:50 AM PDT

HP's top lawyer leaves, won't testify

Hewlett-Packard General Counsel Ann Baskins has resigned, the company announced Thursday.

Baskins, as advised by her lawyers, also declined to testify before a U.S. House of Representatives subcommittee that met on Thursday to investigate an HP probe into leaks to the media. Baskins invoked her constitutional protection under the Fifth Amendment, which gives someone facing criminal prosecution the right to remain silent. A number of other former HP employees and contractors also refused to testify.

Ann Baskins Ann Baskins

Baskins, who spent much of her legal career with the company, also served as secretary for its board of directors. She has come under scrutiny for her role in HP's leak investigation, which allegedly involved "pretexting," or using fraudulent means to obtain someone else's personal records.

"She has admirably supported our business needs across the globe and will be missed," CEO Mark Hurd said Thursday in a statement regarding Baskins. "Stepping down was a very hard decision for her, but by doing so, she has put the interests of HP above her own, and that is to be commended."

As part of an agreement with the HP board, Baskins retains the right to exercise outstanding options (with a value of $3,658,807, vested on Sept. 28) to purchase 465,858 HP shares, according an HP filing with the U.S. Securities and Exchange Commission on Thursday.

Additionally, Baskins will be able to exercise other, yet unvested, stock options by Nov. 22. The vesting of these options will be accelerated and they will have a value of $1 million, according to the regulatory filing. Baskins will also retain the balance of her 401(k) plan, as well as her vested rights under qualified HP retirement plans and under an HP excess benefit plan.

Former HP Chairman Patricia Dunn, who is at the center of the HP board room scandal, in testimony on Capitol Hill Thursday declined to say whether Baskins' compensation was proper. "She was a 26-year employee of HP," Dunn said. "She bled HP blue ink. I'm sorry to say her career is ruined. She made some errors in judgment."

HP has acknowledged that it accessed phone records of board members and journalists, including three CNET News.com reporters, as part of its leak probe. The company has also followed reporters and tried to trace e-mails in an effort to track down the source of leaks from the board of directors.

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The scandal has already cost the jobs of Chairman Patricia Dunn and two other employees.

Baskins has hired two well-known attorneys, K. Lee Blalack of O'Melveny & Myers and Cristina Arguedas of Arguedas, Cassman & Headley.

Blalack represented Enron's former chief executive before House and Senate investigations of the company's bankruptcy and was a former chief counsel to a Senate investigations subcommittee. Arguedas, who specializes in criminal defense, has been named by California Lawyer Magazine as the attorney other attorneys would hire if they got arrested.

The letter written on behalf of Baskins said that if their client could testify, "the subcommittee would recognize that she acted legally and ethically at all times...given the current environment, however, Ms. Baskins simply has no choice" but to remain silent.

Both the California attorney general and the U.S. Attorney's Office in San Francisco have said they are conducting criminal investigations into HP's use of pretexting, though no charges have been filed.

CNET News.com's Declan McCullagh, Anne Broache, Joris Evers and Ina Fried contributed to this report.

See more CNET content tagged:
Patricia Dunn, scandal, attorney, lawyer, pretexting

7 comments

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If this resignation is due to complicity
or, worse. This attorney would be first in line to make the Bar
complaint.

IF an attorney conspired to violate the law, and then took a
single step in furterance thereof... then the elements of civil
and/or criminal conspiracy are met.

Women are still far from properly represented at the top of the
legal profession. Let's hope this is merely the effort of one of
the best to distance herself from the scandal.
Posted by grolaw (7 comments )
Reply Link Flag
HP scandal
It would be intresting to find out who is paying for HP ex-top lawyers, legal council; and, what kind of a financial package she left with
Posted by bllual (1 comment )
Link Flag
Re: If this resignation is due to complicity
Well, I don't know if she's part of it or not, but I will say I don't like what Dunn said about her "carreer being ruined". I think people deserve second, and sometimes third chances, but if HP overall acted in bad faith, they do need to get nailed for it and suffer enough consequences that they'll think twice before doing it again.

Even if she did have some involvement and knew what was being done, it doesn't mean she should never work again the rest of her life, or be shunned by human kind.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Link Flag
Irony
It is ironic that HP is probably one of the more ethical of the large US Corporations. If the Good are this bad how terrible are the Bad?
Posted by Brockleybadger (10 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.

Poor HP!
Posted by Too Old For IT (351 comments )
Link Flag
Court room drama
Since they have the lawyers that represented Enron's CEO, can't HP also add the law firm who represented WorldCom's CEO? Then the American public could have another courtroom drama. Maybe they will televise it?
Posted by mzemina (7 comments )
Reply Link Flag
Another "Fifth" , and a round for my friends
This should be the standard answer for all of those involved in designing, contracting, and approving of this conspiracy.
There are many people at fault here from the PI and hackers all the way to Mark Hurd.
To all of you major shareholders and stock analysts that in the beginning of "Patricia-Gate" that said "I don't care, HP is still going to hold it's value" boy are you in for a surprise.
When this is fully investigated are you naive enough to think if they were capable launching this that they have no other "skeletons in the closet"? This is just the one they got caught at.
Why do you think HP's top Legal Counsel is distancing herself from the company and invoking her fifth amendment rights? Because of this? Please!

So all you HP yea-sayers hold on to that stock...I dare you. Unless you manage a mutual fund then you probably don't give a damn anyway, it's not your money.
Posted by fred dunn (793 comments )
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