September 28, 2006 1:37 PM PDT

Hurd: HP's founders would be appalled

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Hewlett-Packard CEO Mark Hurd testified Thursday that he wishes he had asked more questions about a leak investigation that has become a national scandal.

"I wish I had asked more questions," Hurd said in his opening statement before being questioned by a subcommittee of the House Energy and Commerce Committee. "There are signs I wish I had caught."

In addition to the congressional hearing, which has stretched for more than six hours, there are federal and state criminal probes, as well as a Securities and Exchange Commission investigation over how HP conducted and disclosed its probe into unauthorized leaks to the press. HP has admitted targeting the phone records of more than a dozen people, including current and former board members, nine journalists, two employees and an unspecified number of others.

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Hurd repeated an earlier apology to the victims and to HP's employees.

"If Bill Hewlett and Dave Packard were alive today, they'd be appalled. They'd be embarrassed," he said.

Asked about a key report that detailed the methods used in the leak probe, Hurd again said that he had not read it. "Not my finest hour, Mr. Chairman," he said.

"I am accountable for everything that's sent to me" Hurd said, acknowledging he should have read it. "I pick my spots where I dive for details."

Under questioning, Hurd said he didn't know about the pretexting of phone records, the digging through trash or the monitoring of reporters and board members. He said he did know about a fake e-mail tip to a reporter.

Mark Hurd Mark Hurd

At the time, he said he thought that method appropriate. "It was appropriate to find the leak," Hurd said, but added he would not approve similar techniques now. "With the benefit of hindsight, I wouldn't do them again."

Hurd said that he does not recall approving or being told of the tracer technology that was included in the e-mail. Rather, he said, his understanding was that the e-mail, sent to CNET News.com reporter Dawn Kawamoto, was designed to make the source call into the company to verify the information.

"The objective was to get whoever it was that was leaking the information to call back into the company to verify that the information was accurate," Hurd said. "I think that's what the team's objective was."

Hurd was also asked about HP's other use of tracers, given that security worker Fred Adler testified earlier Thursday that he has seen them used a dozen or two dozen times in his more than three years at the company. Hurd said he didn't know of any use of tracers to track business rivals.

"I have no evidence of that," he said. "I have no knowledge of us using it against a competitor or in any improper way."

Hurd said he did not have a comment on whether he thought Dunn's assertion was reasonable that she thought phone records were public documents.

But, asked whether that would be appropriate, he said: "I would not want somebody, without my permission, to have my cell phone bill," he said.

Rep. Ed Whitfield, the chair of the subcommittee holding Thursday's hearings, concluded the hearing by praising security worker Vince Nye, who was one of the few HP employees to question the company's investigative techniques. In a Feb. 7 e-mail, first reported by News.com, Nye said he had "serious reservations" about what the company was doing.

Nye said that his understanding of the methods HP was using to obtain telephone records using false pretenses "leaves me with the opinion that it is very unethical at the least, and probably illegal," he said in the e-mail, which was sent to former HP ethics chief Kevin Hunsaker and former security manager Anthony Gentilucci. Both of those men have left HP and were among a host of people who refused to answer questions in the early part of Thursday's hearing.

"If it is not illegal, then it is leaving HP in a position of (sic) that could damage our reputation or worse," Nye said in the e-mail. "I am requesting that we cease this phone number gathering method immediately and discount any of its information."

Whitfield joked: "I think that's an employee at Hewlett-Packard that needs some sort of recognition, maybe get the day off or something."

Following his testimony, Hurd bolted down a side hallway and did not respond to questions.

Click here for a PDF transcript of Hurd's opening remarks.

CNET News.com's Greg Sandoval and Anne Broache contributed to this report from Washington, D.C.

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Mark Hurd, reporter, founder, HP, CEO

5 comments

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Hurd'll Keep His Job
HP CEO Mark Hurd will come away from HPGate with his job in tact. He's doing a good job of acknowledging his role in the scandal, while being non-committal.

I'm sure HP's Board and shareholders are happy with statements like: "I am accountable for everything that's sent to me, I pick my spots where I dive for details."

Now that he's got Patricia Dunn's job as HP Chair I'm sure the board'll drive him and whoever's named HP's new Chief Ethics Officer to abide by HPs' policies &#38; values <a class="jive-link-external" href="http://www.iwantmyess.com/?p=104" target="_newWindow">http://www.iwantmyess.com/?p=104</a>

There are better ways to keep a competitive edge <a class="jive-link-external" href="http://www.essentialsecurity.com/news.htm?id=43" target="_newWindow">http://www.essentialsecurity.com/news.htm?id=43</a>
Posted by marileev (292 comments )
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Where's the Leadership?
Since when is "I was too occupied digging in the weeds in other places to bother" a valid excuse for the CEO of a company to be held personally responsible for malfeascance? Maybe if he were the COO. But certainly not as CEO. This is the difference between being a manager and a leader!

This sorry saga demonstrates that HP's issues are deeper than operational improvements (i.e. layoffs, cost cutting, salesforce reorg, etc.) can address.

Hurd has proven adept at cutting costs and squeezing employees into delivering for the quarter. Both at NCR and HP he is unproven as a positive moral and ethical force. Whether his actions (or the actions of people in his employ) violate the law or not, the CEO should be held personally responsible for failing to set the right moral example for the company.

His performance to date should have no bearing as to whether he remains CEO or not. Leaders accept personal responsibility (and the fallout that comes with it). Hurd should resign.
Posted by dogofwar26 (1 comment )
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HP's founders would be appalled
That's probably true, but they'd also be appalled at the protection given to reporters who were probably guilty of eliciting leaks from HP employees. That's the real story here - reporters who practice insider crime themselves by attempting to bribe or coerce corporate employees into leaking information. Why isn't anyone digging deeper in THIS end of the story??
Posted by engineer's wife (2 comments )
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HP's founders would be appalled
That's probably true, but they'd also be appalled at the protection given to reporters who were probably guilty of eliciting leaks from HP employees. That's the real story here - reporters who practice insider crime themselves by attempting to bribe or coerce corporate employees into leaking information. Why isn't anyone digging deeper in THIS end of the story??
Posted by engineer's wife (2 comments )
Reply Link Flag
fear of punishment is no way to lead america!!
running around with a pitch fork!? Invent! or Else!! no thanks bigbro.. HP execs kinda deserve it though.. all execs that use these practices do.. who wants to code for a jerk...

and there are hardly any niches left to fill... the things to be done to get everything back on track show no signes of profit..

"living wages are not in the peoples will..." - and you can quote me on that!
Posted by freq (121 comments )
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