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Saturday, September 23, 2006

HP Scandal grows

Noah Berger for The New York Times
Mark V. Hurd, the chief executive of Hewlett-Packard,
said that Patricia C. Dunn had resigned as the chairwoman
of the company. He apologized to those whose privacy was
invaded in corporate spying.

Chairwoman Leaves Hewlett in Spying Furor
Published: September 23, 2006

PALO ALTO, Calif., Sept. 22 — The furor over Hewlett-Packard’s spying operation claimed its highest-ranking victim on Friday with the immediate resignation of its chairwoman, Patricia C. Dunn.

The move was announced by Mark V. Hurd, the chief executive, who will now succeed her. But even as he offered an account of an investigation gone awry, and offered apologies to those whose privacy was invaded, he made it clear that many questions had yet to be answered.

His voice shaking, Mr. Hurd said a review of the means used to trace leaks from the company’s board had produced “very disturbing” findings. He also conceded that “I could have, and I should have,” read a report prepared for him while the operation was under way.

The investigators’ zeal led them into a shadowy world of surveillance, and in the end the giant computer company was embarrassed by its own use of technology.

Two executives who supervised the effort were also reported to be leaving.

In addition to direct surveillance, the operation entailed the use of possibly illegal methods to obtain phone records of board members, journalists and others; an attempt to place software on a reporter’s computer to track e-mail; and a study of the use of clerical workers and cleaners to infiltrate two news organizations.

At a news conference at Hewlett-Packard’s headquarters here, Mr. Hurd said it had been proper and necessary for Ms. Dunn to try to stem leaks of confidential information. But he added, “While many of the right processes were in place, they unfortunately broke down, and no one in the management chain, including me, caught them.”

It was the company’s first public discussion of the revelations that have engulfed it for more than two weeks. Mr. Hurd took no questions, with the company saying he did not want to pre-empt his testimony next week to a House subcommittee looking into the Hewlett-Packard affair.

In a statement provided by Hewlett-Packard, Ms. Dunn said she had resigned at the request of the board. But she said that while she had the responsibility to identify the source of leaks, “I did not propose the specific methods,” and those who performed the investigation “let me and the company down.”

According to people briefed on Mr. Hurd’s plans, Kevin T. Hunsaker, its senior counsel and director of ethics, and Anthony R. Gentilucci, its Boston-based manager of global investigations, will leave the company. Mr. Hurd did not speak to this issue, and the company declined to comment.

Some industry analysts had expected Hewlett-Packard to announce more directly who it felt was responsible, inside or outside the company.

This is going to court, several courts. Between California's anti-stalking laws and federal law, you have a legal nightmare for HP.

They must have thought they were in a movie. They weren't. Dunn better have a real good criminal and civil lawyer.

posted by Steve @ 1:48:00 AM

1:48:00 AM

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