RealTime IT News

Hurd: 'The People of HP Don't Deserve This'

PALO ALTO, Calif. -- HP's board chairwoman Patricia Dunn resigned today from her duties on the board, effective immediately, HP's CEO Mark Hurd said during a press conference here at company headquarters to address the company's pretexting scandal.

Hurd hoped to stem some of the tide of bad publicity HP's attracted this month. Revelations have been reported on an almost daily basis related to tactics used in its boardroom investigation into media leaks.

Dunn, who directed the investigation and oversaw the outside security agents charged with conducting it, had already announced she planned to step down in January. But that plan was widely criticized as not going far enough.

HP  also announced that board member Richard Hackborn has been named independent lead director of the company and Hurd has taken on the additional role as chairman of HP.

Hurd spent the first few minutes of the press conference looking down as he read prepared remarks. But he addressed the audience more forcefully as he detailed steps HP was taking to address the crisis and took responsibility for not being more aware of what was going on behind the scenes.

Hurd said he hired the law firm of Morgan, Lewis & Bockius earlier this month to do an independent investigation of what actions HP officials, and outside agents it hired, took to track board room leaks at the company.

"Some of the findings thus far are very disturbing to me," he said. "The people of HP don't deserve this nor do any of the people who were impacted. I take full responsibility to get this resolved."

A company spokesman announced at the start that Hurd would not take questions at the event, stating it would not be fair to preempt the Congressional committee looking into the matter. Hurd confirmed that he plans to appear before the committee. Dunn, HP general counsel Ann Baskins and some of the third party investigators HP hired have already agreed to appear.

While condemning some of the tactics used, Hurd stuck to his guns about the intent of the investigation.

"There has been a history at the company of information leaking in the HP board which is contrary to the ethics agreements of every employee and board member. I felt very strongly that leaks adversely affect the company's operations …. It was appropriate to investigate," said Hurd.

Later Hurd went through a blow by blow timeline of different phases of the investigation, who was involved and what he knew.

He did admit to approving a scheme to send an email with fake HP product details to a reporter in hopes that it would lead to which HP director was leaking information. However, Hurd denied approving another aspect of the plan, which was to put an electronic tracer in the phony email's attachment that would track the reporter's correspondence.

"I did not approve of tracer technology," said Hurd.

Mike Holston, a partner at Morgan, Lewis & Bockius detailed four different methods the outside investigators used:

Pretexting; the acquisition of social security numbers to engage in pretexting; physical surveillance of reporters and HP board members; and the electronic tracer. He said at this point, there is no evidence the tracer was ever activated.

In addition, he said investigators were allowed to search certain HP records.

Hurd said there were two sets of investigations following press leaks. The first one, started and concluded last year, but was unsuccessful in identifying where leaks to the press were originating from.

In early 2006, there were further leaks and HP, under the direction of Dunn, recalled Security Outsource Solutions, which had helped with the earlier investigation.

Hurd said a written report summarizing what SOS had done and planned to do, including the use of pretexting, was sent to him. "I did not read it. I should have," Hurd said.

Hurd extended "sincere apologies to every who was investigated," which includes some of HP's own PR staff as well as board members, journalists and family members.

"Integrity is a core value to HP," Hurd said. "The intent [of the investigation] was proper but the techniques used have no place at the company."