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.”

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