WASHINGTON (FORTUNE) -- HP CEO Mark Hurd has now been through the iconic cauldron of raising his right hand at a Congressional hearing, swearing to tell the truth and nothing but, and having his strained visage beamed electronically across the land.

The morning after -- during an early-morning interview with Fortune at the Four Seasons Hotel in Washington, D.C., his first since the hearings concluded - Hewlett Packard's (Charts) chairman and CEO showed that he's bent but unbowed, and is not even considering stepping down from HP.

HP CEO Mark Hurd

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SCANDAL AT HP A controversial leak investigation has enveloped Silicon Valley stalwart Hewlett-Packard. Sept. 6 HP discloses that "pretexting" was used during an investigation into company leaks. California Attorney General Bill Lockyer says he's investigating the tactics used. Sept. 8 HP confirms the phone records of nine journalists were targeted during the internal probe. Sept. 10 HP's board of directors convenes an emergency meeting but no action is taken. Sept. 11 HP says the U.S. Attorney for Northern California has requested information related to its probe. House Committee on Energy and Commerce asks HP to hand over documents related to the investigation. Sept. 12 HP says Patricia Dunn will step down as chairman of the board in January and will be succeeded by CEO Mark Hurd. Board member George Keyworth resigns. Sept. 22 Dunn resigns as chairman and member of the board. Hurd takes over chairman position.

Read the documents Read Mark Hurd's prepared testimony Read Patricia Dunn's prepared testimony

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He is apologetic for approving the strategy of lying to the news media, but unwilling to question what that says about his own moral compass. He regrets not having paid more careful attention to the details of the leak investigation, but says even now that it's simply impossible to catch everything.

He says the buck stops with him, yet he isn't considering resigning and can't offer an example of any consequences he has suffered as a result of the ordeal -- other than a blemish on his professional record he knows will never vanish.

Hurd also reveals that no advisors' counsel ranks higher than his own instincts. He's been besieged, however, with well wishers he won't name, including more than a few who'd like to fill the open spots on HP's board.

On a personal level, Hurd hasn't been able to play tennis, his favorite way to blow off steam. Minor knee surgery is the culprit, and he says his doctor is on his case for not making it to rehab often enough. Giving Hurd a hard time for the things he hasn't done of late? Hurd's doctor ought to consider getting in line.

What follows are excerpts from Hurd's conversation Friday morning with Fortune Senior Writer Adam Lashinsky, who profiled Hurd in the magazine in April and who endured all seven and half hours of congressional testimony on Thursday.

How are you holding up? This must be stressful.

Fine. It's part of my job.

And yet this has to be a huge distraction.

In terms of the company, there are very few people distracted by this, to be very frank. Obviously there's a small group of people who are spending large amounts of time on this. But this was a very small group in the company that was working on this.

Okay, let's discuss the issue at hand. Regarding the now-famous scheme to send a false news story to CNET News in order to smoke out the board leaker - how good is your moral compass if you were willing to approve lying to the news media?

In our case, we had a fairly difficult situation, in terms of the fact that we had information that was strategic to Hewlett-Packard that continued to leak out of the company. We needed to stop it. Clearly the team's view was that they had to have some morsel of information to be able to attract the leaker. So that's the strategy.

What they wanted was my agreement that they could, what's the right word to describe it, dangle some important information in front of the leaker. And I agreed to that. Now, hindsight's 20/20. We get a little more experienced and a little smarter as we go through things. And I wouldn't do it again. But to be clear, I understood the team's strategy, and I agreed to that.

The fact remains that you describe it as a 'difficult situation.' But isn't a difficult situation exactly when someone's ethics are most important?

We could talk about this for a long time. It is what it is. We had a difficult situation. The team was working very hard to try to get the ... I've said enough.

Other than apologizing and promising to do better, which you've done repeatedly now, how can you convince investors, employees and the public that next time, you'll make the right decision in an ethical situation.

I don't know that you can ever convince anybody with words. It takes actions.

Is there an action you are contemplating that will show that?

Well, we'll see.

So is there something you're thinking about that you don't want to discuss.

Well, if you're thinking of a magic bullet, life doesn't work that way. Business doesn't work that way. Everybody always shows up and asks for magic strategic dust or operational dust to solve everything. And the answer is you don't. It's hard work, making sure that you continue to ... go to work.

You have a straight-talking, honest reputation, and HP has a reputation for virtuous business practices. All of that's being called into question right now. Should we just be cynical and assume people will lie when they can?

I don't agree with that. I'm going to speak for HP. I don't want to speak for the greater business community. I think HP at its core is an extremely ethical company. I cannot tell you if I ever heard anything at the company outside of the incident we are discussing that would concern me about the company's values. This situation is just disappointing. And I believe it to be an anomaly in light of the company's history and what's at the core of the company.

So the company is ethical at its core but unethical at one of its edges over the last two years.

As I told Congress, you've got a process here. Processes break in two ways. They break because they don't have the right checks and balances and because they don't have the right execution. This one broke down on both fronts. This wasn't the first process in the company that I went to look at, and I wish I could do that over again. But at the same time I do not believe that process is indicative of the greater Hewlett-Packard. Like anything else we need to go fix it.

Let's talk about the e-mail that explained the pretexting that you said you didn't read. Had you read it this all could have turned out differently. Either you'd be culpable or you would have caught the questionable behavior earlier and we wouldn't be sitting here.

Well, we might not be sitting here. But it was March meeting. It was my first shareholders' meeting. I was about to deliver a speech. I probably wasn't as focused as sometimes I might be. But it's a double-edged sword. You've got a document that's there on the table. I hadn't read the e-mail beforehand. The team is there to focus, to tell you as you walk in the room, 'here's the answer. The answer is X.'

Meaning the identity of the leaker?

Sure. Now the question is do you pick up the document and turn to page whatever, or do you say, 'are you sure?' He says 'I'm sure.' So then you say, 'what are we going to do?'

Now let me give you two thoughts. You could react by not confronting the problem. You talk about ethics. We've gone down the backward looking view. There's also the dimension that says, are you going to bury this or confront it. Pretty big question, right?

And I want to make something clear. I only know of the facts around the one leak. I don't know, there's been a lot of speculation around tens of leaks, and they associate with this one person [Jay Keyworth, a longtime HP board member]. This fact was about one leak from this one person who is a really good guy in the sense of contributions he made to Hewlett Packard over many years.

So now you're confronted with data that says, great contributor, and the team is looking at Pattie [Then board chairman Patricia Dunn] and saying 'what are you going to do.' And I can tell you if you're looking down at this room as you're making a decision, my first reaction wasn't to say, 'hey Pattie, why don't you look backward at how the data was collected.' The stress was, how are you going to confront the fact that was being presented to you. You're going to do what?

Now to your point, knowing what we know now I wish we'd looked at a different set of facts. But even at that point, what had been done had been done. You'd have been reacting at that point in time. I don't want to shirk any of this. The buck stops with me. But you can't have a CEO of a company our size being the backstop. The thought that I'm going to catch everything -- revenue, costs, personnel decisions, investigations... you know the scale of this company.

So you're saying that you did your best under the circumstances?

That makes it sound like I'm saying it's not my fault. It is. I had a buddy ask me, 'Will this be mark on your career?' Obviously it will be. Sure. It happened on my watch. History in the big picture will hopefully put it into context and look at how we deal with this. I think, again, I have to be able to rely on the fact that processes are sound.

In the end it comes down to picking the right people so you shouldn't have to be inspecting every single thing in that process every single time at every level of the organization. If you do, you will bog things down. This is a case where we didn't have a sound process, to be blunt. I had a couple of opportunities where I might have caught it, but I didn't catch it.

You've said the buck stops with you, but so far it hasn't. It has stopped so far with former Chairman Patricia Dunn and former General Counsel Ann Baskins, each of whom has resigned. You've effectively been promoted.

Well, I don't report to myself. I've been focused from the beginning on doing the best I can I trying to fix this.

Have you considered quitting?

No.

What's your advice to the 150,000 people who work for you in light of all this.

I tell people all the time, 'hold your head high.' I'm sorry for the people of HP that they've had to go through this. But I believe the company will regains its pride.

Can you tell me who've you been turning to for advice?

Uh-uh.

How 'bout generally?

When you're a leader at any level of any scale, leaders are defined at times of crisis. Everyone wants to lead when things are going well. In times of crisis you just have to bear down and lean on your own instincts and your own beliefs and make decisions.

Some of those are the product of multiple inputs you get, both experience and what advice you get. But in the end you have to make your own decisions. Nobody can sit where you sit. Lots of people can imagine and help. You just have to be able to catalyze those inputs and try your best to fit them into your situation.

Who has reached out to you?

Big-time people. I'm not going to embarrass them. Great folks. Last night I had an avalanche of communication.

Do you see the light at the end of the tunnel here?

We have other pieces to resolve. We've got a process that we've got to go rip apart and re-build. We have jobs to fill. We've got other litigation that's involved. So, no, this is end of the beginning. I'm not sure how public the rest of this will be.

It's hard to beat yesterday. We have some very good people that have left the company and the board. We have a lot of people who'd like to join the board. We're going to have to do for the board what we've done for the company. We have to re-build its very core.

______________________

HP's top lawyer out

Report: Computer in HP case smashed to bits