HP leaders to express regrets to House
Former chairman Dunn says she thought investigation tactics were legal; CEO Hurd shifts focus to the future.
By Grace Wong, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Hewlett-Packard Chairman and CEO Mark Hurd and recently ousted chairman Patricia Dunn are set to express regret to a House committee Thursday over the methods used in the company's leak investigation, but they also will seek to distance themselves from tactics used, according to their prepared testimony.

The House Energy and Commerce Committee released prepared testimony from Dunn and Hurd Wednesday evening ahead of a hearing on the company's controversial spying program.

Lawmakers will seek more details of their involvement in the boardroom probe Thursday during a question and answer session before the panel.

In her prepared testimony, Dunn said she became aware that phone records were obtained during the probe in the spring of 2005 but that she believed these records were accessed legally.

Notably not testifying will be Ann Baskins, who resigned Thursday as the company's general counsel. She will invoke her right not to testify, according to attorneys quoted by Reuters.

HP has been grappling with a privacy scandal since it disclosed early this month that its investigators used "pretexting" - a potentially illegal practice that involves using false pretenses to obtain personal information - in order to access phone records of board directors, employees and journalists.

In the latest revelation of what went wrong at the technology giant, the New York Times reported Thursday that Vince Nye, a senior investigator for the firm, was warning early this year that the techniques used in the probe were "very unethical at the least and quite likely illegal."

Nye reportedly sent an e-mail to Anthony Gentilucci, HP manager of global security, warning about the practices used to obtain phone records, the newspaper said. But that message apparently never reached the top levels of HP.

Dunn is prepared to say she was under the impression that HP chief financial officer Bob Wayman had authorized the leak probe and that at no point did she consider herself the investigation's "supervisor."

HP said Wayman wasn't involved in the probe. "To the best of our knowledge, Bob Wayman had no involvement whatsoever in the leak investigation. Any assumption about Bob Wayman's involvements made by Ms. Dunn was nothing more than that, an assumption," spokesman Ryan Donovan said.

Dunn has taken the brunt of the criticism surrounding the leak investigation - last week she resigned as chairman and director at the request of the board. But she defended the need to find the source of the leaks in her testimony, describing it as "unfinished business" in the wake of ousted chief executive Carly Fiorina's departure in February 2005.

Hurd, in his prepared remarks, said the use of potentially illegal tactics occurred because of a breakdown in internal controls and that the investigation team became so focused on finding the leaker they lost sight of the company's values.

Hurd, who has come under fire for not doing enough in the wake of the spying scandal, said he wishes he had asked more questions but that he is focusing on how the company addresses its mistakes.

His remarks echoed those he made at a press briefing on Friday, when he acknowledged he was aware of some questionable tactics.

The House Energy and Commerce Committee has requested the testimony of a string of others involved in the case.

The House panel said Wednesday it had subpoenaed five private investigators to testify at the hearing. Ronald DeLia, one of the private investigators who worked on the probe, also has been subpoenaed.

Pretexting is at the center of an investigation that has been building in Congress for months. State and federal authorities have also been investigating the practice.

California Attorney General Bill Lockyer has said crimes were committed at HP and that he has enough evidence to indict HP officials and outside contractors.

The HP scandal has rocked the Silicon Valley heavyweight's board. George Keyworth, who was fingered as the source of the leaks, and his friend Thomas Perkins both quit the board in protest of the company's surveillance tactics.

But shares of HP (Charts), which have outperformed rivals Dell (Charts) and IBM (Charts) in the last year, have held up fairly well. Shares have dipped about 3 percent in the three weeks since the scandal broke.


HP lights the privacy powder keg Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.