HP's Hurd plans to call leak probe 'a rogue investigation'

HP's Hurd's prepared testimony for the House hearing has been released

When Mark Hurd, the Hewlett-Packard Co. CEO and chairman, testifies before Congress on Thursday, he will call his company's search for the source of boardroom leaks a "rogue investigation" and plans to again express regret for not catching it before it mushroomed into a corporate scandal.

And Patricia Dunn, the former HP chairman who resigned last Friday, plans to tell the subcommittee investigating HP's acquisition of private phone records that she knew the records were acquired but "was fully convinced that HP would never engage in anything illegal."

Their written testimony was released late today by the U.S. Commerce and Energy Committee Oversight and Investigations Subcommittee, which will hear from Dunn and Hurd -- and more than a dozen other witnesses -- on Thursday. You can download PDFs of Hurd's 12-page testimony and Dunn's 33-page testimony.

The hastily assembled hearing follows revelations earlier this month that HP, in an effort to root out boardroom leaks, acquired the private telephone records of journalists and boardroom members through the use of a deceptive practice called "pretexting."

Hurd, in a news conference Friday, said he was unaware of the investigation's practices. And when he testifies tomorrow, he will again express regret for not digging deeper into the probe. Dunn said in her planned testimony that she did not hire the investigators and thought the probe was being conducted under the watchful eyes of HP's legal team.

Dunn also said she was aware that during late spring of 2005 "that phone records were accessed as a standard component of such investigations by HP. I became aware from [private investigator Ronald] Delia that phone records were accessed as a standard component of such investigations by HP."

DeLia, managing director of Security Outsourcing Solutions Inc., is among those called by the committee to testify.

"The clear impression I had from Mr. Delia was that such records could be obtained from publicly available sources in a legal and appropriate manner, and that this was just one of several methods that would be pursued in the investigation. I now believe that not only I, but all of the executives upon whom I relied at HP, whose integrity I have never questioned to this day, were similarly confident that these records were accessed under fully legal circumstances."

In sum, what Hurd detailed is an awareness of the investigation without a complete picture of the methods being used. And Dunn said she believed that the HP legal staff would ensure that whatever was done was legal.

In September, HP disclosed to the U.S. Securities and Exchange Commission that phone records were obtained using a method called "pretexting," which is pretending to be someone else to acquire phone records. It has touched off state and federal investigations and the threat of criminal charges.

"What began as a proper and serious inquiry into leaks to the press of company information became a rogue investigation that violated our own principles and values," Hurd is prepared to say in his testimony. He will also apologize to nine journalists as well as seven former and current HP board members. p> Hurd said the company will soon provide the victims "details regarding the information obtained about them, the means by which was obtained, when it was obtained and who obtained it."

"Members of the committee," Hurd wrote in his prepared remarks, "I am not putting myself above the breakdown that occurred. I wish I had asked more questions. There are signs I wish I had caught."

Dunn will tell committee that the investigative practices were never raised as issue to her by HP officials.

"No director questioned me in board session or privately about concerns regarding how the investigation was being conducted," she said. "I had the clear impression that they were satisfied that I had taken their priority seriously and that they fully expected whatever was being done would be done properly.

"I am not a lawyer and I am not an investigator," said Dunn, "but I had a responsibility to respond to HP directors' desires to stop leaks from the board. I relied on trusted people who were lawyers and investigators to perform the work on their behalf. Along the way I requested for and received assurances that the investigation was both legal and compliant with HP's Standards of Business Conduct.

"Nonetheless, serious questions have been raised about the ethics and legality of the investigation," she said.

"The fact that so many lawyers who were involved in the HP matter could turn out to be either so misled or so uncertain as to the legality of 'pretexting' speaks volumes as to the need for unambiguous legislation to protect individual privacy.

"I was fully convinced that HP would never engage in anything illegal, and the privacy issues related to our directors were balanced in my mind against their eagerness to get to the bottom of the problem," she said.

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