HP Chairwoman To Step Down After Spying Scandal

Hewlett-Packard said Sept. 12 its chairwoman Patricia Dunn was stepping down after HP was threatened with prosecutions over an espionage scandal. Dunn, who took over last year as non-executive chairwoman after Carly Fiorina, apologized after private detectives that she had hired to investigate boardroom leaks to the media "went beyond" their mandate.

HP said that its chief executive officer and president, Mark Hurd, would succeed Dunn as chairman of the technology giant at a board meeting on January 18. Dunn will continue to serve as a director.

The California state attorney general's office and federal prosecutors are investigating whether the private eyes hired by HP broke the law by impersonating board members and journalists to get private telephone records.

The company said it was "cooperating fully" with the inquiries but Dunn has denied authorizing illicit tactics. "Unfortunately the investigation, which was conducted with third parties, included certain inappropriate techniques," she said. "These went beyond what we understood them to be, and I apologize that they were employed."

HP's board met over Sunday and Monday to decide Dunn's fate as the scandal escalated. She had hired the detectives to ferret out who had been leaking information from board meetings to the press. The private investigation identified a board member as the suspected leak, but did so by getting telephone records with a ruse known as "pretexting," calling the telecom company and posing as customers. While no law on the California books specifically outlawed "pretexting," state prosecutors believe the deception violated laws regarding identification theft and unauthorized access to computer data.

Silicon Valley venture capitalist Thomas Perkins, who resigned from the HP board in protest at the leak probe tactics, had called for Dunn to resign. Dunn has claimed that Perkins advocated strong investigative techniques such as lie detector tests, and that his change of heart came only after the leaker was fingered as his friend, George Keyworth. Keyworth is also resigning from the board, according to reports.

HP's incoming chairman promised a clampdown. "The company will work to put these matters behind us so that we fully resume our focus on the business and continue to earn the trust and support of our customers, employees and stockholders," Hurd said.

Copyright Agence France-Presse, 2006

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