Hurd Apologizes, Probe 'Disturbing'

Hewlett-Packard Co. (NYSE: HPQ) CEO Mark Hurd today apologized to journalists the company investigated as part of its probe into leaks from directors and called the results of an internal probe "very disturbing to me."

Hurd also says Patricia Dunn has resigned as chairwoman effective immediately and he will replace her. HP announced Sept. 13 that Dunn would step down Jan. 1. (See HP Dumps Dunn, Appoints Hurd.)

Hurd did not answer questions during a brief press conference at HP's Palo Alto headquarters, but said he would appear Thursday before a U.S. House of Representatives committee investigating HP's spy program. Dunn and HP general counsel Ann Baskins are scheduled to testify the same day.

Hurd says he approved of the company hiring outside investigators to look into leaks from directors to reporters because "leaks hurt the company's reputation and its ability to operate effectively."

As for the investigation, he says "many of the right processes were in place. Unfortunately, they broke down and nobody on the management chain caught it, including me."Responding to press accounts that he knew about and might have approved of some of the unethical and possibly illegal tactics investigators used, Hurd said he knew beforehand about an email sent to a reporter that included false information. He said he did not know about the tracer technology that was supposed to determine who the journalist forwarded the email to.

"I do not recall approving of tracing technology," he said.

Hurd hired the law firm of Morgan, Lewis & Bockius Sept. 8 to investigate the results of HP's leak investigation. Although the law firm's investigation is ongoing, Hurd says "I believe we have a substantial set of the facts. I have a good understanding of what has transpired in the investigation. Some of the findings that Morgan Lewis discovered are very disturbing to me.

"I extend my sincere apologies to journalists investigated and everybody impacted."

After Hurd spoke today, Michael Holston of Morgan, Lewis presented details of the investigation. He said Morgan Lewis determined the original investigation included:

Most of those details had been previously disclosed by HP or reported in the press. Pretexting is an illegal practice of trying to obtain a person's personal information under false pretenses, often used in cases of identity theft. The California Attorney General is conducting a criminal investigation into HP's original leak investigation.

Holston did not name any of the journalists or HP employees or directors targeted by the probe.

HP today also hired former U.S. prosecutor Bart Schwartz, as counsel to perform an independent review of investigative methods.

"The intent of the investigation was proper and appropriate," Hurd insists. "The fact we had leaks on the board needed to be resolved."

Dave Raffo, News Editor, Byte and Switch0