HP director scrutinized for snooping
SAN FRANCISCO — Hewlett-Packard Co. Chairwoman Patricia Dunn is under scrutiny from business and ethics experts after she oversaw an invasive and possibly illegal effort to snoop into the home phone calls of fellow HP board members.
Dunn, a former freelance journalist who has become one of the most powerful women in corporate America, oversaw the ouster of former HP CEO Carly Fiorina in February 2005 and the hiring of Mark Hurd as her successor. Now analysts say she may be the next one to leave.
“When you start spying on your own board, you darn well better have probable cause,” said Peter Morici, professor at the Professor Robert H. Smith School of Business at the University of Maryland. “If the chairman thinks this is the way business ought to be conducted, maybe it’s time for her to take a sabbatical. It’s arrogant and inappropriate.”
HP disclosed in a filing Wednesday with the Securities and Exchange Commission that the company sought the private telephone records of board members in a bid to determine which director leaked confidential company information to the media.
In the SEC filing, the company said it would decline to nominate one board member, George A. Keyworth II, for re-election because he was a source of the leaks. Keyworth, who has acknowledged leaking information, will end his service on the HP board no later than March 2007.
But HP also revealed that lawyers hired to review its tactics could not determine if the investigation “complied in all respects with applicable law,” the company said in the filing.
California’s attorney general subpoenaed some HP officials Wednesday and is examining the tactics of the investigation, which relied on a data mining method known as “pretexting.”
In this case, investigators hired by HP called the phone company and impersonated at least one board member to get logs of phone calls to and from his home, said the attorney of a former HP director.
California Attorney General Bill Lockyer characterized the state’s investigation as being in the “early fact-finding stage” and refused to say whether criminal charges would be brought against any director or the private investigators HP hired.
“I don’t have a settled view on whether it was illegal yet, but it certainly was colossally stupid,” he said in a phone interview Wednesday.
HP said in the filing it would cooperate with the state probe and that no recording or eavesdropping of directors’ phone conversations had occurred. Spokesman Ryan Donovan said the company would not provide other further details of the investigation. Dunn declined to comment through Donovan.
Keyworth’s departure comes after a January article on CNET Network Inc.’s News.com, which included a quotation from an anonymous HP source who described a gathering of HP directors at a posh spa in Southern California. Although the source didn’t leak high-level strategic details or say anything inflammatory, the statement angered Dunn, who has been on the board for eight years.
At a board meeting in May, Dunn identified Keyworth as CNET’s source, as well as the source of other leaks dating to early 2005. The board asked Keyworth, 66, to resign, but he refused.
The attempted ouster riled another board member, Tom Perkins, 74, who resigned and stormed out of the May 18 meeting.