Video: Calif. AG speaks on HP scandal

msnbc.com news services
updated 9/8/2006 8:42:23 PM ET 2006-09-09T00:42:23

Hewlett-Packard Co. Chairwoman Patricia Dunn, under fire for a crusade against boardroom leaks that authorities say broke the law, said Friday she had no plans to resign but would do so if fellow board members ask her to.

“I serve at the pleasure of the board,” Dunn told The Associated Press in an interview. “I totally trust their judgment. If they think it would be better for me to step aside, I would do that. But a number of directors have urged me to hang in there.”

Dunn told Reuters the board would hold an informal telephone conference Sunday to discuss the issue, which has sparked an inquiry by California’s attorney general that could result in criminal liability for identity theft and illegally accessing database information.

“Our board certainly had no idea” of the privacy breaches, Dunn said in an interview, adding, “This problem won’t recur.”

Dunn’s crusade spawned a ruse to obtain the personal phone records of company directors and at least nine reporters. It has put HP’s board at the center of an imbroglio that threatens to distract the Palo Alto-based company as it tries to build on a recent run of success in the personal computer and other high-tech markets.

Incensed by several media stories, including some in the run-up to the ousting of Chairman and Chief Executive Carly Fiorina in February 2005, Dunn authorized an investigation this year to determine if any of the company’s directors were talking out of turn.

The inquiry convinced HP that George Keyworth II had been providing reporters with confidential company information. The company is punishing him by preventing him from running for re-election to the board.

"This was a person who had been a habitual long-term leaker," Dunn said in an interview Friday.

She branded the leaks as an “egregious breach” of HP’s standards and emphasized the investigation was conducted with the full backing of the board. “This was not my spy campaign on our board.”

As part of their surveillance, the company’s investigators posed as HP directors and reporters to obtain personal phone records. The investigators used the Social Security numbers of the people involved to dupe the phone companies into turning over the records.

California Attorney General Bill Lockyer is already convinced HP’s investigation broke state law, but is still digging to determine the breadth of the violations.

The invasion of privacy so infuriated one HP director, longtime Silicon Valley venture capitalist Tom Perkins, that he resigned from the board in May and triggered a chain of events that forced HP to publicly disclose its role in the pretexting this week.

On Thursday, Lockyer said HP’s clandestine investigation violated two California laws related to identity theft and illegal access to computer records. However, he said he had not decided whether the company or anyone acting on its behalf will face civil or criminal charges.

“The question was, was a crime committed? The answer is yes. Does that mean charges will result? Well, we haven’t completed the investigation, so we’re not yet certain as to who committed the crime,” Lockyer told the AP.

“It’s likely if evidence continues to come in the way it has that there will be a prosecution,” he said. “But we’re not ready to go file a complaint. We’re still investigating.”

Company spokesman Ryan Donovan said HP had given Lockyer’s office the list of reporters whose personal information was compromised and the journalists themselves have since been notified.

The nine include Pui-Wing Tam and George Anders of The Wall Street Journal, Dawn Kawamoto and Tom Krazit of CNET Networks Inc.’s News.com and John Markoff of The New York Times, those news organizations disclosed.

The New York Times Co. said it would consider taking legal action if the computer maker violated its reporter’s rights by gaining access to his private phone records. Markoff said he is “waiting to see what happened and what others do” before he decides whether to take personal legal action.

CNET has asked HP to give the company “a full accounting of all the actions taken,” said spokeswoman Sarah Cain.

HP could face criminal charges
Experts in privacy and telecommunications law say HP officials or the private investigators they hired could face criminal charges. The company also could also be liable to civil charges.

Lockyer said HP’s antics violated directors’ and journalists’ right to privacy, which is guaranteed in California’s Constitution.

“The crime seems to have been committed by the data broker, but that leads to the question of who knew what and when,” Lockyer said. “How many others were part of the illegal activity — we don’t know the answer to that yet.”

People involved in the HP investigation may have also violated a California Civil Code banning a corporation’s communication of employee Social Security numbers to the public.

One of HP’s private investigators obtained the last four digits of the Social Security number of Perkins. The investigator called AT&T and impersonated Perkins, asking AT&T to send a record of phone calls to and from his house in December 2005 and January 2006 to a free, Web-based e-mail account.

Reuters and The Associated Press contributed to this story.

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