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Last state charges in HP spying case dropped

/ Source: The Associated Press

A Santa Clara County judge dismissed the remaining charges against three defendants in the Hewlett-Packard Co. boardroom spying case Thursday, calling their conduct a "betrayal of trust and honor" that nonetheless did not rise to the level of criminal activity.

Superior Court Judge Ray E. Cunningham followed through on a deal reached in March to drop reduced fraud charges if the defendants — former HP ethics chief Kevin Hunsaker and private investigators Ronald DeLia and Matthew DePante — each completed 96 hours of community service.

The move ended the state's role in a case that ensnared some of the top officials at the venerable HP, now the world's largest technology company by revenue.

A federal investigation is continuing.

Hunsaker and the two private investigators, who had pleaded no contest to misdemeanor charges of fraudulent wire communications, were accused of illegally obtaining the phone logs of directors, journalists and HP employees in an effort to identify board members leaking confidential information to the media.

In tossing the misdemeanor charges, Cunningham praised the California attorney general's office for its investigation of HP's ill-fated effort to root out the source of boardroom leaks, but said the defendants' actions were not criminal at the time they occurred.

"At worst, the conduct in this case amounted to boardroom politics and a betrayal of trust and honor, rather than criminal activity," the judge said, according to a transcript of his remarks supplied by the attorney general's office.

The judge said the investigation nevertheless "achieved much public good," including helping spur the passage of state and federal legislation specifically outlawing "pretexting," or pretending to be someone else to secretly secure copies of their private telephone logs.

In addition, the state reached a $14.5 million civil settlement with HP in December, the bulk of which is slated to fund state and local investigations into privacy rights and intellectual property violations.

Ralph Sivilla, a deputy attorney general, said after the hearing that state prosecutors still think criminal conduct occurred, but that the office was satisfied with this resolution of the criminal case because of the "chilling effect" the HP investigation had on similar sleuthing tactics.

Thomas Nolan, one of Kevin Hunsaker's defense lawyers, said the defendants paid a "pretty heavy price" in being prosecuted and that "the people at HP, everyone, felt they were doing the right thing and basically didn't believe they were committing any crime."

The judge's comments and the ultimate dismissal of the charges backed up that belief, Nolan said after the hearing.

Five people, including former HP Chairwoman Patricia Dunn, were originally charged in October with four felony counts in the HP probe: use of false or fraudulent pretenses to obtain confidential information from a public utility; unauthorized access to computer data; identity theft; and conspiracy to commit each of those crimes.

Charges against Dunn, who was accused of orchestrating the spying effort, were dropped in March.

State charges against private investigator Bryan Wagner were also dropped, but only after he pleaded guilty to two federal felony counts of identity theft and conspiracy in the case.

Wagner's sentencing is set for October in San Jose federal court, and the federal probe is ongoing.