Hewlett-Packard Co.'s top lawyer resigned on Thursday as U.S. House of Representatives lawmakers scolded current and former top executives for invading individuals' privacy to find the source of boardroom leaks.
The scandal has claimed the jobs of four senior executives at the computer and printer manufacturer, including chairman Patricia Dunn and HP General Counsel Ann Baskins who resigned on Thursday.
We hope to get a better understanding today why no one among this group of very smart and experienced people had the good sense and courage to say stop, Rep. Edward Whitfield, chairman of the House Energy and Commerce subcommittee on investigations, said at a standing-room only hearing.
Baskins invoked her right not to testify at the hearing.
The computer and printer manufacturer has admitted its investigators impersonated company board members, employees and journalists to get their telephone records, a practice known as pretexting.
Dunn said in written testimony she was assured by others the practices used were legal and believed the leak investigation, started in 2005, had been authorized by Bob Wayman, chief financial officer and acting chief executive at the time.
An HP spokesman denied Wayman's involvement. Dunn said Wayman had referred her to the head of HP global security who in turn led her to private investigator Ronald DeLia of Security Outsourcing Solutions Inc.
As a matter of course, I asked Mr. DeLia at every point of contact for his representation that everything being done was proper, legal and fully in compliance with HP's normal practices, said Dunn, who resigned last week.
DeLia invoked his constitutional right against self-incrimination and refused to testify at the hearing. Others who exercised that right included Anthony Gentilucci, former head of global security for HP, and HP ethics officer Kevin Hunsaker.
HP is under investigation by the U.S. Justice Department, California's attorney general and the Securities and Exchange Commission.
Why weren't you paying attention at briefings and why didn't you read the reports that raised red flags, asked Rep. John Dingell, the top Democrat on the full committee, at the start of the hearing. Where was board leadership and responsibility?
There were warnings the investigation methods were improper when HP revived its leak search in early 2006.
In a February 7 e-mail, HP security official Vince Nye told Gentilucci he had serious reservations about the methods DeLia used, calling them very unethical at the least and probably illegal.
Nye urged that the phone number gathering method stop.
Other documents released at the hearing show Dunn and Baskins were reassured several times by Hunsaker and hired investigators that pretexting was legal.
HP CEO Hurd said in his written testimony that he attended parts of meetings where the investigation was discussed and approved the content of an e-mail with false information to be sent to a reporter to try to learn the source of leaks.
HP's investigation went so far as to furtively track board members and journalists.
To go to this level to try to find out who might be leaking something, there's just no excuse for it, there just isn't, said Rep. Greg Walden, an Oregon Republican.
Under Hurd, who joined HP in April 2005, the company has enjoyed a rebound in its performance. HP shares are up 23 percent since the start of the year and were 18 cents higher to $35.57 late Thursday morning on the New York Stock Exchange.
The leaks were wrong and we had an obligation to our employees and shareholders to resolve the problem, Hurd testified. However, two wrongs do not make a right.
The House of Representatives and Senate are bickering over whether to pass a narrow bill focusing on criminal penalties for obtaining or selling telephone records surreptitiously, or a broader measure that orders more safeguards for such data.
(Additional reporting by Duncan Martell in San Francisco, John Crawley and Karey Wutkowski in Washington)