Hurd, Dunn to testify before probe panel today

Hewlett-Packard Co. (HP) Chief Executive Officer and President Mark Hurd, and former board chairman Patricia Dunn will testify before a U.S. House of Representatives subcommittee probing the pretexting case today.

The probe panel has also issued five more subpoenas to compel witness testimony.

The Subcommittee on Oversight and Investigations of the Energy and Commerce Committee issued subpoenas Wednesday for five people identified as “pretexters,” data brokers who sometimes obtain access to confidential records under false pretenses.

HP has been embroiled in a scandal over its hiring of private investigators who engaged in possibly illegal pretexting to investigate news leaks from HP’s board to reporters.

Served with subpoenas, according to the Subcommittee, are: Bryan Wagner, a private investigator from Littleton, Colorado; Charles Kelly, of the CAS Agency in Villa Rica, Georgia; Cassandra Selvage of Eye in the Sky Investigations, of Dade City, Florida; Darren Brost, of Austin, Texas; and Valerie Preston from InSearchOf Inc., of Cooper City, Florida.

Wagner was identified in a Wednesday Wall Street Journal article as a suspect in the pretexting of phone records of HP directors, employees and journalists who cover the Palo Alto, California technology company. The Journal reported that Wagner told an investigator that he smashed his computer to pieces with a hammer, destroying data that was saved on it. The article also said that the destruction of the computer may hamper an investigation by California Attorney General Bill Lockyer’s office into possible illegal activity by people at HP or by the private investigators HP hired.

The five who were subpoenaed Wednesday have been added to a list of witnesses that also includes HP’s Chief Executive Officer and President Mark Hurd, and former board chairman Patricia Dunn who resigned last Friday because of the scandal.

While Dunn and Hurd have volunteered to appear, two other HP executives involved in the investigation were subpoenaed: senior counsel Kevin Hunsaker and Global Security Manager Anthony Gentilucci. Hunsaker “left the company” and Gentilucci “resigned” effective Tuesday, said HP spokesman Ryan Donovan.

Also subpoenaed are Ron DeLia, operator of Security Outsourcing Solutions Inc., a Needham, Massachusetts, private investigations firm, and Joe Depante, owner of Action Research Group, of Melbourne, Florida. HP has acknowledged hiring both those firms in its leak investigation and that they used pretexting to track down personal phone records.

Meanwhile, another top Hewlett-Packard Co. executive will leave the company, with HP’s announcement on Thursday that its general counsel, Ann Baskins, has resigned, effective immediately.

It is unclear how closely involved Baskins, who worked for HP for 24 years, was in the internal investigation scandal plaguing HP. The company is being investigated for potentially using illegal methods in its hunt to uncover an internal source leaking information to the press.

In a recent filing with the U.S. Securities and Exchange Commission (SEC), HP notes that Baskins participated in meetings with private investigators where they discussed pretexting, a method of obtaining confidential records under false pretenses. One such discussion took place in a telephone conference on June 15, 2005, in the early phase of the investigations.

HP has acknowledged using pretexting, a potentially illegal practice, in its investigation. In a statement announcing Baskins’ resignation, Mark Hurd, HP’s chairman and chief executive, commended Baskins for her hard work and said that she has put the interests of HP above her own by stepping down.

Hurd blamed the scandal that has besieged his company on “a rogue investigation” that got out of hand, in an advance copy of his Congressional testimony released by a House Subcommittee on Wednesday.

“How did such an abuse of privacy occur in a company renowned for its privacy? The end came to justify the means,” Hurd wrote. “The investigation team became so focused on finding the source of the leaks that they lost sight of the privacy of reporters and others. They lost sight of the values HP has always represented.”

Former HP Chairman Patricia Dunn, forced to resign Sept. 21 because of the scandal, defended in her testimony her decision to investigate the leaks of confidential board discussions to the news media.

In her testimony, Dunn wrote that she knew investigators were obtaining the phone records of people it was investigating. Lawyers for HP and for an investigation firm carrying out the probe assured her the tactics were legal, she wrote.

“I was fully convinced that HP would never engage in anything illegal,” she wrote. “Given that attorneys were unambiguously overseeing the investigation … reinforced my understanding that the investigations were being handled appropriately.”

Hurd, echoing comments he made in a news conference last Friday at HP’s headquarters, said he was determined to get to the bottom of this episode and to try to restore HP’s image.

“I pledge that HP will take whatever steps are necessary to make sure nothing like this ever happens again,” he wrote, “and that this company will regain not just its reputation … but its pride.”

Although much of the criticism of the scandal surrounds the tactics used by the investigators, Dunn wrote in her testimony that equal consideration should be given to the leaks from within the company that damaged HP.

HP’s board was notorious for its leaks to news media and such disclosures made it difficult for the board to deal with important issues candidly, she wrote.

Dunn explained that board deliberations on the selection of a replacement for former CEO Carly Fiorina in 2005 were leaked. She cited a BusinessWeek magazine story “disclosing opinions about various candidates and revealing details about … the search process.”

“If you were a top CEO candidate, would you want to work for a company whose board could not be trusted to keep such information confidential? HP is very lucky to have been able to recruit Mark Hurd under such circumstances,” Dunn wrote.

“I wish fervently that none of this had ever happened,” Dunn continued. “But boards have an unquestionable obligation to take steps to prevent [leaks]. That certain steps taken during the investigation went well beyond what was appropriate does not undermine the importance of the board’s mission in this matter.”

Hurd also outlined several steps the company is taking internally to clarify its privacy policy for employees and to emphasize it in employee training programs.