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Ahead of Congressional Hearings, HP General Counsel Resigns

The Wall Street Journal reports here that Hewlett-Packard’s General Counsel, Ann Baskins, has resigned, effective immediately, the morning before her scheduled testimony to Congress regarding the HP corporate spying scandal. The Congressional hearings begin on Thursday, September 28th at 10 AM ET. The article states:

Ms. Baskins's resignation follows on the heels of the resignation of Chairman Patricia Dunn from the Palo Alto, Calif.-based maker of computers and printers. Both are expected to appear at a congressional committee hearing about the company's possible use of inappropriate methods to obtain information about board members, who were believed to be leaking information to journalists.

However, Ms. Baskins won't testify at the hearing. She will invoke her constitutional right not to testify for fear of incriminating herself in the company's scandal, her lawyers said Thursday. “Please understand, however, that Ms. Baskins very much wants to testify and discuss these matters,'' her lawyers said in a letter to the House Energy and Commerce Committee. "Were she to do so, we are firmly convinced that the Subcommittee would recognize that she acted legally and ethically at all times. Given the current environment, however, Ms. Baskins simply has no choice.” [A copy of the letter from her lawyers Chris Arguedas and K. Lee Blalak is here.]

Ms. Baskins was the top HP employee with responsibility for the Kona I and Kona II investigations into the leaking of corporate information from the HP Board of Directors. Clearly, she bears some degree of responsibility if either state or federal prosecutors were to charge either Hewlett-Packard itself or some of its employees with criminal conduct, which California Attorney General Bill Lockyer has indicated is likely given the evidence that already has been uncovered. Testifying under oath before the Congressional subcommittee without a grant of immunity from prosecutors would leave Ms. Baskin vulnerable to having her testimony used against her at some future point, much like what happed to former Enron CEO Jeffery Skilling when he testified after the Enron meltdown. On the hand from the Hewlett-Packard perspective, it is completely unacceptable to have the company’s chief legal officer taking the fifth before Congress. The political and possible legal ramifications would be intense. Hence, with the decision to invoke her Fifth Amendment rights, Ms. Baskin simply had to leave Hewlett-Packard – one way or another.

HP CEO Mark Hurd said in a statement, “Stepping down was a very hard decision for her [Baskins], but by doing so she has put the interests of HP above her own and that is to be commended.” The tone of Mr. Hurd’s comment makes one wonder just how much Ms. Baskins was ‘encouraged’ to submit her resignation. She now joins Patricia Dunn, Kevin Hunsaker and Anthony Gentilucci in leaving HP as result of former HP director Tom Perkins’ demands that HP disclose why he suddenly resigned in May 2006.

UPDATE: The San Jose Mercury News has more information in this article about why attorney Ann O. Baskins thought that the HP investigative techniques were legal. It is well worth reading. The other documents well worth reading are the exhibits at the back of Ms. Baskins’ letter to Congress.