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HP Update Before The U.S House Corporate Spying Hearings

Late on Wednesday June 27th, the U.S House of Representatives Energy and Commerce Committee's subcommittee on investigations released prepared testimony ahead of the next day’s hearings on the Hewlett-Packard corporate spying scandal. The Wall Street Journal in this article reports that:

Former Hewlett-Packard Co. Chairman Patricia Dunn said she learned in late spring of 2005 that phone records were accessed as part of H-P's board leak investigation. Ms. Dunn, in testimony prepared for a House committee hearing Thursday, said she had a "clear impression" from Ronald Delia, a private investigator involved in the investigation, that such phone records "could be obtained from publicly available sources in a legal and appropriate manner."

Ms. Dunn discussed the investigation with directors in March 2005 and in July 2005. "No director questioned me in board session or privately about concerns regarding how the investigation was being conducted," she said. After the investigation entered a second, more-intensive phase in 2006, Ms. Dunn said she remained convinced that H-P was doing nothing wrong in the leak probe, given that H-P lawyers were "unambiguously overseeing the investigation." Ms. Dunn said she and Mark Hurd, H-P's chief executive officer, were given a briefing on the probe in March 2006. "The report emphasized the lawful nature of the procedures," she said.

H-P's tactics, disclosed after director Thomas Perkins complained after resigning in May, include acquiring the personal phone records of at least 20 people, including board members, H-P employees and reporters, by impersonating them, a practice called pretexting. At least one director and two journalists were followed by investigators.

The prepared testimony for HP CEO Mark Hurd does not reveal many new details of how the corporate investigation could hhave gone so wrong. The WSJ article includes the following:

Rep. Ed Whitfield, the Kentucky Republican who chairs the House Energy and Commerce Committee's subcommittee on investigations, said he intends to grill Mr. Hurd on whether the H-P CEO also knew such invasions of privacy were potentially illegal. "We're going to ask him a lot of questions and get the facts out," Mr. Whitfield said in an interview. "I don't think there's any question that (Mr. Hurd) knew about this effort. Whether or not he knew there was pretexting and some of other problems, we'll have to find out."

Mr. Hurd, in testimony prepared for the hearing, reiterated his apologies about the tactics of the investigation, without disclosing many new details. "What began as a proper and serious inquiry into leaks to the press of company information became a rogue investigation that violated our own principles and values," he said. "Although the board was informed that an investigation had started, they were not told the operational details," he said.

In her testimony, Ms. Dunn says neither she nor Mr. Hurd "designed or implemented" the investigative techniques that were used. However she said both "were made aware of a 'sting' operation" that the investigators wanted to use against a CNET reporter. She said she left the final decision on whether to send an email with tracking software to Mr. Hurd. (Mr. Hurd, in his prepared testimony, says he approved the content of the fake email sent to the reporter, but does "not recall seeing, nor do I recall approving, the use of tracer technology.")

Earlier in the day, this House subcommittee issued five more subpoenas, all to private investigators who were subcontractors who worked for the Florida firm Action Research Group. The New York Times article Congress Calls 5 Detectives to H.P. Hearing has more details. Those subpoenaed were Bryan Wagner of Littleton, Colo.; Darren Brost of Austin, Tex.; Charles Kelly of CAS Agency in Villa Rica, Ga.; Cassandra Selvage of Eye in the Sky Investigations in Dade City, Fla.; and Valerie Preston of InSearchOf Inc. in Cooper City, Fla.