H-P scandal worsens

Watchin the detective

Hewlett Spying More Elaborate Than Reported

By DAMON DARLIN
Published: September 18, 2006

A secret investigation of news leaks at Hewlett-Packard was more elaborate than previously reported, and almost from the start involved the illicit gathering of private phone records and direct surveillance of board members and journalists, according to people briefed on the company’s review of the operation.

The effort received some degree of supervision from three officials — Patricia C. Dunn, the company’s chairwoman, along with its general counsel and another staff attorney — but was quickly farmed out to a network of private investigative firms early last year, according to descriptions of the findings. It is still unclear how much they knew about the details.

Those briefed on the company’s review of the operation say detectives tried to plant software on at least one journalist’s computer that would enable messages to be traced, and also followed directors and possibly a journalist in an attempt to identify a leaker on the board.

The revelations at Hewlett-Packard, the computer and printer maker that helped define Silicon Valley, have provided a rare glimpse of boardroom turmoil — resulting in Ms. Dunn’s agreement to step down as chairwoman in January, and two resignations from the board.

But they have also cast a harsh light on the questionable and possibly illegal techniques used in the episode, raising the possibility of criminal charges in investigations under way by the California attorney general and the United States attorney in San Francisco.

The hunt for a boardroom leaker began as early as January 2005, with a focus on disclosures immediately preceding the ouster of Carleton S. Fiorina as chairwoman and chief executive, with a second phase that began a year later. Hewlett-Packard has said that as a public company, it had a responsibility to stop unauthorized disclosures.

But the review reveals that the investigation by its detectives was notable for a lack of close supervision by company officials.

The people briefed on the internal review said that at various times, questions were raised about the legality of the methods used. They did not identify who raised the questions, when, or to whom they were addressed. But a crucial legal opinion was supplied by a Boston firm that shares an address and phone number with one of the detective firms working on the case.

Those speaking about the company’s review would do so only if they were not identified. A Hewlett-Packard spokesman yesterday declined to comment on their account.

In addition to the scrutiny by prosecutors, a House subcommittee has also entered the case, asking for documents on the internal investigation to be delivered today in advance of a Sept. 28 hearing in Washington.

Some of those documents are expected to reveal that detectives made several attempts at direct surveillance of some directors, and were given photos of reporters to help identify them.

At least one reporter, Dawn Kawamoto of the online technology news service CNET, may have been followed as part of the 2006 investigation, said a person briefed on the investigation. Ms. Kawamoto was the co-author of an article on a senior management meeting held in January.

The detectives also tried to plant software in the computer of a CNET reporter that would communicate back to the detectives, people briefed on the company review said. Ms. Kawamoto said in an interview earlier this month that prosecutors had told her that such a ploy may have been used, but said she was not aware of any surveillance.

Representing themselves as an anonymous tipster, the detectives e-mailed a document to a CNET reporter, according to those briefed on the review. The e-mail was embedded with software that was supposed to trace who the document was forwarded to. The software did not work, however, and the reporter never wrote any story based on the bogus document.

No way this doesn't wind up in court.