California Attorney General Bill Lockyer says criminal charges are likely in the scandal surrounding alleged spying involving the board of Hewlett-Packard, but a spokesman for Lockyer said the investigation could take months.
Meanwhile, the HP board will hold a special meeting via conference call on Sunday to discuss the fallout from the issue, HP spokeswoman Emma Wischhusen told IDG News Service.
Chairman Patricia Dunn says she will not resign over the scandal and that she was appalled that contractors hired to investigate news leaks used
potentially illegal methods, according to news reports.
Chief Executive Officer Mark Hurd, in a letter to company employees that was
released late Friday, urged them to keep focused on their work. "The media
coverage and speculation regarding the recent actions of the HP Board … have
nothing to do with the strategy or operations of Hewlett-Packard," he said.
Hurd, who emphasized that he was speaking as CEO and not as a board member,
added: "There has been a long history of leaking company information with the
HP board that clearly needs to be resolved."
HP is on the defensive after the disclosures this week that phone records of HP
board members and journalists were hacked to see who on the board discussed
with reporters confidential board strategy sessions earlier this year. The
company disclosed in a U.S. Securities and Exchange Commission filing Wednesday
that investigators, in order to identify the leaker, had used "pretexting," a
method in which false pretenses are used to gain online access to others' phone
The investigation determined that director George Keyworth was the source for a
Cnet.com story in January about HP's strategy.
Keyworth was asked to resign from the board in May but refused. Board member
Thomas Perkins, a renowned Silicon Valley venture capitalist, did resign in May
in protest over concerns with the HP board's handling of investigations into
leaks of confidential information.
The news that the phone records of nine reporters who cover HP were hacked has
outraged some in the journalism profession.
"HP. Does that stand for Hewlett-Packard or 'Hackers of Privacy?'" asked
Christine Tatum, president of the Society of Professional Journalists, a
professional and advocacy organization for journalists, in a statement Friday.
"Journalists are not the only ones who should be concerned with this issue,"
said Tatum, who is a business writer for the Denver Post. "Pretexting could be
used against disgruntled customers, employees or debtors."
HP's response that it was "dismayed" that phone records were hacked strikes
Tatum as insufficient: "This [pretexting] practice amounts to identity theft
and a national corporation should be held accountable."
Dunn, in an interview in the Wall Street Journal Friday, said that while she
ordered the investigation of board news leaks, she did not know the
investigators hired to conduct the probe used pretexting.
"I was appalled. And I'm going to apologize," to those journalists, she told
the Journal. Because she was also subject to investigation, she said she could
not have known what methods the investigators used.
But while she does not plan to resign, Dunn will take into consideration what
the board thinks she should do. "I serve entirely at the pleasure of the
board,'' Dunn told the Journal. "If they determine it no longer is in the
interest of shareholders [for me to remain on the board] I will do so.''
The criminal investigation of the case continues.
"There has been no final decision [on charges] but we are confident that a
crime was committed," said Lockyer spokesman Thomas Dressler. "The attorney
general does not want to sacrifice thoroughness for expediency. The
investigation could take a couple of months."
Charges could be filed under a California law prohibiting gaining unauthorized
access to computer data or under another law prohibiting identity theft through
unauthorized use of personal information, published reports say.
A bill to specifically outlaw pretexting is on Governor Arnold Schwarzenegger's
desk awaiting his signature. The governor has until the end of September to
sign or veto the bill, spokesman Darrel Ng told IDG News Service.
Schwarzenegger hasn't taken a position on the pretexting bill, but only because
it is one of hundreds of bills passed during the recently concluded session of
the California Legislature, Ng said.