Hurd Approved E-Mail Ruse, Expresses Regrets

In a press conference at Hewlett Packard's Palo Alto, Calif. headquarters, Hurd expressed regret for the tactics used in the investigation of HP board members, employees and journalists. He said the investigation team told him in February of their plans to send an e-mail containing bogus information in order to determine the source of the leaks.

"I was asked to, and did approve the naming convention that was used in the content of that email," Hurd said.

Hurd also acknowledged that he did not read a report describing the tactics used by the investigation team that was sent to him in March. "I could have, and I should have," he said.

At the press conference, Hurd also announced that HP Chairwoman Patricia Dunn " who was in charge of the investigation — has resigned effectively immediately, and said he'll take over her position.

After the first phase of the investigation was launched in January 2005 and failed to identify the source of the leaks, investigators launched a second phase in January 2006 in response to further leaks. It was during this second phase that the investigative improprieties occurred, according to Hurd.

"In the second phase, while many of the right processes were in place, they unfortunately broke down and no one in the management chain, including me, caught them," Hurd said. "On behalf of HP, I extend my sincere apologies to those journalists who were investigated and everyone who was impacted."

Mike Holston, a partner with law firm Morgan Lewis, which Hurd hired on Sept. 8 to review the tactics used during the investigation, acknowledged that these included "pretexting," or using false information and social security numbers, to gain access to telephone and fax information; sending e-mails with attached tracing mechanisms; and physical surveillance of an HP board member and at least one journalist.

Despite the controversy, HP channel partners didn't seem concerned about any potential damage to the company's image.

Carl Wolfston, director at Headlands Associates, a Pleasanton, Calif.-based solution provider, said he's sorry to see Dunn leave. "She did a great job," he said.

Wolfston doesn't see much chance that the scandal will directly impact Hurd. "He should make it through," he said.

Geoffrey Lilien, CEO of Lilien Systems, Larkspur, Calif., doesn't think the tactics used in the investigation are a big deal. "People are obsessed with any sniff of impropriety," Lilien said.

Lilien doesn't expect the controversy to have much impact on HP solution providers. "For the channel, it's not an issue at all. It's just a news story. There will be some fallout from it, especially in the legal system. But things get blown out of proportion," Lilien added.

HP executives, citing Hurd's planned appearance before the House Energy and Commerce Committee next week, didn't allow questions.