Congress Wades Into HP Probe

A Congressional committee on Monday asked Hewlett-Packard Co. to turn over records related to the company's possibly-illegal investigation of media leaks, as the company's board planned to meet again to discuss the fate of embattled Chairwoman Patricia Dunn.

The request came as part of the U.S. House Energy and Commerce Committee's ongoing investigation into "pretexting" — the practice of impersonating a person in order to access their personal information.

HP hired private investigators who used Social Security numbers and other personal information to impersonate HP directors and journalists. The impostors then tricked phone companies into turning over detailed logs of their home and cellular phone calls.

Federal prosecutors and the FBI also entered the fray Monday. The U.S. Attorney's Office for the Northern District of California issued a statement saying it was "investigating the processes employed in an investigation into possible sources of leaks."

The Palo Alto-based maker of computers and printers said in a regulatory filing it was cooperating fully with the federal inquiry, along with an investigation by the California State Attorney General's Office, which requested similar information.

An HP spokesman had no further comment.

Hewlett-Packard's board adjourned an emergency phone conference Sunday without announcing whether it would oust Dunn for her role in the investigation that may have used illegal means to spy on colleagues and journalists. The board was scheduled to reconvene late Monday afternoon.

Dunn's resignation now seems likely, said Roger Kay, who follows HP as president of Endpoint Technologies Associates, a market research firm. "The right thing to do now is for her to step down, clear the air and let the company carry on," he said.

Dunn, a former freelance journalist who has become one of the most powerful women in corporate America, ordered the outside investigation of fellow board members to determine who anonymously leaked information, especially as it related to the job status of former chief executive Carly Fiorina.

Although a common tactic among private investigators, pretexting tests the bounds of California law. State Attorney General Bill Lockyer has said the investigation violated two state laws related to identity theft and illegal access to computer records. It's still unclear, however, whether the company or anyone acting on its behalf will face civil or criminal charges.

A spokesman for Lockyer had no comment Monday.

A federal investigation further complicates the situation for HP, experts said.

"It opens the company to more scrutiny on a broader and more powerful level," said Ken Sukhia, a former U.S. Attorney in Tallahassee, Fla.

Martin Reynolds, vice president of the research firm Gartner Inc., said it may be more likely that criminal charges are filed against the private investigator, rather than Dunn or another HP board member. The company has not revealed the name of the investigator it used.

That may be one reason investors have largely ignored the scandal. HP shares rose 27 cents Monday to close at $36.36 on the New York Stock Exchange, near the top end of its 52-week range of $25.53 to $36.73.

"It's a good thing they're not trying to close a difficult merger or negotiate for a new CEO right now," Reynolds said. "But the business of HP and the leadership there is strong enough that this is just not an issue. It's certainly embarrassing, and it's obviously not the best press, but the good news is this is pretty much divorced from the day-to-day operations of HP."

The Federal Communications Commission has also taken interest in the HP investigation, asking AT&T Inc. last week how the company's private investigators managed to obtain the private phone records of board members and journalists.

Following the investigation, board member George Keyworth II was identified as the source of the leak, and HP responded by barring him from seeking re-election.

Another HP director, longtime Silicon Valley venture capitalist Tom Perkins, resigned from the board in May in protest of the investigators' tactics.

Perkins this weekend called on Dunn to resign.

Dunn told The Associated Press last week she would resign if asked, but said several fellow board members had urged her to remain on the job despite the criminal investigation. She also said the media leaks were an "egregious breach" of the company's standards and that the board of directors fully backed an investigation to root out the source.

The nine reporters whose phone records were compromised are Pui-Wing Tam and George Anders of The Wall Street Journal; Peter Burrows, Ben Elgin and Roger Crockett of BusinessWeek; John Markoff of The New York Times; and Dawn Kawamoto, Tom Krazit and Stephen Shankland of CNET Networks Inc.'s News.com.

Investigators hired by HP also targeted Thomas Shankland, a semiretired geophysicist in Los Alamos, N.M. who is Stephen Shankland's father.

Keyworth, the board member who will not be renominated, was the former science adviser to President Reagan and director of the Physics Division at Los Alamos National Laboratory, which he joined in 1968. Keyworth has acknowledged leaking information to reporters.

The younger Shankland is married to Associated Press reporter Rachel Konrad, who has also covered HP.