Lawmakers Compare HP Saga To Enron

Ousted HP Chairwoman Patricia Dunn, center, is seated with her attorney James Brosnahan, right, before the start of the House Energy and Commerce Committee hearing on Capitol Hill in Washington Thursday, Sept. 28, 2006.
The saga of Hewlett-Packard Co.'s spying scandal — which has toppled the company's chairwoman, two other directors and at least two high-ranking executives — deepened in intrigue Thursday as lawmakers exploring the imbroglio summoned comparisons to Watergate and Enron.

Members of the House Energy and Commerce Committee demanded to know how investigators for the respected Silicon Valley anchor could use tawdry tactics such as "pretexting," or impersonating other people to obtain their phone records.

In one key document cited by the panel, an HP investigator had warned higher-ups, including the company's now-fired chief ethics officer, that the methods used to find the source of boardroom leaks were possibly illegal and at the very least could damage the company's reputation.

But few answers emerged. Ten people involved in the cloak-and-dagger operation — including the former ethics officer and General Counsel Ann Baskins, who resigned Thursday — asserted their Fifth Amendment right against self-incrimination, refusing to answer questions.

Former Chairwoman Patricia Dunn, who stepped aside last week as the scandal showed no signs of abating, told the panel that she had been assured that phone records had been obtained lawfully from public sources — and in previous investigations by the company on other matters.

"I deeply regret that so many people, including me, were let down by this reliance" on such advice, Dunn told the panel.

Dunn stumbled at turns and corrected herself when asked how much she knew of the shady tactics, including when she learned that the investigators had used pretexting to obtain telephone records. While saying she was unaware of the details, she repeatedly defended the probe as necessary to stem serious leaks of confidential information.

"My recollection was incomplete; I haven't seen all the evidence here," she said at one point. She said it wasn't until July that she became aware that pretexting was part of the "standard arsenal" of the investigators' tactics.

"I dispute having ever understood or being told that the fraudulent use of identity was ever a part of this investigation," Dunn insisted. She noted that she was "pretexted" as well; the probe targeted every member of the board, HP investigator Fred Adler testified.

The panel also heard from CEO Mark Hurd, who apologized for the investigatory tactics when he replaced Dunn as chair last week but denied having direct knowledge of the probe's methods.

"If Bill Hewlett and Dave Packard were alive today, they'd be appalled," he said, referring to the company's revered founders.

In addition to masquerading as HP directors, employees and as reporters to obtain their telephone records, company investigators surveilled their subjects and their relatives, sifted through their garbage and sent an e-mail with tracing technology in an attempt to dupe one reporter.

In testimony prepared for Thursday's hearing, Hurd said Dunn had told him of the existence of the investigation, "but I was not involved in the investigation itself."

"How did such an abuse of privacy occur in a company renowned for its commitment to privacy? It's an age-old story. The ends came to justify the means," his prepared testimony said.

Lawmakers on the committee expressed outrage at HP's actions.

"We have before us witnesses from Hewlett-Packard to discuss a plumbers operation that would make Richard Nixon blush were he still alive," Democratic Rep. John Dingell of Michigan said.