HP's Hurd linked to leak probe scandal

HP CEO Mark Hurd has for the first time been linked to an elaborate sting operation of a CNET News.com reporter that lies at the heart of the company's attempts to determine the source of a boardroom leak.

Hurd approved an email ruse involving a CNET News.com reporter that involved planting a bogus news tip that, hopefully, would be followed up and lead back to an internal HP leak, according to an internal email sent by HP chairman Patricia Dunn, The Washington Post reported on its website on Wednesday night. It is unclear whether the investigation, which has generated numerous investigations and a flood of bad publicity over its ethics, broke any laws. But HP's probe has led to a criminal investigation by California's attorney general and a congressional hearing.

The Washington Post reported that none of the emails it reviewed was to or from Hurd but some mentioned his knowledge and approval of the scheme.

HP has come under fire for employing the legally questionable practice of "pretexting", or obtaining personal information under false pretences. HP has said the personal phone records of board members, two HP employees, nine journalists, including three CNET News.com reporters, and an unknown number of other people were accessed by investigators hired by the company to look into news leaks.

The firestorm of controversy led to HP's announcement last week that Dunn would step down as chairman in January and turn over that job to CEO Mark Hurd. Dunn will remain a director. Director George Keyworth resigned from the board. Venture capitalist Tom Perkins also quit the board earlier this year in protest at the investigation.

The operation detailed in the emails reported by the Post concerned CNET News.com reporter Dawn Kawamoto, who reported in January on a strategy meeting for directors and executives. Just days after that story was published, Kawamoto received an email from an HP insider posing as a tipster, government investigators have told Kawamoto.

A later email from that same address included an attachment believed to have contained marketing information about a new HP product. That attachment, government investigators told Kawamoto, is believed to have had the ability to track the email, notify the sender if it was opened, and tell the sender if the email was forwarded and to which IP address it had been forwarded.

People briefed on HP's review of its internal investigation say it was authorised by Dunn and put under the supervision of Kevin Hunsaker, a senior counsel who is the company's director of ethics, according to the Post.

In a 9 February email reviewed by the Post, Dunn told Hunsaker and general counsel Ann Baskins, "I spoke with Mark and he is on board with the plan" and "he also agrees that we should consider doing something with" the data-farm tip.

In another email cited by the Post, Hunsaker told Dunn on 23 February: "FYI, I spoke to Mark a few minutes ago and he is fine with both the concept and the content."

Kawamoto never wrote a story based on the bogus information but HP's surveillance continued in some manner at least through March, she was told.

However, the report by the Post does not cleanly match the emails that were received by the CNET News.com reporter.

The Post reported that the email described a "new handheld product" but the emails received by CNET News.com involved a purported rebranding of HP's so-called utility computing initiative for high-end corporate customers.

One email included an attachment with what appeared to be marketing material that tagged the name "Infinity" to HP's utility computing business. CNET News.com never reported on the apparent tip; HP later used the Infinity symbol for one of its server lines.

According to previous reports by CNET News.com, HP investigators also employed physical surveillance on Kawamoto for three days starting on 9 February, she was told. One note by the investigators said: "Morning of 10 February: surveillance resumed on DK and on other subjects." Included in the notes is at least one surveillance photo of Kawamoto.

California's attorney general Bill Lockyer said in a television interview last week his office believes it has enough information to bring charges against people both inside and outside HP. Charges could come within a week, according to a spokesman for Lockyer, although there is no set timetable.

The government's pretexting investigation should widen in the coming weeks.

A congressional subcommittee on Friday asked Dunn and Baskins to appear at a 28 September hearing about the company's surveillance methods. The House Committee on Energy and Commerce also sent letters asking HP outside counsel Larry Sonsini and outside investigator Ronald DeLia to testify as part of the daylong hearing.

The committee has received indications that Dunn and Baskins will testify but has yet to receive a formal confirmation letter. Sonsini also plans to testify but it's unclear how much he will be able to say, given that much of his work for HP may be covered by attorney-client privilege.

HP plans to hold a press conference in the San Francisco Bay Area on Friday after the stock market's 13:00(PDT) closing. An HP spokesman confirmed the event and said Hurd would be there but would not say who else would attend or comment further.

Steven Musil writes for CNET News.com