Hewlett-Packard Officials Testify on Probe into Media Leaks

REP. GREG WALDEN (R), Oregon: Somewhere some adult should have stepped forward and said, "Stop this. This isn't right." Planting spies in newsrooms?

I have a journalism degree. I can't imagine in a newsroom having spies planted there to find out who might be leaking. Setting up e-mail spyware, tracking down who calls who from their private cell phone or their home phone?

This is not about law; this is about ethics and, I think, morality. I just find it horribly offensive and outrageous conduct.

KWAME HOLMAN: Ten witnesses involved in the HP investigation, including five private investigators, invoked their Fifth Amendment right not to testify.

ANN BASKINS, Former Gen. Counsel, Hewlett-Packard: Mr. Chairman, I do not have an opening statement.

KWAME HOLMAN: Among them was HP's general counsel, Ann Baskins, who resigned just before she was scheduled to appear at today's hearing.

ANN BASKINS: Mr. Chairman, I respectfully decline to answer, based on the rights and protections guaranteed to me by the Fifth Amendment of the Constitution of the United States.

KWAME HOLMAN: Former chairman Patricia Dunn, who resigned on Friday, said she was not aware that the tactics were illegal and relied on the judgments of HP's in-house and outside counsel and the private investigators.

PATRICIA DUNN, Former Chair, Hewlett-Packard: I requested and received assurance that the investigation was being performed in the HP standard way.

I am neither a lawyer nor an investigator. And in this matter, I relied on the expertise of people in whom I had full confidence, based upon their positions with the company and my years of experience in working with them. I deeply regret that so many people, including me, were badly let down by this reliance.

KWAME HOLMAN: Larry Sonsini, HP's outside lawyer, also appeared at the hearing and explained his role.

LARRY SONSINI, Attorney, Hewlett-Packard: When we were asked by the Hewlett-Packard board of directors to investigate the matter, we told the board that, although generally pretexting, except in the instance of financial institutions, was not specifically unlawful, we could not confirm that the methodologies used in the investigations were legal.

KWAME HOLMAN: Then, former HP Chairman Dunn came under pressure from both sides of the aisle, including from Illinois Democrat Jan Schakowsky.

REP. JAN SCHAKOWSKY (D), Illinois: I guess what I'm trying to get at in this line of questioning: Is all of this really the HP way? It's pretty well detailed out that, whether or not -- I'm not even talking about the legality issues so much as kind of the sleaze factor here. And I'm just wondering if none of this really came through to you over the period.

PATRICIA DUNN: I believe that these methods may, in fact, be quite common, not just at Hewlett-Packard, but at companies around the country. Every company has a security department. Every company of consequence has people who do detective-type work in order to ferret out the sources of nefarious activities.

REP. GREG WALDEN: You're going to tell us you never knew that they were going to use these techniques to spy on board members and impersonation of others? You just never knew?

PATRICIA DUNN: It is my sworn testimony that, until July of 2006, I was unaware that the fraudulent misrepresentation of identity was a part of the standard arsenal of HP tactics or used in this investigation.

KWAME HOLMAN: Republican Cliff Stearns of Florida pressed down on whether she would accept responsibility.

REP. CLIFF STEARNS (R), Florida: The question I want is -- yes or no -- do you think that you have any culpability in this whole fiasco? Just yes or no.

PATRICIA DUNN: I'll repeat what I said in my opening statement. I deeply regret that so many people...

REP. CLIFF STEARNS: No, that's what I don't understand. We're not talking about other people. We're talking about you personally.

PATRICIA DUNN: ... including me, that was in my opening statement. And I'd like to tell you what I'd do differently.

REP. CLIFF STEARNS: But knowing what you know today, it was wrong?

PATRICIA DUNN: Absolutely.

REP. CLIFF STEARNS: And knowing what you do today, that you have to accept responsibility. You have to accept personal responsibility for what happened; that's my interpretation of what you're telling me. Is that a correct interpretation?

PATRICIA DUNN: Sir, I do not accept personal responsibility for what happened.

REP. CLIFF STEARNS: OK.

PATRICIA DUNN: But I am very sorry for what happened.

REP. CLIFF STEARNS: OK, Mr. Chairman, I think she's basically saying she's not culpable here and she accepts no responsibility for what occurred.

KWAME HOLMAN: The final witness of the day was current Hewlett-Packard CEO and President Mark Hurd.

MARK HURD, President and CEO, Hewlett-Packard: The question remains: How did such an abuse of privacy occurred in a company renowned for its commitment to privacy? And it's an age-old story that the ends came to justify the means. The investigation team became so focused on finding the source of the leaks that they lost sight of the values of this company.

KWAME HOLMAN: Democrat Diana DeGette of Colorado wanted to know why, as a company leader, Hurd didn't see the numerous problems.

REP. DIANA DEGETTE (D), Colorado: I see all of these as red flags in the organization that were never caught by anybody at the CEO level on down. And I'm wondering if you can tell me how on Earth we had such a huge breakdown -- I mean...

MARK HURD: Congresswoman, I've seen a lot of stuff in my career.

REP. DIANA DEGETTE: So your answer would be, "Yes"?

MARK HURD: No, I think I've probably never seen anything like this. And there's two reasons, there's two ways processes break down. They break down because of bad processes that don't have checks and balances, and they break down because of poor execution. Those are the two ways; we broke down here in both.

REP. DIANA DEGETTE: OK, my question, though, is: You broke down in both, but there were red flags aplenty. Why was it that nobody in senior management of Hewlett-Packard caught any of these red flags?

MARK HURD: I'll speak for myself. I didn't catch them.

KWAME HOLMAN: The committee will have a second hearing on privacy concerns surrounding pretexting tomorrow, with executives of top communications companies.