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Hewlett-Packard Chairwoman Resigns Amid Investigation Scandal

Hewlett-Packard Co.'s Chairwoman Patricia Dunn resigned Friday amid fallout from how she conducted an investigation into possible media leaks by board members. A journalist discusses the brewing scandal.

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  • MARGARET WARNER:

    On September 6th, computer and printer giant Hewlett-Packard made a stunning admission: Company management had hired private investigators to find out which directors were leaking boardroom information to reporters. In two probes beginning in 2005, investigators had impersonated HP directors and journalists to acquire their private phone records.

    Public attention this month initially focused on HP Chairman Patricia Dunn, who acknowledged that she had authorized the internal investigations. Dunn announced last week she would step down from her management post next January but would remain on the board.

    The scandal took a new turn yesterday when reports surfaced that HP CEO Mark Hurd may have had a bigger role than previously acknowledged. HP stock slid 5 percent yesterday on the news. So there was great anticipation when Hurd broke a two-week silence today with an off-camera press briefing at HP headquarters. There he announced that Dunn would resign immediately from both management and the board.

  • MARK HURD, CEO, Hewlett-Packard:

    On behalf of Hewlett-Packard, I extend my sincere apologies to those journalists who were investigated and to everyone who was impacted. We believe that these were isolated instances of impropriety and not indicative of how we conduct business at Hewlett-Packard.

    As we said from the start, the intent of the investigation was absolutely proper and appropriate. The fact that we had leaks on the board needed to be resolved, but the inappropriate techniques that were applied do not reflect the values of HP.

  • MARGARET WARNER:

    Meanwhile, California Attorney General Bill Lockyer, the Justice Department, and the Securities and Exchange Commission are investigating whether HP's tactics broke the law. A House subcommittee plans to hold hearings on the matter next week.

    As for his own role, Hurd said today that he had been briefed on the leaks investigations at various times. He also said he approved one technique, in which investigators sent a fake e-mail to a reporter. But Hurd indicated that he never approved anything he thought was illegal.

    And for more, I'm joined by David Kirkpatrick. He's been covering the story for Fortune magazine and was at today's press briefing, and he joins us now from Palo Alto, California.

    And, David, welcome.

  • DAVID KIRKPATRICK, Senior Editor, Fortune Magazine:

    Hi.