September 23, 2006
Developments at HP: Patricia Dunn Resigns and Mark Hurd Claims Ignorance
Posted by Gordon Smith

Earlier this week, I criticized HP Chairwoman Patricia Dunn for having a "very lean conception of accountability," and apparently I was not alone in thinking that she should go. On Friday, HP CEO Mark Hurd announced that Dunn had resigned, effective immediately.

Meanwhile, Hurd attempted to distance himself from reports that he was involved in the investigations. Hurd claimed that he wanted to be "as transparent as possible," but he didn't say much. He excused himself from saying more on the ground that it was a "complicated situation" and he didn't have all of the facts. In addition, Hurd announced that he would testify before the House Committee on Energy on Commerce next week, and he refused to answer questions before that testimony.

In his brief statement, Hurd again emphasized that violations of the HP Standards of Business Conduct justified the leak investigations, even though no one doubts that HP had a serious problem that needed to be addressed. This issue is not that HP conducted investigations, but that those investigations involved pretexting and perhaps other potentially illegal activities.

The big question now is, "What did Mark Hurd know about the investigations?" He cannot deny that he was updated on the status of the investigations because the emails show that conclusively. But exactly what did he know? In his prepared statement, Hurd attempted to walk a fine line with regard to the investigation of reporters, which I discussed here:

In, I believe, February 2006, I was informed by the investigation team that they intended to send an email containing false information in an effort to identify the source of the leaks.

I was asked to, and did approve the naming convention that was used in the content of that email. I do not recall seeing nor do I recall approving the use of tracer technology.

This does not make sense. What is the purpose of sending an "email containing false information" without a tracer?

As for his knowledge of the pretexting, Hurd implied that the first he heard of that part of the investigation was when HP's internal investigative team told him that they had identified the leaker. What about the written report produced by the investigative team, which would have alerted Hurd to the pretexting? Hurd claims, "I could have, and I should have" read the report.

Hurd's account of the facts seems too neat. He claims that he knew only about the legal stuff, even though the potentially illegal activity was right in front of him.

Friday's activities followed a familiar pattern for scandals: sacrifice someone (in this case, Patricia Dunn) and deny any knowledge of wrongdoing. Hurd also played the "accountability" card -- "I take full accountability to get this right" -- but he will have to be much more forthcoming next week if he wants us to believe that he was caught unawares.

In the end, Hurd finds himself in a very awkward position. Either he knew about the pretexting and plans to use tracer technology, or he was asleep on the watch. Neither portrayal is flattering, though the latter has the distinct advantage of not being criminal.

Listen to Hurd's press conference here.

UPDATE: More skepticism of Hurd from WaPo.

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