September 20, 2006
The HP Scandal: What Did Patricia Dunn Know?
Posted by Gordon Smith

We do not know all of the details underlying the sordid leak investigations at HP, but Patricia Dunn has acknowledged that "responsibility and accountability to investigate and deal with the leak issue lay firmly with me as chairman of the board." Dunn initiated the internal investigations, and according to a report today in the W$J, she received emails describing the progress of the investigations. If you have been following this closely, you might remember that Dunn claimed that she was not involved in the investigations because she was one of the subjects.

None of these emails mentioned pretexting, though the practice was discussed by others within HP and might have been raised in a management briefing. Moreover, according to Newsweek, Dunn  admitted that "she was aware HP was obtaining the phone records of suspected leakers as long ago as 2005. But she says she didn't know about the pretexting until late June, when she saw an e-mail to Perkins from HP's outside counsel, Larry Sonsini." So she knew that the investigators had obtained phone records, but she didn't consider the possibility of pretexting? How, I wonder, did she think they came by those records? Wouldn't you ask about that, if you were "responsible and accountable" for the investigation? Consider the following from the NYT:

Concern over legality was reflected in an e-mail message sent on Jan. 30 by Mr. Hunsaker, the chief ethics officer, to Mr. Gentilucci, the manager of global investigations. Referring to a private detective in the Boston area, Ronald R. DeLia, whom the company had hired, he asked: "How does Ron get cell and home phone records? Is it all above board?"

Mr. Gentilucci responded that Mr. DeLia, the owner of Security Outsourcing Solutions, had investigators "call operators under some ruse."

He also wrote: “I think it is on the edge, but above board. We use pretext interviews on a number of investigations to extract information and/or make covert purchases of stolen property, in a sense, all undercover operations.”

Mr. Hunsaker’s e-mail response, in its entirety, said: “I shouldn’t have asked....”

It is unclear who, if anyone, in the company was then briefed on what he had been told. People who have seen other material from Hewlett-Packard’s investigation said that Mr. Hunsaker, in supervising the operation, communicated frequently with Ms. Dunn, the chairwoman, about its progress. But they said it was not clear when Ms. Dunn, who ordered the investigation, learned of the methods used.

So how has Patricia Dunn responded to the botched investigations, which she calls "appalling" and "embarrassing"? She will step down as Chairman of HP in January, but she will remain on the board of directors. That's a very lean conception of accountability.

P.S. Here is another interesting tidbit from the NYT story: "The two phases — each begun after accounts of board members’ discussions appeared in news articles — were code-named Kona I and Kona II, according to several people who saw the company’s investigative records. The names are intriguing; Ms. Dunn’s vacation home is in Kona, Hawaii." Vanity naming, reminiscent of Enron.

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