Calif. Investigates Legality of HP Probe

Hewlett-Packard Company's Patricia Dunn speaks during a news conference about new HP new CEO Mark Hurd at HP headquarters in Palo Alto, Calif., Wednesday, March 30, 2005. Dunn, one of the most powerful women in corporate America and the chairwoman of the 11th largest company on the Fortune 500. She oversaw the ouster of former HP CEO Carly Fiorina in February 2005 and the hiring of Mark Hurd as her successor. Now she may be the next one to leave the Palo Alto, Calif.-based company after overseeing an unusually invasive and legally questionable investigation into a media leak among the computer maker's board of directors. (AP Photo/Paul Sakuma) (Paul Sakuma - AP)

SAN FRANCISCO -- Revelations that Hewlett-Packard Co. officials used questionable tactics in an internal investigation into media leaks have caught the attention of California's attorney general, who's launched his own probe into the computer maker.

Attorney General Bill Lockyer subpoenaed some HP officials Wednesday in a probe he characterized as still being in the "early fact-finding stage."

Lockyer refused to say whether criminal charges would be filed against Chairwoman Patricia Dunn, other directors or the private investigators HP hired to find out who leaked confidential information to the media. He said the state also could charge HP with civil violations and order the company to pay fines.

"I don't have a settled view on whether it was illegal yet, but it certainly was colossally stupid," Lockyer said in a phone interview Wednesday.

HP disclosed in a filing Wednesday with the Securities and Exchange Commission that it sought the private telephone records of the company's board members in its leak investigation. Private investigators used the invasive and possibly illegal practice of "pretexting" _ posing as someone else to get personal information about that person.

HP said in the SEC filing that the company would decline to nominate one board member, George A. Keyworth II, for re-election because he was a source of the leaks. Keyworth, who has acknowledged leaking information, will be gone by March 2007.

The company also said lawyers hired to review its tactics could not determine if the investigation "complied in all respects with applicable law."

Experts say Dunn, who announced the firing of HP Chief Executive Carly Fiorina, may be the next to go.

"If the chairman thinks this is the way business ought to be conducted, maybe it's time for her to take a sabbatical," said Peter Morici, professor at the Professor Robert H. Smith School of Business at the University of Maryland. "It's arrogant and inappropriate."

Identity thieves use pretexting to steal social security numbers and other confidential information.

In this case, investigators hired by HP called the phone company and impersonated at least one board member to get logs of phone calls to and from his home, said the attorney of a former HP director.

HP said in the filing it would cooperate with the state probe and that no recording or eavesdropping of directors' phone conversations had occurred. Spokesman Ryan Donovan said the company would not provide other further details of the investigation. Dunn declined to comment.