Between the Lines Of HP's Spy Scandal

"What began as a proper and serious inquiry into leaks to the press of company information from within the HP board became a rogue investigation that violated our own principles and values," he added. "There is no excuse for this aberration. It happened; it will never happen again."

The scandal brings to the fore questions of privacy that affect thousands of Americans whose phone or bank records have been fraudulently obtained by data brokers who sell the information to investigators. What catapulted this to the headlines was the fact that this time, it was a Fortune 100 company seeking the personal data

Not only did investigators lie to obtain phone call records, they also conducted extensive background checks of reporters, directors, their spouses and children; plotted to plant spies in newsrooms; discussed the possibility of inspecting trash; and planned a ruse to trick a reporter into revealing her source by planting a tracer in an e-mail sent by a fictitious HP tipster.

"What happened here was like cutting off your head to kill a head cold," said Charles M. Elson, chairman of the University of Delaware's John L. Weinberg Center for Corporate Governance.

The purpose of today's hearings, lawmakers and aides said, is to lay bare what happened, find out who committed or knew about any acts that were illegal or unethical, and to push Congress to pass pending legislation that could prevent much of this from happening again.

"For the highest-ranking officials of a company like Hewlett-Packard to be aware of and seemingly approve this kind of activity I do not think speaks well of their value system or their culture," said subcommittee chairman Edward Whitfield (R-Ky.).

The scandal seems curious, considering how Hewlett-Packard, founded in 1938, spent decades building an image as an ethical company devoted to civic responsibility and the welfare of its employees. HP codified its philosophy of respecting individuals, encouraging teamwork and promoting openness as it tried to fashion useful products. Called "the HP Way," its corporate philosophy became a legend in Silicon Valley.

In his statement, Hurd admitted that the probe had fallen afoul of the "HP Way." He outlined steps taken to correct mistakes, including accepting Dunn's resignation. Two others involved in the investigation, Hunsaker and Gentilucci, have also left the company. Hurd said existing ethical practices will be reviewed and new measures developed to protect information privacy.

He, too, distanced himself from the investigation's operation: "I was apprised of the existence of the investigation by Ms. Dunn, but I was not involved in the investigation itself."

Both the FBI and the California attorney general's office are investigating the case, and California Attorney General Bill Lockyer has said he has enough evidence to bring criminal charges against people inside and outside the firm. Documents delivered to Congress detailed one exchange between HP investigators that suggested they knew they were pushing the bounds of the law.

In a Jan. 30 e-mail, Hunsaker asked Gentilucci how HP's private investigator was obtaining phone records. "Is it all above board?" he asked.

Gentilucci replied that the investigator, DeLia, used " some ruse" to trick phone operators. "I think it's on the edge, but above board," he wrote.

Hunsaker's reply: "I shouldn't have asked."

Staff writer Yuki Noguchi and staff researcher Richard Drezen contributed to this report.