House Panel Digs Deep in HP Spy Case
Dunn, Hurd Shoulder Brunt of Tough Questioning at Hearing

By Yuki Noguchi and Ellen Nakashima
Washington Post Staff Writers
Friday, September 29, 2006

Lawmakers fiercely challenged former Hewlett-Packard Co. chairman Patricia C. Dunn yesterday on her assertion that she did not know about potentially illegal tactics used in the company's spy scandal, while 10 other key figures in the case shunned interrogation by refusing to testify during a congressional hearing.

A total of 14 witnesses, flanked by their lawyers, came before a phalanx of House subcommittee members. Most of the seven hours of questioning was directed at Dunn, who coolly endured accusations that she aided or condoned a widespread surveillance campaign against HP board of directors, journalists and their families.

Despite being confronted with a copy of a memo saying it was "probable" that Dunn had been informed that pretexting -- impersonating people to obtain information -- was necessary to acquire phone records, Dunn repeatedly said she was not aware of the methods investigators used to obtain personal calling records while investigating leaks to the media.

Chief executive Mark V. Hurd, furrowing his brow and peering over his reading glasses, assumed more responsibility while denying knowledge of possible illegal tactics. He admitted that his lack of involvement contributed to an investigation that overreached and damaged the company's reputation.

"This is not my finest hour," he said, adding later, "I should have caught it, I didn't."

The day began with the resignation of HP general counsel Ann O. Baskins, a 24-year veteran of HP who, hours before testimony started, became the sixth major HP executive or board member to resign since HP disclosed early this month that its investigators might have illegally obtained private phone records.

Lawmakers confronted Baskins with handwritten notes, apparently written by her during a phone call or meeting, suggesting that she had encouraged investigators to "[c]all carriers Nextel, Sprint and use pretexts to extract info."

"Now this document and others show that you were aware that HP was engaging in pretexting," said Edward Whitfield (R-Ky.), chairman of the House Energy and Commerce oversight investigations subcommittee.

Baskins declined to answer, citing her Fifth Amendment right against self-incrimination.

One by one, nine other HP employees and outside contractors also pleaded the Fifth Amendment, remaining silent after being confronted with the most vivid evidence suggesting they knew or should have known about the questionable surveillance activities. Those declining to testify included the main architects of the leak probe, HP's chief ethics director Kevin Hunsaker and global security head Anthony Gentilucci, and six private detectives.

The California attorney general and the FBI are conducting criminal investigations.

Later Dunn, Hurd, HP information technology security head Fred Adler and outside counsel Larry Sonsini sat somberly as subcommittee members chastised and interrupted them for presiding over a probe that led the venerable Silicon Valley company into such unethical behavior as sending bogus information to a reporter, sitting outside of journalists' and board members' homes and, most critically, impersonating people to obtain private phone records.

Taking turns, subcommittee members quoted from thick binders of internal documents and reports, and interrogated the panelists on what they knew and whether they still stood by their actions.

Dunn, who has resigned in the scandal, received or authored many of the e-mails. She acknowledged being party to briefings about the investigation but did not accept responsibility for the methods investigators used, saying she relied on guidance from Hunsaker, Baskins and Hurd. Dunn insisted she never approved the use of pretexting, saying, "I was unaware that the fraudulent misrepresentation of identity was a part of the standard arsenal of HP tactics or used in this investigation."

At one point, Rep. Diana DeGette (D-Colo.) said: "Ms. Dunn, you knew that a lot of these techniques were going on. You just didn't think it was your job to do anything about it."

Hurd, facing less confrontational questioning, called the investigators' methods "a rogue investigation that violated our own principles and values." He said he wished he had heeded signs that things were amiss, and added, "It will never happen again."

But subcommittee members said there were plenty of red flags in the case that should have made HP executives aware the company was entering unethical territory. In particular, HP executives approved sending false information to a News.com reporter, which contained an e-mail tracer that they hoped would lead them to the anonymous source quoted in her stories.

DeGette asked Dunn if she was at all concerned about the technique used in an operation to "sting" a reporter to trick her into revealing her source.

"I sent the team to management to get approval for their techniques," Dunn replied.

"Who was that in management?" DeGette said.

"Mr. Hurd," she said.

For his part, asked whether he knew about the monitoring of board members and their families, the monitoring of reporters and the phone pretexting, Hurd said no each time. He faced the sharpest questioning when it came to the e-mail ruse in which HP investigators made up a fictitious tipster named "Jacob."

DeGette asked Hurd if he thought it was "ethical for investigators to be coming up with a fake individual to be e-mailing reporters."

"Let me try to tell you what was going through my head," he began.

"Yes or no," she said.

Pressed to answer, he shook his head "no."

Dunn stood by her decision to investigate boardroom leaks, restating her position that it was necessary to protect company trade secrets and confidential deliberations. "I believe that these methods may be quite common, not just at Hewlett Packard, but at companies around the country," she said of corporate-sponsored investigations. "Every company of consequence has people who do detective-type work in order to ferret out the sources of nefarious activities." HP launched its effort to flush out who leaked boardroom secrets after a series of news stories appeared in early 2005, citing sources close to its board. Investigators' actions, which members of the subcommittee compared to B-grade movie scripts, have spawned both state and federal criminal probes.

Though most of the questioning was cutting, there were moments of levity.

Rep. Joe Barton (R-Tex.) said stealing phone records was theft. To underscore his point, he asked Dunn whether she would give him her phone records.

"In your position, I would give you my phone records," Dunn said after some hesitation, soliciting laughter from the standing-room only crowd.

"I wouldn't give you mine," Barton retorted.

When a committee member encouraged Hurd to call the House majority leader and endorse legislation outlawing the unauthorized access to phone records, Hurd responded, "You have my support." There are four such bills pending in the House and Senate.

In addition to Hunsaker and Gentilucci, both of whom resigned from HP this week, and Baskin, others pleading the Fifth Amendment yesterday were Ronald DeLia, managing director of outside investigator Security Outsourcing Solutions Inc.; Joseph DePante, owner of Action Research Group; and Bryan Wagner, Charles Kelly, Valerie Preston, Cassandra Selvage, Darren Brost, all private investigators and subcontractors to Action Research Group.