Hurd addresses press: Dunn resigns

HP holds a press conference to offer details on the company's boardroom scandal and leadership changes.

PALO ALTO, Calif.--Hewlett-Packard's CEO Mark Hurd addressed issues surrounding the company's probe into journalists and its board members as part of an investigation into leaks to the media. Mike Holston, a lawyer with Morgan Lewis, followed Hurd to the podium. Below is a record of live updates as the press conference took place. Click here for post conference coverage.

1:38--The press conference ends.

1:37--"We have not seen evidence of any wiretapping; we have not seen any evidence that computer keystrokes were tapped. We do not have any information to support the contention that any surveillance operation at WSJ or CNET ever occurred," Holston says.

1:36--On surveillance, investigators did watch over the board member to an event in Boulder, Colo., as well as at his home. In February 2006, investigators watched a journalist at her residence. Investigators may have conducted a search of individuals' trash.

1:35--On the tracer--frequently used by businesses to gain information on people who visit their Web sites: In January 2006, the investigation team created a fictitious e-mail account and used that account to send an e-mail to the reporter to see if the journalist would forward it to her source. The investigation team never received any confirmation that the tracer was ever activated. The contents of the e-mail message and the type of e-mail was approved by Mark Hurd, but we found no evidence that he approved the tracer.

1:34--"We have information that SSNs were used for 3 journalists, 3 current or former board members and 1 HP employee--later an additional journalist," Holston says.

1:33--Morgan Lewis has uncovered one instance where a member of HP provided a SSN of an HP employee to Security Outsourcing Solutions, the company HP hired to conduct the investigation. In January, SOS obtained SSNs through Action Research Group, a contractor, we believe to have obtained telephone records through pretexting.

1:32--Holston says HP fully intends to provide each person with detailed information about the information on them. Information on hundreds of telephone calls was obtained through pretexting for two current HP employees, 7 current or former HP board members and their family members and 9 journalists. To the best of his knowlege, Holston says this was done through an external investigator.

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1:31--Holston lists some of the methods used during the Kona 2 investigation. First, obtaining telephone and facsimile call information using pretexting. Second, use of Social Security numbers to obtain phone call information to pretexting. Third, sending an e-mail that had a tracing mechanism to trace the e-mail. Fourth, physical surveillance.

1:31--Holston says HP will not disclose the identity of individuals being investigated.

1:30--During the course of Kona 2, certain members of the investigation team provided assurances that the techniques used in the investigation were legal. The report identified the source of the leaking and outlined the techniques used, including pretexting. Results were reported at a May 18 board meeting.

1:29--Kona 1 concluded in summer of 2005 without identifying the leak. Investigation started again in January 2006 after a CNET story was posted.

1:28--Holston says investigation into the board involved two phases Kona 1 and Kona 2. "It is now clear that the investigation included tactics including the review of internal HP e-mail and instant messages to the physical surveillance of one HP board member and at least one journalist, to the pretexting."

1:27--HP has collected more than a million pages of documents in the last two weeks, including internal HP documents and third-party documents.

1:26--Hurd's speech ends, and he declines to take questions. Mike Holston, a lawyer with Morgan Lewis, takes the podium.

1:24--Hurd says, "Now we know the depth of what has transpired I take full accountability to get this right. Our job is to fix this and get back to the job of running the business. I volunteered to share what I know with the Committee of Energy and Commerce next week."

1:23--HP has accepted the resignation of Chairman and Director Patricia Dunn, effective immediately. Hurd has been appointed to the addional position of chairman. Bart M. Schwartz has been appointed at counsel.

1:22--He believes that these were isolated incidents of impropriety. The fact that HP had leaks on the board needed to be resolved.

1:21--He says he believes HP now has a substantial set of the facts, and although there may be others, he is confident they have a good understanding of what transpired.

1:20--Hurd says he doesn't recall seeing and doesn't recall approving the use of tracing technology.

1:18--Hurd says he does not yet have all the facts.

1:04--The event is being held in a conference room of the main building at the company's headquarters. On stage is a podium with an HP logo and a single additional chair.

Hurd's speech will be delayed by about 15 minutes, according to a spokesperson.

 

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