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Report: Evidence suggests HP spied on Dell

Hewlett-Packard obtained 'confidential' material related to Dell's printing business, according to Fortune magazine, citing unnamed former HP employees.

update A magazine report published Tuesday indicates that Hewlett-Packard engaged in corporate espionage and spied on at least one of its own executives prior to the company's controversial probe into a boardroom leak last year.

Citing unnamed sources, Fortune magazine reported that "evidence suggests" HP obtained the phone records of Karl Kamb Jr., a former HP vice president, who is being sued by HP for allegedly stealing company trade secrets. The magazine said it also found information that supported some of the claims Kamb made in a countersuit filed in January: the company paid a former Dell executive to turn over some of his employer's trade secrets.

If true, the allegations would contradict HP's assertions that the leak hunt of last year, when its investigators duped phone company employees into turning over private records belonging to journalists and HP board members--a practice known as pretexting--was an isolated event. HP's probe into boardroom leaks led to the resignation of Patricia Dunn, HP's chairman.

Another potential risk to HP is that if the company knowingly obtained a competitor's trade secrets then it could be in violation of federal law. According to Fortune, the Economic Espionage Act bans the practice of obtaining a competitor's trade secrets.

In legal documents HP denied pretexting Kamb. On Tuesday, an HP spokesman declined to comment on the magazine story.

Dell said it is taking the allegations seriously. "We have requested a full and thorough investigation from HP," said Dell spokesman Bob Pearson. "We have not heard back."

Some of the new information that Fortune unearthed includes an invoice billed to Ron DeLia, a private investigator, that included a request for Kamb's address. DeLia was among those hired by HP to spy last year on board members, former employees and journalists, including three from CNET, to uncover an internal news leak.

According to the magazine story, in the summer of 2005, HP began suspecting Kamb of using the company's technology to help launch his own flat-panel business. In August of that year, Kamb's lawyer wrote a letter to HP saying that someone had tried to trick Kamb into handing over his cell phone pin number and had also tried to obtain records for his landline. Kamb suspected HP.

Kevin Hunsaker, HP's senior counsel and a key member of the probe into boardroom leaks, received the letter from Kamb's attorney. Hunsaker eventually left the company after the public learned about the potentially illegal methods used in the leak hunt. He also declined to answer questions posed to him by a congressional subcommittee last September. Hunsaker responded to Kamb's letter by denying HP was behind the attempts to grab Kamb's phone records.

But last August, just before the HP spying campaign was brought to light, Hunsaker was interviewed by attorneys with HP's outside law firm, Wilson Sonsini. They wrote in a report that "Hunsaker first learned that HP had used pretexting to obtain phone records in July 2005...Hunsaker's team told him they had not altered the subject's PIN or voicemail but had used pretexting to obtain phone information about the subject."

Fortune quoted an unidentified law enforcement official saying: "The circumstantial evidence is very strong."