Report: HP took PR firm's advice in Hurd scandal

Before announcing that Mark Hurd's tenure at the helm of Hewlett-Packard had reached its end, the company's board of directors reportedly sought the advice of a public relations firm on how best to grapple with sexual harassment allegations against its chairman and chief executive officer.

During a presentation conducted by an APCO Worldwide representative, board members were convinced the company would have to endure months of humiliation if news of the allegations leaked to the public, according to a New York Times report that cited a person briefed on the presentation. The Washington, D.C.-based public relations firm went so far as to create a mock newspaper story about the claims to illustrate its point, the Times reported.

The board ultimately took the firm's advice and decided to disclose the accusations against Hurd, as well as report claims Hurd had falsified expense reports, the newspaper reported. Those revelations led to Hurd's resignation on Friday as top executive of the world's largest technology company by revenue.

Representatives for HP and APCO Worldwide did not immediately respond to requests for comment.

The company revealed during a conference call Friday that Hurd had had a "close, personal relationship" with a female contractor for two years between the fall of 2007 and 2009 that he did not disclose to the board of directors. Outside investigators hired by HP's board also found that Hurd had turned in inaccurate expense reports, reportedly in the range of $1,000 to $20,000. The board concluded that while Hurd had not violated the company's sexual harassment policy, his conduct "exhibited a profound lack of judgment" and insisted Hurd resign.

The resignation took effect immediately. He was replaced by Chief Financial Officer Cathie Lesjak, who will act in an interim capacity.

However, the board did not completely escape criticism for its decision, including an "impassioned" e-mail from Oracle Chief Executive Officer Larry Ellison to sent the Times on Monday that decried the board's decision.

"The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago," Ellison said in the e-mail. "That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them."

"In losing Mark Hurd, the HP board failed to act in the best interest of HP's employees, shareholders, customers and partners...The HP board admits that it fully investigated the sexual harassment claims against Mark and found them to be utterly false," according to the e-mail to the Times.

The female contractor, salesperson and sometimes actress Jodie Fisher, came forward Sunday to express sadness that her claims led to his resignation and to say that the two never had a sexual relationship. Hurd reportedly settled the harassment claim with Fisher for an undisclosed amount of money.