HP's top lawyer leaves, won't testify

Ann Baskins, who spent most of her career there, was implicated in the leak investigation scandal.

Margaret Kane
Margaret Kane Former Staff writer, CNET News
Margaret is a former news editor for CNET News, based in the Boston bureau.
3 min read
Hewlett-Packard General Counsel Ann Baskins has resigned, the company announced Thursday.

Baskins, as advised by her lawyers, also declined to testify before a U.S. House of Representatives subcommittee that met on Thursday to investigate an HP probe into leaks to the media. Baskins invoked her constitutional protection under the Fifth Amendment, which gives someone facing criminal prosecution the right to remain silent. A number of other former HP employees and contractors also refused to testify.

Ann Baskins Ann Baskins

Baskins, who spent much of her legal career with the company, also served as secretary for its board of directors. She has come under scrutiny for her role in HP's leak investigation, which allegedly involved "pretexting," or using fraudulent means to obtain someone else's personal records.

"She has admirably supported our business needs across the globe and will be missed," CEO Mark Hurd said Thursday in a statement regarding Baskins. "Stepping down was a very hard decision for her, but by doing so, she has put the interests of HP above her own, and that is to be commended."

As part of an agreement with the HP board, Baskins retains the right to exercise outstanding options (with a value of $3,658,807, vested on Sept. 28) to purchase 465,858 HP shares, according an HP filing with the U.S. Securities and Exchange Commission on Thursday.

Additionally, Baskins will be able to exercise other, yet unvested, stock options by Nov. 22. The vesting of these options will be accelerated and they will have a value of $1 million, according to the regulatory filing. Baskins will also retain the balance of her 401(k) plan, as well as her vested rights under qualified HP retirement plans and under an HP excess benefit plan.

Former HP Chairman Patricia Dunn, who is at the center of the HP board room scandal, in testimony on Capitol Hill Thursday declined to say whether Baskins' compensation was proper. "She was a 26-year employee of HP," Dunn said. "She bled HP blue ink. I'm sorry to say her career is ruined. She made some errors in judgment."

HP has acknowledged that it accessed phone records of board members and journalists, including three CNET News.com reporters, as part of its leak probe. The company has also followed reporters and tried to trace e-mails in an effort to track down the source of leaks from the board of directors.

The scandal has already cost the jobs of Chairman Patricia Dunn and two other employees.

Baskins has hired two well-known attorneys, K. Lee Blalack of O'Melveny & Myers and Cristina Arguedas of Arguedas, Cassman & Headley.

Blalack represented Enron's former chief executive before House and Senate investigations of the company's bankruptcy and was a former chief counsel to a Senate investigations subcommittee. Arguedas, who specializes in criminal defense, has been named by California Lawyer Magazine as the attorney other attorneys would hire if they got arrested.

The letter written on behalf of Baskins said that if their client could testify, "the subcommittee would recognize that she acted legally and ethically at all times...given the current environment, however, Ms. Baskins simply has no choice" but to remain silent.

Both the California attorney general and the U.S. Attorney's Office in San Francisco have said they are conducting criminal investigations into HP's use of pretexting, though no charges have been filed.

CNET News.com's Declan McCullagh, Anne Broache, Joris Evers and Ina Fried contributed to this report.