Calif. AG files charges against HP's Dunn, others in leak scandal

Her lawyer said she'll 'fight these charges with everything she has'

Calling it a case of "gravity and importance," California Attorney General Bill Lockyer late today said felony charges have been filed against former Hewlett-Packard Co. Chairman Patricia Dunn, a former HP legal counsel and three private investigators for their roles in the company's boardroom leak scandal.

"One of our state's most venerable corporate institutions lost its way, as its board sought to find out who leaked confidential company information to the press," Lockyer said in a statement. "In this misguided effort, people inside and outside HP violated privacy rights and broke state law. On behalf of Californians, who cherish privacy so much they enshrined the right in our state Constitution, those who crossed the legal line must be held accountable."

Dunn's attorney, Jim Brosnahan of Morrison & Foerster LLP in San Francisco, quickly counterattacked, issuing a statement late today calling the charges false.

Brosnahan said Dunn "will fight these charges with everything she has."

"These charges are being brought against the wrong person at the wrong time and for the wrong reasons," said Brosnahan. "They are the culmination of a well-financed and highly orchestrated disinformation campaign."

Reports that charges would be filed began circulating this afternoon.

Dunn faces the same set of felony charges as the others charged today, which all relate to the use of pretexting. The state's complaint said "false and fraudulent pretenses" were used to obtain phone billing records from telephone carriers of 12 people, including journalists, HP board members and HP employees.

In addition to Dunn, the state is charging Kevin T. Hunsaker, former in-house lawyer and ethics chief at HP; Ronald R. DeLia, managing director of security outsourcing solutions, an HP security contractor; Matthew Depante, manager of Action Research Group, a company described by the state as an "information broker"; and Bryan C. Wagner, a Colorado-based employee of the research group.

The state moved quickly in bringing charges. It was only early last month that details about the boardroom leak investigation emerged publicly after HP disclosed it in a filing with the U.S. Securities and Exchange Commission. An uproar soon followed over the company's efforts to plug the leaks, culminating in a daylong, packed hearing last week before a subcommittee of the U.S. House Committee on Energy and Commerce.

The criminal complaint, filed in Santa Clara County Superior Court, charges Dunn and the others with four felony counts, including fraudulent wire communication; using personal identifying information of another to obtain credit, goods or services in the other person's name; wrongful use of computer data; and conspiracy.

Mark Hurd, HP's CEO and now board chairman, knew about the investigations into the boardroom leaks. But Hurd, who was hired in April 2005 after the investigations had already begun, has explained his role and knowledge of this investigation as largely peripheral. At the congressional hearing, it was Dunn, not Hurd, who testified the longest and endured grueling, skeptical and accusatory questioning from committee members, who used dozens of documents, e-mails and notes as the basis for their questions.

Throughout, Dunn denied any wrongdoing and said she was unaware of the practices of the investigators and believed HP's legal staff wasn't stepping out of bounds in investigating the law.

In a statement late this afternoon about the indictments, HP said "it is continuing to cooperate with state and federal investigators looking into the boardroom leaks issue. The company has no further comment."

One bit of information disclosed in the complaint concerned a visit by an investigator to Wagner, one of the people implicated today by the state. When investigators arrived at his house, Wagner greeted a special agent with a classic detective novel line: "I was wondering when you guys would show up." 

Copyright © 2006 IDG Communications, Inc.

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