DOJ looking into HP boardroom scandal

The company says it is cooperating with investigators

The U.S. Department of Justice is asking questions about conduct by Hewlett-Packard Co. that has embroiled the technology company in controversy.

HP acknowledged in a U.S. Securities and Exchange Commission (SEC) filing today that it is cooperating with an inquiry by the U.S. attorney for the Northern District of California into possibly illegal tactics used by investigators hired by HP to investigate news leaks from the company's board members.

HP described the U.S. attorney's inquiry as "informal" and said the questions are similar to those asked by the attorney general of California. "We are cooperating fully with these inquiries," HP said in its SEC filing.

The probes are looking into the use of "pretexting" to search phone records to determine which board members may have been talking to reporters. The phone records of nine reporters from various news organizations were also obtained to determine who their sources within HP for stories about the company might have been on.

Pretexting refers to posing as a phone company customer to get access to personal records. California Attorney General Bill Lockyer has said a crime was committed in connection with the pretexting, but his office is still investigating what crime and by whom.

The scandal has brought pressure on HP Chairman Patricia Dunn, who ordered the investigation but said she didn't know the outside investigative firm hired to trace the leaks would engage in pretexting. HP's board is meeting for the second straight day to discuss its response to the controversy.

Former HP Director Thomas Perkins, who quit in protest in May because of the way the investigation was conducted, called on Dunn to resign. His statement, released Saturday by his attorney, was prompted by Dunn's comments in interviews last week in which she alleged that it was Perkins who wanted "more aggressive measures" used to investigate the leaks, including use of lie detectors on board members.

"I am saddened, but not surprised, that Patricia Dunn has attacked me personally for doing my job. I acted not from any ill will toward Ms. Dunn but to protect the best interests of HP. I think the past months and days have shown that those interests are best served if Ms. Dunn would resign from the board," said Jenkins in his statement.

The Federal Communications Commission is also investigating HP. The FCC reportedly sent a "letter of inquiry" to AT&T Inc. asking how its customer phone records may have been accessed, according to an Associated Press report. An FCC spokesman could not confirm that.

HP's internal probe identified Director George Keyworth as the source for a CNet Networks Inc. story about HP's strategy that CNet posted on its technology news site in January. He refused to resign when asked to do so by Dunn in May, but the board has since voted not to renominate him to his seat.

Copyright © 2006 IDG Communications, Inc.

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