Update: Calif. says it has evidence to charge HP officials

AG says people within HP and outside the company might face charges

A day after Hewlett-Packard Co. (HP) chairman Patricia Dunn promised to step down for her role in a boardroom scandal, the state of California is continuing to investigate the actions of HP officials and the private investigators they used.

The state now has enough evidence to indict people within HP as well as contractors outside the company, confirmed Thomas Dressler, a spokesman for California Attorney General Bill Lockyer.

In addition, the California attorney general is now working with Massachusetts officials to pursue the case, according to a spokeswoman for the Massachusetts attorney general's office.

In efforts to discover the source of press leaks about board deliberations, HP has acknowledged that it hired a private investigation firm to pose as suspected board members and journalists in order to convince the phone company to disclose private phone records. This is a practice known as pretexting.

HP announced yesterday that CEO Mark Hurd will replace Dunn on Jan. 18. In a published statement, Dunn apologized for the use of inappropriate investigative techniques but said those techniques "went beyond what we understood them to be." Dunn will remain on the board after stepping down as chairman.

In an interview on The NewsHour with Jim Lehrer, Lockyer said, "People's identity was taken falsely... People accessed computer records that have personal information. That's a crime in California." Dressler confirmed Lockyer's comments.

HP hired investigation firm Security Outsourcing Solutions Inc. (SOS), which shares its Boston offices with a law firm called Bonner, Kiernan, Trebach and Crociata, according to a report in The New York Times that cited sources close to the case.

Dressler declined to confirm the name of the security firm.

"Beyond what the attorney general said I'm not going to comment. It's not prudent for prosecutors to mention names before bringing charges," Dressler said.

The Massachusetts Attorney General's office confirmed that it is working with California, however.

"I can confirm that Massachusetts Attorney General Tom Reilly has been contacted by the California attorney general about the Hewlett-Packard matter and we are cooperating with them," said Meredith Baumann, a spokeswoman for Reilly.

She declined to explain why the investigation involved Massachusetts or to confirm the identity of SOS as the firm hired by HP to obtain phone records.

A call to SOS Wednesday was answered by a woman who recited the name of the law firm, but denied the two businesses were connected. She declined to give her name, and said that no one was immediately available for comment.

Ironically, an SOS newsletter posted on the firm's Web site warns corporate executives that their privacy is at risk since their Web surfing and e-mail records can be traced by Internet browsers and cookies. It advises clients to shield their identities by using a Web site called Anonymizer.com.

See more coverage:

  •  Hurd to replace Patricia Dunn as HP chairman in January

  •  HP says chairman has no plans to resign over leaks investigation

  •  HP: 'No Surprise'

  •  Opinion: A demand for immediate and full disclosure

  •  Reporters' phone records accessed by HP during leak probe

  •  California AG probing HP boardroom leaks

  •  SEC filing shows board infighting, leaks at HP

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Copyright © 2006 IDG Communications, Inc.

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