The latest board drama centers on an anonymous leak to News.com in January about the board’s meeting at a high-end spa in California. The leaked information was rather innocuous, with the source touching on general acquisition plans but not specific product or business initiatives.
But HP chairperson Patricia Dunn ordered an investigation into the leak, and at a board meeting in May, she fingered director George Keyworth as the source of the News.com leak and other past leaks. The board asked Keyworth, a physicist who was President Reagan’s science advisor for several years, to resign, but he refused.
The board’s attempt to remove Keyworth prompted fellow board member Tom Perkins, a venture capitalist and friend of Keyworth, to resign in protest at the very same meeting.
In HP’s SEC filing, the company said Perkins disagreed with the board’s handling of the Keyworth matter. In June, Perkins requested information from HP on its investigation into the leaks, and the company said it has used some form of ‘pretexting’ for phone record information, a technique used by investigators to obtain information by disguising their identity.
Pretexting is a name given to a type of social engineering attack where a hacker pretends to be somebody else in order to gather personal information about them. It can be used for malicious activities such as identity theft.
Perkins said he learned from AT&T that someone had fraudulently accessed his own phone records. In a letter from AT&T to Perkins, the carrier says that an unidentified person set up accounts at its web sites using Perkins personal information, in order to view his phone bills.
The company said somebody also called up AT&T’s customer care line, again pretending to be Perkins, to get help setting up the account.
In a sharply worded letter to the board, published on The Smoking Gun web site, Perkins accused HP of whitewashing its SEC filing announcing his resignation and not including any references to his protests over the leak investigation.
If directors of public companies resign over disagreements with the rest of the board, companies have to tell investors in SEC filings.
Perkins also said the company ignored his previous requests to appoint a special committee to look into the investigation.
HP did eventually appoint such a committee, which found that HP had hired an outside firm with investigation experience to look into the leaks, and that the firm had hired another party that had indeed used pretexting at times.
The outside counsel heading the inquiry found that the use of pretexting at the time of the investigation was not generally unlawful, according to yesterday’s filing.
But such counsel could not confirm that the techniques employed by the outside consulting firm and the party retained by that firm complied in all respects with applicable law, the filing stated.
HP said it would strengthen its oversight of such investigations in the future in accordance with the inquiry committee’s recommendations. The filing also stated that the California Attorney General is looking into the company’s investigations of the leaks, and that HP intends to cooperate fully.
As for Keyworth, the board last week decided not to nominate him for another term for his disclosure of confidential information, and he should be off the board by March of next year by the latest.
