Hurd Tells Congress HP Way Can Be Restored

By Staff Report

Sep. 29, 2006

It took more than seven hours before a congressional hearing on spying by Hewlett-Packard got around to a discussion about the impact of the scandal on employees.

A day that featured 10 former HP executives and security consultants exercising their constitutional right to decline to testify and the relentless grilling of former HP chairwoman Patricia Dunn concluded with a query from Rep. Michael Burgess, R-Texas, about the company’s outreach to its workers.

“We’ve made an effort to communicate with them as often as possible,” HP chief executive Mark Hurd replied to Burgess, whose district includes an HP facility. “We’ve communicated with them about our governance changes and the issues around the investigation.”

Hurd was the last witness in a hearing of a House Energy and Commerce subcommittee on September 28 that lasted from 10 a.m. until nearly 6 p.m. The panel delved into the unfolding drama surrounding HP’s efforts to ferret out boardroom press leaks about company strategy.

The investigation involved HP’s obtaining phone records and other personal information about board members, journalists and its own staff through clandestine methods, including the use of false identities, or “pretexting.”

Even as HP tries to recover, lingering concerns about corporate spying may become an issue for employers.

“Every company in America is examining itself to see if it has the same kind of problem,” says Nell Minow, editor of the Corporate Library, an independent research firm in Arlington, Virginia, that specializes in corporate governance.

Congress may also take up the issue. “This gives us a good opportunity to open the window on some of the practices going on in companies around the country,” said Rep. Diana DeGette, D-Colorado.

HP, which has built a reputation as an exemplar of ethical corporate behavior, may now find itself lumped with other rogue companies, according to Rep. Tammy Baldwin, D-Wisconsin.

Enron and WorldCom shook American’s confidence in the finance and accounting arena. “HP is shattering their expectation of telecom privacy,” Baldwin said during the hearing.

The company’s employees may have similar concerns, which could even outweigh the fretting about damage to HP’s brand. “It’s not the reputation issue; it’s the paranoia issue,” Minow says.

House members on both sides of the aisle spent the first hour and 15 minutes of the hearing castigating the company with variations on the same theme: What were you thinking?

Hurd apologized for HP’s behavior and said that he is ultimately “responsible for everything that goes on at Hewlett-Packard.”

Although he admitted to approving the content of a bogus e-mail to a journalist, which was intended to monitor her sources, Hurd said that he ignored the scope and tactics of the investigation.

In part, he blamed the demands of running a huge company. “A CEO cannot be the backstop for every process in the company,” he said. “I pick my spots when I dive for details. There’s no excuse for that.”

But at the end–perhaps because the questioners were exhausted after working over Dunn and others–Hurd was both unbloodied and unbowed.

“We are committed to our core to redefine our company in a way that not only we can be proud of, but in a way that all corporations in America can be proud of,” he said.

Mark Schoeff Jr.


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