September 28th, 2006
HP's lawyers deservedly take the fall
While everyone involved in HP's out of control quest to staunch board leaks is culpable for moments of stupidity or at least poor judgement, the lawyers deserve special note. This morning, prior to testifying before a U.S. House of Representatives subcommittee, General Counsel Ann Baskins has resigned. Kevin Hunsaker, HP's senior counsel and director of ethics resigned yesterday. These resignations can be simply explained–the legal division failed to provide good advice, not just legal advice but practical and ethical advice. Pretexting and spying on reporters may be legal in some corners of the world, but it will tend to blow up in your face if the methods are exposed. Remember Watergate, and how it slowly but surely tainted an entire administration?
While HP board Chairwoman Patricia Dunn has been the focus of attention and was essentially thrown off the board in stages, first as chairwoman and then off the board altogether, she was either ignoring legal advice or getting bad advice. I tend to think it was the latter.
How Chairman and CEO Mark Hurd thought it was OK to send a fake email to one of our reporters as a way to ferret out the leaker is a question he will have to answer today. What was he thinking when he made that decision, and why didn't legal counsel step in and say that wasn't a good idea, or at least avoid the meetings so you can plead ignorance.
This whole rogue operation could lead to his impeachment, just as Richard Nixon was forced out of office. It's an unlikely outcome, however. Hurd's crime appears to be bad judgement, rather than any explicit criminal behavior, and as we have seen, the lawyers are taking the fall. Whatever the case, today's testimony before elected officials in Washington D.C. will have an impact on his future employment. With Hurd being viewed as HP's savior over the last 18 months due to the company's financial turnaround, the forces of Wall Street patrolling the Beltway will use their influence to keep the CEO from taking a hard fall. You can expect a polite Q&A as Congress spends its precious time on a tawdry boardroom scandal.
See also: News Focus: HP's leak probe.
Dan Farber, editor-in-chief of CNET News.com, has more than 20 years of experience as an editor and journalist covering technology. See his full profile and disclosure of his industry affiliations.
