California's attorney general on Wednesday filed felony charges against former Hewlett-Packard Co Chairman Patricia Dunn and four others for spying on journalists and the company's own board of directors and executives.
"One of our state's most venerable corporate institutions lost its way as its board sought to find out who leaked confidential company information to the press," California Attorney General Bill Lockyer told reporters. "In this misguided effort, people both inside and outside of HP violated privacy rights and broke state laws."
The scandal around the cloak-and-dagger hunt for a boardroom leak that resorted to identity theft has rocked the Silicon Valley icon, but Lockyer said there currently was no evidence of criminal conduct by Chief Executive Mark Hurd.
However, the investigation remains open, Lockyer and his deputy said in the state capital Sacramento after filing the charges in Santa Clara County Superior Court in San Jose.
"We haven't cleared anyone at this point," said Robert Anderson, chief deputy attorney general. Anderson declined to say whether approving the sending of an e-mail with a falsified name aimed at deceiving a journalist - something Hurd has acknowledged - could constitute potential criminal behaviour.
Dunn resigned last month over her role in the scandal that has tarnished the reputation of a firm that that in the past has championed privacy and aspired to live up to a code they called the "HP Way". In the firm's probes in 2005 and 2006 investigators impersonated company board members, employees and journalists to obtain their telephone records.
"These charges are being brought against the wrong person at the wrong time and for the wrong reasons," Dunn's attorney, Jim Brosnahan, said in a statement. "They are the culmination of a well-financed and highly orchestrated disinformation campaign."
Her camp also said Dunn would begin treatment this week for recurrent ovarian cancer. Lockyer, a Democratic candidate for state treasurer in November, wished her a speedy recovery.
Congress called Dunn, Hurd and others to testify, berating the leadership last week for violating privacy of journalists who covered the company, HP employees and directors.
All five defendants named on Wednesday face four felony charges: conspiracy; fraudulent use of wire, radio or television transmissions; taking, copying and using computer data; and using personal identifying information without authorisation. Each count could bring a maximum of three years in jail as well as monetary fines.
Also charged are former HP ethics officer Kevin Hunsaker and investigators Bryan Wagner, Ronald Delia and Matthew DePante of information supplier Action Research Group.
"I'm innocent of these charges," Delia said. I've been a professional private investigator for more than 30 years. I respect the law and I did not break the law in the HP investigation." Lawyers for the others did not return calls.
Chief deputy attorney general Anderson declined to comment on whether former Chief Executive Carly Fiorina was under investigation. Hewlett-Packard in a statement said it continued to cooperate with state and federal investigations.
Hurd has promised to get to the bottom of what he called a "rogue" investigation, but investors happy with the performance of the printer and computer maker since he took over have paid less attention since concluding his job was not at risk.
In fact, HP shares rose on Wednesday, closing up 60 cents or 1.6 percent at $38.02 on the New York Stock Exchange. They are up about 33 percent so far this year.
"I get zero calls from investors on this. I only get calls from reporters," said Brent Bracelin, an analyst at Pacific Crest Securities. Dunn has said she regrets the way the probe was handled, but does not take personal responsibility for any deceptive methods used.
The felony complaint in part says Dunn gave private investigator Delia the home, mobile and office telephone numbers for HP board members, and that Delia later told her that he had obtained the telephone records "by ruse" from the phone companies.
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