Dunn expected to launch vigorous defence

Patricia Dunn, who was last week ousted as chairman of Hewlett-Packard in an effort to contain the damage from a spiralling boardroom scandal, is on Thursday expected to launch a vigorous defence of her role in the company’s investigation into boardroom leaks.

Ms Dunn, who has borne the brunt of public criticism in the scandal, is expected to tesfity on Capitol Hill that she never considered herself the “supervisor” of the early stages of the company’s controversial mole hunt, and that she never “hired” investigators who were later found to have used legally questionable tactics.

In an appearance before members of the House Committee on Energy and Commerce, Ms Dunn is expected to say it was her assumption that Bob Wayman, HP’s chief financial officer and former acting chief executive, had authorised the company’s leak investigation.

“It was my assumption that Mr Wayman, having ultimate authority over all the resources involved in security and investigation, as well as having been one of the directors who felt most strongly about the importance of controlling leaks from the board, had provided authorisation for whatever work was undertaken,” she said in a prepared statement posted on Wednesday on the committee’s website. Her comments mark the first time that the long-standing CFO has been linked to the leak enquiry.

An HP spokesman challenged that view yesterday: “To the best of our knowledge, Bob Wayman had no involvement whatsoever in the leak investigation. Any assumption about Bob Wayman’s involvement made by Ms Dunn is nothing more than that; an assumption.”

Relevations that investigators working on behalf of Ms Dunn used potentially fraudulent tactics to uncover personal telephone records have prompted criminal investigations by state and federal authorities. The controversy spiralled last week after news reports indicated that HP’s investigation extended far beyond telephone records to include physical surveillance and other operations against HP employees, board members, journalists, and their families.

Ms Dunn repeated earlier statements that she had declined to make inquiries about the specific techniques being employed by the comapny’s investigators. However, she said she had been told that “phone records were one of the key techniques being used in the investigation, along with ‘relationship-mapping’ and what struck me as old-fashioned detective work.” She said she “did not find it objectionable that suspected leakers might be followed to see if they were meeting with reporters.”

In her prepared testimony, Ms Dunn also challenged the view that she had “hired” Ronald DeLia, a Boston-based private investigator, and others who helped carry out the leak investigation.

“I did not ‘hire’ the private investigators who were involved in the …investigations,” Ms Dunn said. “They were already under contract to HP when the leak investigation was initiated.” Ms Dunn said she had “initiated the investigation, in response to directors who urged me to take more serious action in response to leaks.”

Ms Dunn is expected to offer new details about the role played in the investigation by Mark Hurd, HP’s chief executive.

Questions about Mr Hurd’s involvement in the leak probe have taken centre stage following Ms Dunn’s departure. On Wednesday, Robert Ryan, an HP director, told Reuters that Mr Hurd continued to enjoy the full support of the company’s board.

However, concerns remain that Mr Hurd, who has led a resurgence at HP since he took over from Carly Fiorina last year, could come under pressure to leave the company if he is found to have played a bigger role in the scandal than has already been disclosed.

In her prepared testimony, Ms Dunn said Mr Hurd had attended “two or three meetings” related to the the second phase of the company’s leak investigation, dubbed ‘Kona II’, in which most of the questionable tactics were employed. However, she stressed that “neither Mr Hurd nor I designed or implemented the investigative techiques.”

Ms Dunn said a March report containing details of the probe, including its tactics, which was received but not read by Mr Hurd had “emphasised the lawful nature of the procedures” involved. She said a meeting between herself, Mr Hurd, Ann Baskins, HP’s general counsel, and Kevin Hunsaker, an HP employee charged with overseeing the probe, had “focused almost entirely on the conclusions of the [investigation] and not on its tactics.”

Ms Dunn’s timeline of events is in broad agreement with testimony expected to be offered by Mr Hurd on Thursday. According to prepared testimony, Mr Hurd is expected to say that he attended two meetings with investigators during 2006, when the most contentious portions of the company’s leak investigation took place.

Mr Hurd said the probe had degenerated into “an age-old story.”

“The ends came to justify the means. The investigation team became so focused on finding the source of the leaks that they lost sight of the values of the company,” he said.”

Mr Hurd said HP’s founders, Bill Hewlett and Dave Packard, would be “appalled” if they were still alive, and said that he had not “put himself above the breakdown that occured.”

Mr Hurd said he offered a “heartfelt apology” to those whose privacy was violated, and said HP would move immediately to strengthen the sections of its internal code of conduct that deal with privacy issues.

He said HP would provide victims of the investigation details of who obtained their personal information and how.