HP’s CEO goes before the press

Steve Tripoli Sep 22, 2006

KAI RYSSDAL: Until today we hadn’t heard much about the scandal surrounding Hewlett-Packard from the guy actually running the company. Mark Hurd is his name. He’s issued a statement or two about HP’s internal spying operation. But nothing from the horse’s mouth, so to speak, about what he knew and when he knew it.

Hurd went before reporters this afternoon to explain his role in the leak investigation. Marketplace’s Steve Tripoli has been following that story for us. Hi, Steve.


RYSSDAL: What did we learn today about Mark Hurd and his role in this whole thing?

TRIPOLI: Well, Mark Hurd went before the media today and said a bunch of things. First, he knew of the leaks investigations. Second, he approved a very specific part of an effort to uncover the leaks but, “I do not recall seeing, nor do I recall approving the use of tracer technology.” He knows there was a written report of the investigation that was meant for him, partly but “I did not read it. I could have and I should have.”

Also, HP’s Chairman and Director Patricia Dunn is out immediately. She was supposed to leave in January but she got the company’s thanks. He is taking over, Hurd is taking over as chairman, and a former U.S. prosecutor is being named as counsel. And then there was this apology:

MARK HURD: Some of the findings that Morgan Lewis has uncovered are very disturbing to me. On behalf of Hewlett-Packard, I extend my sincere apologies. We believe that these were isolated instances of impropriety and not indicative of how we conduct business at Hewlett-Packard.

TRIPOLI: You know, Kai, Hurd had pretty much escaped notice in connection with this mess. But that changed yesterday. The media got its hands on documents suggesting that he had approved at least one part of the spying operation. He may also have offered up names on possible spying targets, he may have been briefed about some of the efforts. He addressed all of that stuff today.

RYSSDAL: Right. And now he says he didn’t read that report — should’ve but didn’t. What does that say about his future at HP and about the company?

TRIPOLI: Well, you know, a lot changed yesterday for both. There was the first big drop in HP’s stock price — 5 percent — since all this news began breaking. So investors don’t like that. The stock broke about even today. As for Mark Hurd, he may be in trouble. Corporate damage control consultants are saying, “Oh, this really hurts his credibility.” If further revelations aren’t good and if the stock keeps sliding, well, investors aren’t going to be too thrilled about that. On the other hand, he is credited with rebuilding morale at HP prior to this. He is supposedly well-liked by employees and HP’s been a pretty good investment buy this year even with yesterday’s stock-price dip. So I guess the best answer is that the more we know about exactly what he knew and when he knew it, the more we’ll know about Mark Hurd’s future.

RYSSDAL: We’re going to find out more next week. He goes before a House committee to talk about this. He said today he’s volunteering. That, I imagine, is only so that the committee doesn’t actually ask him to appear.

TRIPOLI: Yeah, he offered to testify and I suspect he would have been invited, even if he hadn’t been, Kai. But, you know, it isn’t only the Congress he has dealings with. He has the Securities and Exchange Commission to deal with. The Attorney General of California is after more information; he says he has enough information to indict people inside and outside HP. Oh, and the Justice Department is also investigating. So, safe to say Mr. Hurd won’t be taking any time off in the coming days, Kai.

RYSSDAL: Alright, Steve Tripoli for us on the HP story. Thank you, Steve.

TRIPOLI: Take care, Kai.

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