Hewlett-Packard Chairwoman Stepping Down

Computer maker Hewlett-Packard announces that Patricia Dunn will step down in January as the company's chairwoman. HP has been under growing scrutiny since revealing last week that it spied on its own board of directors, and journalists.

Copyright © 2006 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

STEVE INSKEEP, host:

The giant computer maker Hewlett-Packard announced today that Patricia Dunn will step down. She's been chairwoman of the company and she's leaving now in January. HP has been under growing scrutiny since revealing last week that it spied on its own board of directors and on journalists. The company's tactics have triggered criminal investigations.

And one of the reporters looking into the case, NPR's Scott Horsley. And Scott, of the various executives at HP, why would Patricia Dunn be the one to take the fall?

SCOTT HORSLEY:

Well, she was the chairwoman when the spying took place, although she says she didn't know all the details because she was one of the board members herself being spied on. This all goes back to last year when HP was very worried about leaks to the news media from its board members and it set out to find out which board member was talking.

In a statement this morning, Patricia Dunn said it was important for HP to stop the leaks, because they could have affected HP's stock price or the price of other companies. But she did apologize that during the course of the leak investigation, certain inappropriate tactics were used.

INSKEEP: Such as?

HORSLEY: Well, HP's contractor secretly obtained phone records both of its own board members and at least nine reporters through a shady process called pretexting. This is when an investigator calls or e-mails the phone company pretending to be a board member or a reporter in order to get that person's phone records.

When HP first revealed this last week, the company said the California attorney general's office was investigating. Since then, the company has been contacted by federal prosecutors. And just yesterday, the House Energy and Commerce Committee weighed in, demanding that HP answer some questions, like who did the pretexting and what did the company know about it.

INSKEEP: So from what you've learned, there's not evidence that phone calls were actually bugged, right? It's just a question of phone records here?

HORSLEY: That's right, but phone records can tell you an awful lot about who people were talking to.

INSKEEP: And then the next question is, is it illegal to get a look at somebody else's phone records?

HORSLEY: Well, California's attorney general, Bill Lockyer, says it's likely that laws were broken, in particular identity theft and computer hacking laws. Although it's not clear whether the responsibility lies only with the contractor who did the pretexting or HP itself. And that's gonna depend on what the company knew.

There are some companies that are out there that are known to be in the pretexting business. And one lawyer I spoke with says it's going to be interesting when HP reveals its contractor, whether the company was one of those.

INSKEEP: Lot of people as they listen to this story can look down at their desks and see a Hewlett-Packard machine there. Have things been going well for this company lately?

HORSLEY: Yeah, the company's been gaining market share. It's been boosting its profitability since Mark Hurd took over at CEO a year and a half ago. He will now add the chairman's title, although Patricia Dunn will stay on the board of directors.

INSKEEP: Okay. Thanks very much. That's NPR's Scott Horsley.

HORSLEY: My pleasure.

INSKEEP: Even as Patricia Dunn takes a step down, a CEO is taking a step out under pressure. Bristol-Meyers Squibb today ousted its chief executive in connection with his failed attempt to keep a generic version of the company's best selling drug off the market.

The drug is called Plavix. It's a blood thinner and it accounts for a third of Bristol's profits. The former CEO, Peter Dolan, negotiated an agreement with a Canadian drug company to delay the generic competing drug for several years, and that agreement is now under investigation by the Justice Department.

Copyright © 2006 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Support comes from: