The HP Saga: The Buck Stops Where?

29 Sep ’06

The first reports of Patricia and Mark’s Excellent Adventures at the House Energy and Commerce Committee are now in and the overall impression is one of sonorous bloviation by the pol’s and no surprises from HP.

Dunn didn’t supervise anything, told the Board about everything, assumed everything was aboveboard, had no idea what was going on below and didn’t ask, saw the word “pretexting” used in memos but assumed it was accepted and legal practice. Hurd missed warning flags, internal controls broke down and the investigation went rogue. He bears ultimate responsibility – indeed the “buck stops” with him – but like everyone else with whom the buck stops, it actually stops a few rungs below. By all accounts, Hurd’s presentation was contrition theatre, and went over well with committee members.

One is left with the distinct impression of senior executives who made a concerted and skilled effort to keep what they thought was a tawdry and must have suspected was an improper and possibly illegal investigation at arms’ length – an effort that is turning out to have been just enough to save them, toast a few others, and have more or less no effect on the stock price. Indeed, one of the stranger moments of the day was Larry Sonsini telling Committee members that the law isn’t as clear as it needs to be (if you had made the law clearer, we wouldn’t have been seduced into such improper behaviour – ?). Yes, perhaps, but lecturing on the law when most people wonder at the lack of moral compass is, to many, besides the point.

Perhaps the closest the Committee came to news was noted by CNet:

Rep. Greg Walden, R-Oregon, presented Dunn with an e-mail from the day earlier in which Dunn asks DeLia to reschedule a meeting to June 15 so Baskins could be included. In earlier testimony, before Walden presented the e-mail, Dunn said, “I do not recall being in that meeting.”

On further questioning, Dunn said that she may have seen the word pretexting, but didn’t know it equated to fraudulent misrepresentation. “The word pretext does show up in documents I had seen,” Dunn said.

Walden repeatedly asked Dunn how she thought HP was getting the phone records. “My understanding was these records were publicly available,” she said, later adding, “I understood that you could call up and get phone records” because she thought it was a common investigative technique.

Walden expressed skepticism, asking Dunn if she really believed that. “I thought a year ago, I thought six months ago, that indeed you could,” she said.

“You’re serious?” Walden said. “I’m not being funny here. You honestly believed it was that simple?”

He also presented Dunn with documents from a later Wilson Sonsini inquiry that had DeLia and others saying that Dunn was aware of the techniques being used. Dunn said the word “pretexting” may have been used, but that she did not understand that meant fraudulent misrepresentation.

“No one ever described to me that the fraudulent use of identity was part of the HP way of conducting investigations,” Dunn said.

Dunn, who is apparently unfamiliar with the literal meaning of the word “pretext”, happily did not spend too much time at HP waiting for someone to describe to her “that the fraudulent use of identity was part of the HP way of conducting investigations”; but it’s certainly nice to know now that waiting for this kind of warning was her standard for supervision.

More coverage: NYT and WSJ.

Update: The NYT rounds out the day’s coverage by turning the HP investigation report into a cross between a psychodrama and a whodunnit.

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