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9/21/2006
08:10 PM
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HP To Break Silence As Heat Rises

"What began as an effort to prevent the leaks of confidential information from HP's boardroom ended up heading in directions that were never anticipated," CEO Mark Hurd said in a written announcement for a press conference scheduled after the market's close on Friday. "We plan to give as much clarity as we can to these matters."

With investigators increasing pressure, stocks sinking and headlines reading "Does This Surveillance Camera Make Me Look Fat?" Hewlett Packard executives plan to break their silence at a press conference after the markets close Friday.

Dozens of unflattering details have emerged about HP's spy scandal since executives last spoke about it.

The company's stocks fell 5.19 percent Thursday, after HP announced plans for a press conference but just before it reported that the U.S. Securities and Exchange Commission's enforcement arm had requested information about HP's media leak probe and the resignation of one of its board members.

"What began as an effort to prevent the leaks of confidential information from HP's boardroom ended up heading in directions that were never anticipated," CEO Mark Hurd said in a written announcement for Friday's press conference. "We plan to give as much clarity as we can to these matters."

Investors seemed to lose confidence Thursday after news reports cited an e-mail from Board President Patricia Dunn indicating to senior counsel Kevin Hunsaker that she planned to consult with Hurd about the methods of investigators. Investigators followed, photographed, tricked and lied to people in a spy operation that encompassed people inside of the company, journalists who covered it and some with tangential relations at best. Analysts had previously cited the CEO's lack of involvement and his record of strong leadership in their predictions that the company's stocks would weather the storm.

Press attention turned to Hurd the morning after Dunn accepted an award in San Francisco at the Bay Area Council's Hall of Fame and said she was eager to return to a more discreet life and joking that "it wouldn't hurt if the Pope continued to make controversial comments to grab the attention of the press." Dunn stayed clear of reporters during her Hall of Fame inauguration but said she looked forward to "setting the record straight."

HP stocks had continued to rise Wednesday, while news outlets reported that HP leaders had considered Watergate-like tactics, including sending spies into newsrooms by having them work as cleaners or clerks. The news outlets involved reported that it was unclear whether those discussions led to action. The New York Times also reported Wednesday that an e-mail it obtained showed "leading members of the team supervising the investigation knew of the methods at least as early as January and raised questions about their legality."

Media involved in HP's original probe described another e-mail in which a high-level employee asked how investigators had obtained people's personal phone records and whether it was legal.

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