HP Settles Spying Case With N.Y. Times, BusinessWeek Reporters

Hewlett-Packard has reached a financial agreement with The New York Times and three BusinessWeek reporters who accused the tech company of secretly obtaining private phone records, the newspaper reported Thursday. Financial terms were not disclosed.

The agreement was the result of private negotiations between the parties and did not stem from a lawsuit, The New York Times reported. The deal stemmed from last year's spying scandal in which HP hired investigators to try to identify the people responsible for leaks from the company's board. The investigation involved a practice called "pretexting," which is when a person poses as someone else in order to obtain private records from telephone companies.

The scandal led to the resignation of board chairwoman Patricia C. Dunn and several high-ranking executives.

The phone records obtained during HP's inquiry included those of BusinessWeek staff members Ben Elgin, Peter Burrows, and Roger Crockett, and the family phone records of New York Times reporter John Markoff and his wife, Leslie Terzian Markoff.

"What HP did was an affront to the free press," Terry Gross, the San Francisco lawyer who represented the Times and the reporters, told the newspaper. "They didn't like what reporters were writing, and they broke into their private telephone accounts to identify who their sources were."

HP said in a written statement to the newspaper that it was happy to resolve the matter.

The New York Times said in a statement that it pursued the matter against HP because "corporate misconduct aimed at silencing the press is not acceptable and will not be tolerated." Markoff did not seek compensation on his own.

The newspaper donated its settlement money to groups including the Center for Investigative Reporting and the Investigative Journalism Program at the University of California, Berkeley. Gross said the BusinessWeek reporters also planned to give some of their settlement money to charities.

Still pending against HP in the scandal are lawsuits filed last August by three journalists with CNET's News.com, an Associated Press reporter, and a family member of one of the CNET reporters. The suits allege invasion of privacy, intentional infliction of emotional distress, and violation of California fair business rules.

The actions of HP board members and the contracted investigators led to congressional hearings about pretexting. California launched a state investigation, but later dropped it in a $14.5 million settlement with HP.