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Friday, September 22, 2006

Partial Transcript Comments from H-P's Mark Hurd on the Recent Scandal

We listened in to part of the Hewlett-Packard (HPQ) conference call today regarding the ongoing scandal that the company has been entangled in over pre-texting and illegal spying and monitoring. This was Mark Hurd's first public comments and he does take responsibility without admitting he knew the entire scope of this. The resignation of Patricia Dunn, chairman, was accepted and effective immediately. He will be testifying next week in DC.

Please pardon the lack of quotes as we wanted to get this out:

Mark Hurd, CEO, and Mike Holston, a lawyer from Morgan Lewis, discussed H-P’s recent situation over illegal monitoring and spying. Mark Hurd’s offer to testify was taken up, so he will be testifying in DC next week.

They did not want to take questions.

He wants to be as transparent and as accurate as possible.

This has nothing to do w/ strategy of HP or most of its people.

He hasn’t communicated earlier because it is complicated. “We still do not have all the facts” and can’t guarantee that they will be able to ever get all of the information.”

They have a basic understanding of what happened.

There has been a history of leaks that was a violation of company policy. Hurd feels strongly that leaks hurt the company and the chairman pursued this course of action.

There were 2 phases, the first yielded nothing. The second phase broke down and no one caught it…including Hurd.

HP’s chairman asked in 2006 and he said he was told in FEB 2006 about doing a false leak. He does not recall approving “treasury technology”.

He understands a written report was made and he did not read it, he could have and should have according to him.

After the May board meeting he read an email 3 weeks later saying there was more needed. He went into it further investigation on SEPT 8 and he intends to go further into it. Some of the findings that Morgan Lewis has found are severely disturbing and he apologized to journalists and those affected. He says this is not a H-P normal doing and these actions don’t reflect the values of HP.

They accepted Patricia Dunn’s resignation today effective immediately. Bart Schwartz, a former prosecutor has been appointed to develop a going forward policy.

He said this went a direction that was not intended. He said that the people impacted do not deserve what happened and Hurd assumes full responsibility for whatever happened. He said he volunteered to share the info of what he knows in DC next week.

MIKE HOLSTON of MORGAN LEWIS:

The investigation is not complete and more has to be done.

He said he was hired September 8.

The Morgan Lewis firm is now handling ALL inquiries regarding this.

They have collected over 1 million pages of documents ( I think).

Morgan Lewis said a number of employees and related people were involved in this action. That is in pre-texting, monitoring of a journalist, and the board leaker.

Patricia Dunn contacted Security Outsourcing Solutions “SOS,” and Kona One was brought in to this as well. They think Mrs Dunn and several others were at the meeting. He said mark Hurd briefly attended this. He went on to Kona Two…………..(connection lost)

Our connection to the call was interrupted and we will try to get the rest later.

Have a great weekend.

Jon C. Ogg
September 22, 2006
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