Hurd: 'I wish I had asked more questions'
- 29 September, 2006 13:41
After watching Patricia Dunn, Hewlett-Packard's former chairwoman, field questions from an angry U.S. House of Representatives subcommittee for most of Thursday, HP CEO Mark Hurd finally got his chance to testify, reiterating that he should have done more to stop a boardroom leak investigation that has snowballed into a scandal for the company.
"I'm not putting myself above the breakdown that has occurred," said Hurd, who began his testimony before members of the U.S. House Energy and Commerce Committee just after 4 p.m. "I wish I had asked more questions.
"Mistakes will happen. What matters, ultimately, is how a company addresses its mistakes," he said.
Hurd was quickly grilled on what he knew about the company's efforts to plug boardroom looks, when he knew it and what he missed along the way as the investigation mushroomed. In sharp questions from Rep. Diana DeGette, Hurd was asked about written documents -- including a draft of an investigation report sent to him last March -- that he has already acknowledged that he did not read.
"There were red flags aplenty," said an incredulous DeGette, who wanted to know why no one at HP saw them.
"I didn't catch them," said Hurd, who claimed that there was breakdown in control over how things unfolded at HP. But he also said that "the CEO cannot be the backstop for every process in the company."
Earlier in the day, Dunn had come in for her own round of sharp questioning, and at one point, Rep. Clifford Stearns compared the company's actions with those taken at Enron. Stearns had also warned Dunn that acting under a "cloak of cover" -- where officials talk to their legal staff and believe they are acting under sound advice -- wouldn't hold legal water.
"You must take personal responsibility," Stearns told Dunn early in the day.
In his response to questions, Hurd repeatedly said that he should have been more diligent and that his failure to read the draft report was "not my finest hour." While Hurd said he is accountable for everything sent to him, he added that "I pick my spots where I dive for details."
Questioned about a fake e-mail from a fictitious character named Jacob that was designed to be sent to a reporter, Hurd said he agreed with the content of the e-mail but was unaware of any tracing technology attached it. "With the benefit of hindsight, I wouldn't do it again," he said.
He also repeatedly stressed at almost every opportunity his desire to find out everything that happened and make sure something like this never happened again.
Page BreakThe bulk of the day's testimony was taken up with questions for Dunn, who resigned from the board last week. Throughout the day, Dunn repeatedly told House members that she did not know of any illegal activity being used to gather information about the leaks. And she said she relied on HP's legal team to keep on top of the probe.
"I had no reason to think anything illegal was going on," Dunn said at one point during her testimony.
Although Hurd was asked about some of the documents handed over to the committee voluntarily by the company ahead of Thursday's hearing, the focus Thursday was clearly on Dunn and her assertion that she wasn't aware of the methods used to get telephone numbers until July of this year.
After Dunn had left the hearing following several hours of testimony and Hurd took the hot seat, Rep. Ed Whitfield, the subcommittee chairman, said, "There was all sorts of evidence that she knew about pretexting early on."
The issue of "pretexting" -- where someone pretends to be someone else to gain access to their telephone records -- was a central issue in Dunn's appearance before the committee. Although Hurd didn't escape those questions about specific documents related to the practice and who at HP may have known about it, he wasn't grilled about them in anywhere near the detail Dunn was.
By the time it was his turn to testify, less than half of the committee was in attendance, and after those still in the room asked their questions, most of them left. By 5:30 p.m., when the hearing ended, only three committee members were on hand.
Although Dunn and Hurd were the highlight witnesses before the committee, a number of people who had been subpoenaed to testify chose to invoke their Fifth Amendment rights. That group included former HP General Counsel Ann Baskins, whose resignation was announced early Thursday.
HP faces several state and federal investigations over its efforts to plug boardroom leaks by hiring an outside company that used pretexting to access the phone records of board members and nine journalists.