HP settles spy case

Published Feb 15, 2008

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Hewlett-Packard on Thursday announced a settlement with Business Week and New York Times reporters on whom the computer maker spied during a hunt for a boardroom leak.

"The matter has been resolved to the mutual satisfaction of the parties, and we're pleased to put this matter behind us," the Palo Alto, California, computer and technology company said in response to an AFP inquiry.

"HP also is pleased that the journalists decided to donate all or some portion of the settlement to charity, although HP was not consulted about the charities selected."

Details of the settlement were not disclosed.

Investigators working for HP used "fraud and deceit" to obtain personal telephone records of news reporters and HP board members, according to prosecutors who filed criminal charges in the case.

The espionage scandal that broke in 2006 battered the image of the world's largest computer maker and resulted in criminal charges against two HP executives and three outside security agents hired by the firm.

Federal prosecutors said an HP probe into a boardroom leak grew into a conspiracy to use "pretexting," or impersonation, to get personal information of news reporters at CNET, The Wall Street Journal, The New York Times, and Business Week.

The settlement finalised on Wednesday does not resolve separate lawsuits filed by other news reporters whose phone records were tapped into as part of the HP probe.

Last year, HP paid $14,5-million to settle civil charges brought by California state officials.

HP chairperson Patricia Dunn and former ethics lawyer Kevin Hunsaker resigned from HP amid the controversy about unethical and potentially illegal tactics used to expose a board member who had been leaking secrets to news reporters.

Dunn was among HP executives grilled by incredulous members of US Congress at a hearing in Washington. She repeatedly denied endorsing any wrongdoing.

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