US: Hewlett-Packard Settles Spying Case

SAN FRANCISCO - Hewlett-Packard
has agreed to a financial settlement with The New York Times and three
BusinessWeek magazine journalists in connection with the company's
spying scandal that stemmed from surreptitiously obtaining private
phone records.

The parties to the dispute declined to
disclose the amount of the settlement, which was reached privately and
not as a result of a lawsuit.

The settlement brings to a close
one of a few unresolved aspects of a spying scandal that tarnished
Hewlett-Packard and brought down its chairwoman, Patricia C. Dunn, and several high-ranking executives.

trace what Ms. Dunn and others considered disloyal and risky leaks from
the company's board, H.P. retained investigators who engaged in a
wide-ranging investigation in 2006. The inquiry involved "pretexting,"
a practice that had someone pretending to be someone else to obtain
private records from phone companies.

Phone records compromised
included those of the three BusinessWeek staff members - Ben Elgin,
Peter Burrows and Roger Crockett - and the family phone records of The
New York Times reporter, John Markoff, and his wife, Leslie Terzian

"What H.P. did was an affront to the free press," said
Terry Gross, a San Francisco lawyer who represented the reporters for
BusinessWeek, part of the Mc-Graw-Hill Companies, their families and
The New York Times. "They didn't like what reporters were writing, and
they broke into their private telephone accounts to identify who their
sources were."

In a written statement, Hewlett-Packard said it was pleased to have resolved the matter.

the company agreed to settle a lawsuit by the California attorney
general, paying $14.5 million in fines and promising to change its
corporate governance practices.

News organizations have
customarily been hesitant about pursuing financial settlements with
companies or people they write about, wanting to avoid the perception
that coverage could be tied to compensation.

In a statement, The
New York Times said it pursued a claim against Hewlett-Packard in part
to send the message that "corporate misconduct aimed at silencing the
press is not acceptable and will not be tolerated." The Times pursued
the claim on Mr. Markoff's behalf, and he did not individually seek

The Times donated its money from the settlement to
groups including the Center for Investigative Reporting and the
Investigative Journalism Program at the journalism school of the
University of California, Berkeley.

Mr. Gross said the BusinessWeek reporters also planned to give some of their settlement money to charity.

company still faces five lawsuits brought by other journalists and
their families, who assert that Hewlett-Packard used pretexting to
illegally obtain their phone records. Those cases, filed together in
August 2007 in San Francisco Superior Court, are pending, the
plaintiffs' lawyer, Kevin Boyle, indicated.

Two reporters for The
Wall Street Journal were also targets of Hewlett-Packard investigators,
but The Journal has said it will not take part in legal action or
settlement talks.

AMP Section Name:Corruption

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