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Former HP chairwoman cleared in ‘pretext’ case

Times Staff Writers

The state criminal case against former Hewlett-Packard Co. Chairwoman Patricia C. Dunn and three others -- involving a corporate spying scandal that led to congressional hearings and an enhanced state privacy law -- has ended with a whimper.

Dunn was cleared of all charges Wednesday by Santa Clara County Superior Court Judge Ray Cunningham. In explaining his decision, he said Dunn and the other defendants could have cited as a defense that they were acting on the advice of lawyers in zealously pursuing boardroom leaks, including accessing reporters’ personal phone records.

Cunningham also pointed to Dunn’s health as another reason for dismissing the charges against her, referring to her current battle with ovarian cancer.

Defendants Kevin T. Hunsaker, HP’s former ethics chief, and two private investigators, Ronald DeLia and Matthew Depante, each pleaded no contest to a single misdemeanor count of fraudulent wiretapping. But their records will be cleared if they each serve 96 hours of community service.

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The case was brought last year by former Atty. Gen. Bill Lockyer, now the state’s treasurer, before he was succeeded by Jerry Brown.

Cunningham’s ruling raises questions about how strong Lockyer’s case was to begin with, and whether prosecutors would have had trouble meeting the burden of proof required in a criminal case.

“The only way it could have been resolved more favorably would have been an outright dismissal and an apology from the attorney general,” said Los Angeles defense lawyer Jan L. Handzlik. “This prosecution was not designed to herald a new get-tough approach to protecting digital privacy, but rather to capitalize on the high-profile nature of the targets.”

But Lockyer spokesman Tom Dresslar said prosecutors acted in good faith. “We had a team of prosecutors with over 70 years of experience, who looked at this case and decided that the felony charges were appropriate,” he said.

Brown spokesman Nathan Barankin said his boss was satisfied with Cunningham’s decision. The attorney general’s office did say that Hunsaker, DeLia and Depante could potentially face federal charges. State officials previously dismissed a case against defendant Bryan Wagner after he pleaded guilty to federal charges.

The judge’s ruling ends a major chapter in the boardroom spying scandal that riveted Silicon Valley and besmirched the vaunted reputation of one of Silicon Valley’s iconic companies.

Private investigators trying to find out who was leaking confidential information to the media engaged in “pretexting,” in which they posed as reporters and board members online and on the telephone to gain access to their records.

Cunningham said “much public good” had resulted from publicity about the case, including federal and state laws making pretexting a criminal offense and $12 million in fines paid by the Palo Alto-based computer and printer maker.

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In the wake of the scandal, Dunn resigned in disgrace, as did several high-level executives.

In a statement, Dunn said: “I have always had faith that the truth would win out and justice would be served.”

Her lawyer, James Brosnahan, said Dunn had put the matter behind her.

“She doesn’t face anything else,” he said. “This is the end of the difficult time she has been put through. And that’s a good thing.”

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Initially, the attorney general’s office issued a news release saying that Dunn and her three codefendants had pleaded guilty to misdemeanors. But it quickly acknowledged the mistake and retracted the statement.

Cunningham announced his decision shortly before HP’s annual shareholders meeting in the ballroom of the Santa Clara Hyatt Regency hotel. Chief Executive Mark V. Hurd said he would not answer questions related to the development and referred to it only in general terms.

“Let me assure you,” Hurd said. “No one is proud of what happened last year. No one.”

Despite Hurd’s desire not to talk about the case, shareholders brought up the scandal, criticizing directors for letting it happen on their watch.

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“The board’s greatest contribution in 2006 was introducing the term ‘pretexting’ to the American lexicon,” said Scott Adams, pension organizer with the American Federation of State, County and Municipal Employees. The union backed an unsuccessful proposal to open up board member elections.

Joe Madison, a retired HP employee, said shareholders had lost confidence in the board. “Some of us see it as a private country club,” Madison said.

But after the meeting, several shareholders said they were pleased Dunn and the others would not face trial.

“I think it’s great,” said Shelton Ehrlich, a shareholder who lives in Palo Alto. “She didn’t do anything wrong.”

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michelle.quinn@latimes.com

marc.lifsher@latimes.com

Quinn reported from Santa Clara and Lifsher from Sacramento.


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