Silicon Valley Icon Tainted

One of America's leading businesswomen, Hewlett-Packard chairwoman Patricia Dunn, announced her resignation today and acknowledged that she authorized an investigation that has plunged her company into turmoil.

Her rise to the top of American business began in the typing pool, and her fall began with her attempt to stop leaks to the news media that came from her own boardroom.

While it's legal for companies to monitor the e-mails and phone calls employees make when they are on the job, HP may have relied on deception. To uncover the source of the leaks, the company hired investigators who allegedly impersonated board members to obtain personal records.

"I'm appalled, and I'm appalled because HP is not an ordinary company," said Silicon Valley analyst Paul Saffo. "It's an icon here in Silicon Valley. And once upon a time, it stood for something."

"Board members got spied on. And their phone records got pried loose without their knowledge," Wall Street Journal reporter Joann Lublin said.

Dunn apologized today, saying the investigation "included certain inappropriate techniques" that the company said would not be employed again.

But private investigators say they should never have been used in the first place.

"One of … our standard rules is, if you get information that you can't use because the methodology you used to obtain it is too revolting to a judge or jury, then don't do it," private investigator Terry Lenzner said.

Dunn's defense today was that she was unaware of what the investigators were doing.

That excuse doesn't wash with Saffo.

"She set these events in motion. She is responsible for how these turned out, whether she specifically knew something was wrong or not," he said.

The widening scandal deals a major blow to the reputation of HP, a company that once was admired as a model of integrity, innovation and progressive management.

"The HP name remains, but the HP culture we all knew and respected is long gone," Saffo said.

Dunn steps down from her post as chairman in January, but the company said she will stay on as a member of the board.

The real irony here may be that the entire investigation may have been unnecessary.

When the source of the leak was confronted, he reportedly said, "I would have told you all about this. Why didn't you just ask?"

Now the high-tech company's troubles may just be beginning as the FBI, the Justice Department, and the U.S. Attorney's Office in San Francisco start questioning the tactics used in this corporate investigation.