She led a possibly illegal effort to spy on board members SAN FRANCISCO -- Hewlett-Packard ... HP's chairwoman under scruti

SAN FRANCISCO -- Hewlett-Packard Chairwoman Patricia Dunn is under scrutiny from business and ethics experts after she oversaw an invasive and possibly illegal effort to snoop into the home phone calls of fellow HP board members.

Dunn, a former freelance journalist who has become one of the most powerful women in corporate America, oversaw the ouster of former HP CEO Carly Fiorina in February 2005 and the hiring of Mark Hurd as her successor. Now analysts say she might be the next to leave.

HP disclosed in a filing Wednesday with the Securities and Exchange Commission that the company sought the private telephone records of board members in a bid to determine which director leaked confidential company information to the media.

In the SEC filing, the company said it would decline to nominate one board member, George Keyworth II, for re-election because he was a source of the leaks. Keyworth, who has acknowledged leaking information, will end his service on the HP board no later than March.

HP also revealed that lawyers hired to review its tactics could not determine whether the investigation "complied in all respects with applicable law," the company said in the filing.

California's attorney general subpoenaed some HP officials Wednesday and is examining the tactics of the investigation, which relied on a data-mining method known as "pretexting."

In this case, investigators hired by HP called the phone company and impersonated at least one board member to get logs of phone calls to and from his home, said the attorney of a former HP director.

California Attorney General Bill Lockyer characterized the state's investigation as being in the "early fact-finding stage" and refused to say whether criminal charges would be brought against any director or the private investigators HP hired.

HP said in the filing that it would cooperate with the state investigation and that no recording or eavesdropping of directors' phone conversations had occurred. Spokesman Ryan Donovan said that the company would not provide further details of the investigation. Dunn declined to comment through Donovan.

Keyworth's departure comes after a January article on CNET Network's News.com that included a quotation from an anonymous HP source who described a gathering of HP directors at a posh spa in Southern California.

Although the source didn't leak high-level strategic details or say anything inflammatory, the statement angered Dunn, who has been on the board for eight years.

At a board meeting in May, Dunn identified Keyworth as CNET's source, as well as the source of other leaks dating to early 2005. The board asked Keyworth, 66, to resign, but he refused.

In the months since his resignation, Perkins -- the co-founder of venture firm Kleiner Perkins Caufield & Byers -- complained to other executives and journalists about the investigation's ethical implications. He decried it as an invasion of privacy.

His attorney, Viet Dinh, a former assistant U.S. attorney general, says he discovered that one of HP's private investigators also obtained the last four digits of Perkins' Social Security number.

The investigator then called the telephone company and impersonated Perkins, offering his Social Security digits as proof of identity and asking AT&T to send a record of phone calls to and from his house in December 2005 and January 2006 to a free, Web-based e-mail account.

In August, Dinh asked the SEC to require HP to submit a regulatory filing with details of Perkins' resignation. HP acknowledged in the filing Wednesday that the SEC's Division of Corporation Finance sent the company a letter about Perkins' resignation.

Dunn, 52, resigned as the CEO of Barclays Global Investors in 2002 to battle breast cancer and melanoma, but she has taken an active role as the chairwoman of HP, the 11th-largest company on the Fortune 500.

She was one of the board members who hired Fiorina in 1999, but Dunn became disillusioned after years of lackluster stock performance and, in December 2004, wrote a four-page report to Fiorina detailing her concerns.

Dunn announced Fiorina's resignation in February 2005 and two months later introduced Hurd, who was favored by Keyworth and Perkins, among others.

Bruce Oliver, a professor and director of the Center for Business Ethics at Rochester Institute of Technology, said that Dunn had the right to seek the source of leaks but that she crossed an ethical line in going after the home phone logs.

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