Hewlett-Packard Corp. Chairwoman Patricia Dunn started her career as a freelance journalist, but ... HP chairwoman under scruti

Hewlett-Packard Corp. Chairwoman Patricia Dunn started her career as a freelance journalist, but a rising level of paranoia over alleged leaks to the media may prove to be her undoing.

HP disclosed in a filing Wednesday with the Securities and Exchange Commission that the computer maker sought the private telephone records of members of the company's Board of Directors in a bid to determine who leaked confidential information to reporters. It hired private investigators who used the invasive and possibly illegal practice of "pretexting" -- posing as someone else to get personal information about that person.

"If the chairman thinks this is the way business ought to be conducted, maybe it's time for her to take a sabbatical," said Peter Morici, professor at the Professor Robert H. Smith School of Business at the University of Maryland. "It's arrogant and inappropriate."

HP said in the SEC filing that the company 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 be gone by March 2007.

The company also revealed that lawyers hired to review its tactics could not determine if the investigation "complied in all respects with applicable law."

California Attorney General Bill Lockyer subpoenaed some HP officials Wednesday and is examining the tactics of the investigation. He characterized the probe as being in the "early fact-finding stage" and refused to say whether criminal charges would be brought against Dunn, other directors or the private investigators HP hired. Lockyer said the state could also charge HP with civil violations and order the company to pay fines.

"I don't have a settled view on whether it was illegal yet, but it certainly was colossally stupid," Lockyer said in a phone interview Wednesday.

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.

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

Keyworth's departure comes after a January article on CNET Network Inc.'s News.com, which 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 -- co-founder of Menlo Park-based venture firm Kleiner Perkins Caufield & Byers -- complained to other executives and journalists about the investigation's ethical implications.

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 used that information to open an online account with AT&T, Dinh said. The investigator then called the telephone provider and impersonated Perkins, offering up 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.

"Despite this current disagreement, Tom Perkins has a warm place in his heart for HP and believes in the prospects and performance of HP under the leadership of Mark Hurd," Dinh said.

Dunn, 52, resigned as CEO of Barclays Global Investors in 2002 to battle breast cancer and melanoma, but she's taken an active role as 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, she 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.

She majored in economics and journalism at the University of California, Berkeley, and worked as a freelance journalist before joining Barclays as a temporary secretary. But Dunn had reportedly grown increasingly upset over HP's leaks to journalists.

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