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Hurd Reportedly Leaked EDS Deal

More details emerge about his strange exit from HP

An allegation of disclosing inside information has now been added to the otherwise flimsy story of why the HP board asked for the resignation of its star CEO Mark Hurd in August.

It's the first thing that makes any sense in this whole benighted tale.

According to a story that appeared Friday night in the Wall Street Journal - weekends being famous for people not reading newspapers - the supposedly closely held letter sent to Hurd on June 29 by Gloria Allred, the publicity-hound lawyer hired by HP contractor Jodie Fisher, accused him not only of sexually harassing her client, it claimed that he told Fisher that HP planned to buy EDS weeks before the deal was locked and loaded.

HP never mentioned such an accusation when it ousted Hurd. (Pause here and reflect on HP protecting its stock price. It took a nasty enough hit with Hurd just leaving the company.)

Since Friday, stories have appeared in Reuters and the AP, each quoting their own nameless "source familiar with the matter" confirming the allegation.

The Journal said it talked to people close to the HP board, close to Hurd and familiar with the board's investigation of the Fisher "affair." The paper also says it reviewed unidentified documents apparently stemming from the internal HP investigation. In other words it was given a certain amount of access.

Fortune, a little less wired and fed a different take given its audience, is out with a long and chatty story about how the CEO of the world's largest technology company came to hire a failed B-list actress to greet the company's most important customers and, like the Journal, what happened in the HP boardroom in the wake of the Allred letter.

Its story says that Allred's letter "painted Hurd as a stalker who also dished personal details - and one professional secret - to Fisher" and let it go at that.

Apparently the HP board is doing what the HP board does best and that's leak - a controlled "authorized" leak ahead of an unauthorized one - control goes just so far - and who knows if Hurd isn't in on it.

The contents of Allred's letter were supposedly sealed when Hurd left HP - but the Journal's story begins with parts of the opening line of the letter.

Supposedly Hurd told Fisher about the EDS plan toward the end of March 2008 at an HP event in Madrid. HP didn't announce the $13.9 billion acquisition until May.

There are other details now in circulation that could only be know to the HP board like the blow-by-blow deterioration of its support for Hurd between the end of June and the beginning of August including Marc Andreessen, put on the board by Hurd, driving to Hurd's house the night of July 29 to tell him that the board had decided to disclose some of Fisher's allegations and to say to him - according to the Journal - "‘You have created a situation ideally suited for TMZ,' the gossip web site and TV program."

According to the paper Andreessen went back to the board with Hurd's offer to settle privately with Fisher - a device Hurd thought would keep a lid on any disclosures, something he wanted to avoid at all costs - as well as an offer to resign in three-six months after he had helped find his replacement - an effort to make things look like normal retirement but by August 3 the board wanted him gone.

Meanwhile on August 4 or 5 Hurd's lawyer worked out that settlement with Fisher, supposedly worth a few thousand dollars, as hard as that may be to be believed. Common sense would suggest that Allred would be unlikely to settle for a few dollars even if a single mother would. It might be assumed that somebody other than Hurd is paying them off.

The settlement came with a confidentiality agreement that Fisher, her mother and Allred have assiduously observed and Fisher in turn wrote a letter, also in circulation, absolving HP of any responsibility.

Reuters says it reads in part, "There are many inaccuracies in the details of the June 24, 2010 letter. I do not believe that any of your behavior was detrimental to HP or in any way injured the company or its reputation."

What exactly those "inaccuracies" were weren't explained in the letter.

The settlement and its attendant confidentiality agreement took a mediation session between HP and Fisher off the table. The Journal says, "Some directors felt blindsided. They had wanted to hear from Ms. Allred before a final vote on Mr. Hurd's fate and were counting on the mediation to evaluate the claim Mr. Hurd had leaked the EDS deal."

Hurd's people say there was "absolutely nothing" to Fisher's EDS allegation. His spokesman also told the Journal that Hurd's lawyers told HP that it could talk to Fisher without violating the agreement but Hurd was out on August 6.

Hurd's people have also claimed there was nothing to the allegations of misstated expense accounts covering up Hurd's relationship with Fisher and HP itself absolved him of the sexual harassment charge (without talking to Fisher). Hurd and Fisher both denied having sex, but Hurd on exiting oddly admitted that he had in some way that was never clear violated HP's standard of business conduct.

Neither the Journal nor Fortune say he was pushed out over any EDS indiscretion. They both say it was because the board had lost confidence that Hurd was telling the truth about his relationship with Fisher (which is pretty much what had been teased out before). His story and HP's investigation didn't quite jibe. One can either assume that they are naïve or simply following what they have been fed, distracted by the sex, money and lying angle. Any board has a right to expect fiduciary discretion.

The Journal says Hurd initially told the board he didn't know Fisher well and later told HP's investigators that they had a "very close personal relationship" The evidence suggests they met at least twice outside of HP functions - aside from "twice personally interviewing a person with no relevant experience for a minor position" - and that he knew more about her adult-film career than he let on, having logged in to certain web sites over a two-week period.

The colorful detailed disclosures come as Hurd's new boss, Oracle CEO Larry Ellison is having a field day in the press lambasting the HP board for firing Hurd and replacing him with erstwhile CEO of SAP Leo Apotheker.

Ellison is supposed to take the stand Monday in Oracle's case for copyright infringement case against SAP seeking $2.3 billion in damages from the German company. SAP has already admitted liability it just doesn't think it amount to billions of dollars.

Ellison has publicly accused Apotheker in the last few weeks of "overseeing an industrial espionage scheme centering on the repeated theft of massive amounts of Oracle's software," painting him as a bigger rascal than whatever peccadilloes Hurd is supposed to have committed. The EDS disclosure may even the score.

The Justice Department and the SEC are both reportedly following the trial.

HP never mentioned the EDS allegation publicly, but it has reportedly provided information about Hurd's departure including the EDS accusation to regulators although, the Journal say, that may not have been necessary if no one traded on the leak. Perhaps HP knows the authorities don't have grounds to take any action and just wants to get out from any precipitous leaks that damage its stock price while at the same time puncturing Ellison's holier than thou attitude.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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