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HP & the Cougar

Anybody really know why Mark Hurd was forced to resign?

Anybody really know why Mark Hurd was forced to resign? We ask because the story that HP put out Friday to explain why its golden boy suddenly wasn’t its CEO anymore doesn’t make much sense especially in view of the contradictions now coming from Hurd’s side of the aisle.

If Hurd wasn’t having an affair with 50-year-old company geisha Jodie Fisher why would he fudge his expense account to cover up the fact that he had dinner with her?

HP said its investigation found Hurd didn’t sexually harass the company’s hired meeter and greeter – well, at least he didn’t violate HP’s sexual harassment policy whatever that means – and Hurd’s defenders have subsequently said that he didn’t fill out his own expense accounts – not many senior executives do – so apparently he was ousted because of a $1,000-$20,000 clerical error that doesn’t budge an HP decimal point.

Friends of Mark also claim that he did too sometimes list her as a dinner guest and paid out of his own pocket when business wasn’t discussed and say that HP’s allegations about him paying her for work she never did consisted of a meeting she was supposed to attend that was canceled at the last minute when her contract called for 30-days notice.

Ah, but if he didn’t sexually harass Ms. Fisher, who seems from her pictures to have trouble staying inside her blouse – apparently a holdover from her days of acting in raunchy flicks – then why did he settle up with her before he left HP? And what was his breast-beating last week all about, his regrets over not living up to “standards and principals of trust, respect and integrity”?

Hurd’s tennis partner Larry Ellison, who knows a thing or two about shtupping the help, blasted the HP board Monday for making “the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago. That decision nearly destroyed Apple and would have if Steve hadn’t come back and saved them.”

“In losing Mark Hurd,” Ellison told the New York Times in an e-mail, “the HP board failed to act in the best interest of HP’s employees, shareholders, customers and partners. The HP board admits that it fully investigated the sexual harassment claims against Mark and found them to be utterly false.” And, “what the expense fraud claims…reveal is an HP board desperately grasping at straws in trying to publicly explain the unexplainable; how a false sexual harassment claim and some petty expense report errors led to the loss of one of Silicon Valley’s best and most respected leaders.”

Ellison says push came to shove in the HP boardroom over whether to disclose the sexual harassment allegation. Initially the board split 6 to 4 in favor of publicizing it, a decision later made unanimous. Hurd wanted it hushed up since it was baseless.

Other friends of Mark claim relations between Hurd and the board then got contentious, citing Mark’s hair-trigger temper. Hurd reportedly decided he didn’t need the aggravation, that he might as well pick up his $30 million-$40 million golden parachute and walk; the money’s worth a third of the three-year contract he was negotiating.

His defenders blame APCO, the public relations firm that told the board it absolutely had to go public with Ms. Fisher’s claims, and HP general counsel Michael Holston, who oversaw the investigation.

Holston was originally hired by Hurd to investigate the pretexting mess of four years ago when HP was spying on its own board and members of the press. Last Friday the lawyer told Wall Street that his investigation of Hurd turned up a “systematic pattern of improper expenses and inaccurate reports as well as the disregard for the values of the HP of trust, respect and integrity that Mark himself admitted he didn’t live up to.”

Ironically, Gawker.com discovered that Hurd, HP SVP Craig Flowers and the holier-than-thou Mr. Holston had steered HP assets into covering three-quarters of the cost of a state-of-the-art data center upgrade at the $33,000-a-year Castilleja School their daughters attend complete with HP support staff. The school has deleted its thanks to the trio but the blog captured the web site before it disappeared.

Friends of Mark also claim that Hurd had enemies on the board left over from the previous regime who were disgusted with the way Hurd threw former HP chairman Patty Dunn to the wolves because of the pretexting scandal. They reportedly resented his “I am HP” attitude, ironically enough a creation of HP’s own publicity department.

However, the leadership for the anti-Hurd contingent was reportedly supplied by Mark Andreessen, who was tapped by Hurd for the board and who was ticked that HP hadn’t done that much with Opsware, which Andreessen had sold HP. Andreessen, who is now on the board’s search committee, evidently didn’t think much of Hurd’s innovation skills.

Andreessen reportedly also resisted the idea of signing a new three-year contract with Hurd. He only wanted to sign a one-year deal.

The irrepressible Henry Blodget, yes, that Henry Blodget, the ex-Merrill Lynch analyst currently banned from Wall Street and now a writer, claims HP didn’t have the evidence of fraud and embezzlement that the company alleged and that’s why Hurd was allowed to resign and walk away with close to $40 million otherwise he would have simply been fired.

Blodget is believed to be talking to Ellison, who’s talking to Hurd and his lawyers and among them they noticed that HP is now couching its claims more guardedly and ambiguously.

The clear winner here is Ms. Fisher and her lawyer Gloria Allread although friends of Mark say the check he wrote her – reportedly a few weeks ago – wasn’t “material.” Fisher, the alleged victim, put out a statement saying she was “surprised and saddened that Mark Hurd lost his job over this. That was never my intention.” My, my.

Blodget thinks that Allred blew whatever went on between Hurd and her client up out of all proportion and that APCO scared the bejesus out of the board with visions of Allred going on “talk show raving about what a horrible sex predator their CEO was and how he had demanded an innocent single mother do all sorts of heinous things and then fired her when she didn’t.”

Blodget figures the board was grateful at first for the inaccurate expense reports thinking it could oust Hurd and avoid the bad publicity and then concluded that the inaccuracies wouldn’t hold much water and that it was worth paying Hurd $40 million to avoid a wrongful termination suit.

According to friends of Mark, Hurd reportedly doesn’t know exactly how much his expense account is supposed to be out of whack although he has offered to reimburse the company. HP is now reportedly investigating the expense accounts of all senior executives.

And, given the details surfacing and the amount of ink spilt in their name, APCO might want to brush up on its damage control skills. Observers are waiting for shareholder suits to start piling up over the billions sheered off HP’s market cap by Hurd’s ouster.

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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