WSJ reports HP board mistrusted Hurd after settlement with contractor

The battle for spin control between Hewlett-Packard‘s board and former chief executive Mark Hurd isn’t over. Hurd has been fired, but the HP board evidently feels a need to justify the action in light of ongoing criticism.

The Wall Street Journal has become the conduit for this post-game battle. In a story this evening, the newspaper reported that the HP board came to mistrust Hurd after he settled a sexual harassment claim with former marketing contractor Jodie Fisher just the night before HP’s lawyers were going to meet with her.

It was almost as if Hurd and his attorneys were trying to hush Fisher, who agreed to a confidentiality clause in the settlement, before the board got to her. The Journal cited a “person familiar with the matter” who said that the quick settlement impeded the board’s probe of the claim. Hurd settled the case without the board’s input or knowledge, this person claimed.

On the other hand, the WSJ cited a “person close to Hurd” saying that the board had encouraged Hurd to settle the claim for several weeks. Hurd (pictured right) reportedly received a letter from Fisher’s attorney, Gloria Allred, on June 29. He supposedly gave the letter to HP’s general counsel within a half hour of receiving it and indicated that the claim of harassment was not true and that it could be “negotiated and would go away.” The person familiar with Hurd’s thinking said that the board never asked him to address the board or respond directly to its questions during the matter.

The board, however, felt that Hurd’s settlement with Fisher increased mistrust among directors who felt like he wasn’t fully cooperating. It’s clear that somebody is lying here, and, even after the event, both sides care deeply about how the public perceives the episode.

The sexual harassment claim wasn’t the reason that Hurd was fired. It was evidence of falsified expenses (Hurd claims he didn’t fill out his expenses himself) and failure to disclose the “close personal relationship” with Fisher. Hurd has acknowledged failing to live up to HP’s highest standards for behavior, and HP officials have slammed Hurd for his judgment. All of those factors were reason enough to fire Hurd. The vote to oust him was unanimous.

However, some believe other factors were at play in the firing. Just yesterday, New York Times columnist Joe Nocera blasted the board as being cowardly for firing Hurd based on a pretext rather than firing him because of his focus on short-term gains and lack of vision.

Now the board is dealing with backlash that includes a shareholder suit. Critics fault the board for allowing Hurd to receive a golden parachute worth $35 million.

One of the nuggets the Journal dug out was that investigators found Hurd had looked at clips from racy films featuring Fisher (right), who is a former softcore porn actress as well as a former executive. Hurd’s anonymous defender says he just did a Google search of 10 minutes or so. The Journal also said that Hurd and Fisher were introduced in August, 2007 by Caprice Fimbres McIlvaine, who served as Hurd’s chief of staff and was formally director of internal communications. Fimbres McIlvaine resigned last week.

[photo credit]