Hewlett Will Pay $14.5M To Settle Spying Probe

SAN FRANCISCO — Hewlett-Packard Co., the world's largest maker of personal computers and printers, agreed to pay $14.5 million to settle an investigation by California's attorney general over the spying tactics used to uncover boardroom leaks.

The money will be used to finance a fund to fight privacy and intellectual property violations, the California attorney general, Bill Lockyer, said yesterday in a statement. The state won't pursue new civil claims against the company or current and former directors and employees, Hewlett-Packard said in a statement.

The agreement ends California's probe of Palo Alto, Calif.-based Hewlett-Packard, which hired investigators who used fake identities to obtain private phone records. It would take Hewlett-Packard an hour and 23 minutes to generate $14.5 million in sales, based on fiscal 2006 revenue of $91.7 billion.

"It's kind of a slap on the wrist,"an analyst with San Jose, Calif.-based Enderle Group, Rob Enderle, said. "This was a series of mistakes that was more about incompetence than criminal intent."