HP CEO forced out for hiding payments to contractor 'friend'

SAN FRANCISCO: Hewlett-Packard Co CEO Mark Hurd resigned after an investigation found that he had falsified expense reports to conceal a "close personal relationship" with a female contractor.The shocking announcement from the world's top personal computer maker sent its shares plunging 10%, as Hurd is one of the most admired executives in Silicon Valley, credited with reviving HP after the tumultuous reign of Carly Fiorina.The unnamed contractor, who did marketing forHP from late 2007 to fall 2009, contacted the firm's board in June this year andalleged that Hurd had sexually harassed her, HP said.The boardordered an investigation and found that the married 53-year-old Hurd did notviolate HP's sexual harassment policy. But he had a "close personalrelationship" with the woman that was never disclosed to the board, HPsaid. "The board investigation found that Mark demonstrated aprofound lack of judgment that seriously undermined his credibility and damagedhis effectiveness in leading HP and Mark agreed," HP general counsel MikeHolston said, adding that the board's decision to replace Hurd wasunanimous.Gloria Allred, a Los Angeles-based attorney who hasrepresented numerous high-profile clients including Tiger Woods' allegedmistresses, said late on Friday she is representing the woman who made thesexual harassment claim.She said her client did not have sex withHurd, but declined to identify the woman or commentfurther.According to HP, Hurd filed "numerous inaccurate expensereports" that concealed his relationship with the contractor, who also receivedcompensation and expense reimbursements without legitimate businessreasons.Hurd said the decision to step aside was "painful". Asource familiar with Hurd's "business acquaintance" said the expense issuesstretched over two years, were related to travel, meals and lodging, and totaledup to $20,000.