The Big Lie: Spying, Scandal, and Ethical Collapse at Hewlett Packard

How the heck did Hewlett-Packard become the Peyton Place of Silicon Valley?

It was the quintessential California tech firm, created in its founders’ garage, dominated by brilliant engineers—yet, unlike Google, was one that projected a benevolent social image through the philanthropy of both its founders and the company itself.

But by 2005, Hewlett-Packard found itself with a CEO with no operational skill, a board more resembling a circular firing squad, and an eavesdropping scandal that rivaled Watergate.

Anthony Bianco’s The Big Lie: Spying, Scandal, and Ethical Collapse at Hewlett-Packard, doesn’t even pretend to diagnose the underlying reasons of what went wrong at America’s longest running corporate soap opera. It’s neither a sociological treatise nor case study of the relationship dynamics of H-P’s dysfunctional board of directors. Bianco’s reporting (and he’s done plenty of it at BusinessWeek) is complete, nasty, with plenty of villains, no heroes, and perhaps one victim.

Bianco makes it clear the villains were the narcissistic, skills-challenged (and now U.S. Senate candidate) former CEO Carly Fiorina; the domineering board member and venture capitalist Tom Perkins; his colleague, one-time CIA asset Jay Keyworth; and Mark Hurd, the man who replaced Fiorina and has now himself been bounced by the board.

The purported victim was Patricia Dunn, the former chairman of the board. It was Dunn who, trying to determine who at H-P was leaking sensitive information to the press, set in motion a surveillance initiative. Once revealed, Perkins and others—most likely the leakers themselves—used fabricated claims against Dunn, who was in stage-four cancer by this time, to resign and later be indicted on four felony counts.

Bianco (who it is pretty clear was encouraged in his writing by Dunn), however, presents Dunn as nobody’s patsy and a canny operator herself—which only lengthens the hall of mirrors down which this tale goes.

Of course, the irony of The Big Lie is that it was written before the latest scandal that has enveloped H-P. Hurd, who evidently became a pariah within H-P like Fiorina before him, was fired for some sort of relationship with a marketing contractor who was also an ex-reality TV and softcore porn actress.

But even here, the leaks and counter-leaks that have become better known than H-P’s printers have continued. The New York Times reporter Joe Nocera has taken the board to task, saying Hurd’s firing didn’t make sense. Others have lambasted Hurd . . . and on and on it goes at H-P, whose logo should be replaced with a dozen fingers pointing at each other.

So what do we learn? First, big-time corporate politics is just like big-time electoral politics—it’s just played in more confined spaces and usually doesn’t get exposed to the world.

Next, the limits are boundless when it comes to people’s egos and sense of entitlement. Perkins, a one-time employee of H-P, believed he carried the spirit of founder Dave Packard and that this gave him license to dominate and usurp the board of directors. But he was joined by a variety of other directors, CEOs, and leaders in their own right, who all contributed to the mess.

Finally, when you lament that your third-grader doesn’t get along with his peers, take comfort in the fact that the same is going on in many of America’s boardrooms.

Read this alongside Jeffrey Pfeffer’s recent book, Power, and you will understand much of the dysfunction of Fortune 500 capitalism. The problems also derive from the rapaciousness built into our DNA, no better illustrated than when the founding scientists of a new venture Perkins was funding were taken to his Taj-like California chalet. “See guys,” their leader said as they ogled the mansion, “this is what we’re working towards. Right here.”

And that, ladies and gentlemen, pretty much sums up how we got to our present economic situation.