How HP Executives Funneled Money To an Elite Prep School

Fallen Hewlett Packard CEO Mark Hurd was charged with "misusing company assets" after steering company money to his alleged love interest. But deploying corporate resources for personal interests is commonplace in Silicon Valley—even, it turns out, at HP.

Hurd joined HP general counsel Mike Holston and senior vice president Craig Flower in steering HP assets to cover three-quarters of the cost of a data center upgrade at the posh girls school their daughters attend, according to a page on the school's website. The $33,000-per-year Castilleja School has since deleted the page, but it remains in Google's cache and is excerpted below (click to enlarge):

How HP Executives Funneled Money To an Elite Prep School

The announcement also indicates that HP sent staff to install company-made hardware and provided support services from "cabling specialists and software engineers" to the Palo Alto school. There's also a video about the upgrade, which you can see below.

HP's Standards of Business Conduct would seem to frown on spending corporate resources to benefit the family members of just a handful of well-off company executives. The standards, cited by HP as the basis for Hurd's ouster, are pretty clear:

WE AVOID CONFLICTS OF INTEREST...

Proactively address situations that may put your
interests or those of a family member in potential
conflict with HP.

(PDF with the HP standards.)

Of course, HP should not be barred from philanthropic giving because of incidental benefits to employees. But it's hard to argue that a private school with around $100,000 in endowment for each of its 485 students, with a reported student-teacher ratio of 8:1, and with only about 15 percent of students on any sort of financial aid — below average among top private day schools and high schools — is in particular need of corporate support from HP.

Likewise, while funneling company resources to your child's exclusive school falls short of Hurd's alleged misdeeds — sexual harassment of a former soft-core-porn star, which Hurd denies and faking expense reports — HP's giving to Castilleja does raise the question of whether Hurd might have gotten off scot free were it not for his attempted cover up.

HP's board, after all, determined the executive had not violated the company's sexual harassment policy. He also wouldn't have been nailed for adultery; Hurd's former friend has said through her lawyer that the pair had "no intimate sexual relationship."

And he'd hardly be the first Valley executive to spend company money on a close personal friend. Google chief executive Eric Schmidt, for example, once set girlfriend Marcy Simon up with an office and PR gig in Google's New York office, and three years later he's still firmly ensconced as CEO. Google has also invested money with the wife of its co-founder and hired a co-founder's mother in law as a consultant. As CEO of AOL, Tim Armstrong bought Patch.com from himself, effectively.

Violating the spirit of a tech company's conflicts-of-interest policy is not nearly so frowned upon, it would seem, as violating the letter — or, worse still, lying on an expense report.

So Hurd might have kept his job if he'd just been as brazen as his coworkers and industry colleagues and just disclosed the very things he was trying to cover up.