More intrigue from Palo Alto, as additional charges of corporate spying are being thrown at Hewlett-Packard (NYSE: HPQ). Apparently, it engaged in espionage on some of its employees who it feared were feeding confidential information to rival Dell Inc. (NASDAQ: DELL). Fortune magazine reported that HP obtained the records of former employee Karl Kamb, Jr. based on the belief that Kamb was stealing trade secrets. Further, a counter-suit Kamb filed in January indicates that HP was paying a former Dell executive for trade secrets.

The story will only get goofier from here, probably. The "pretexting" event from last year that dragged Hewlett-Packard into Capital Hill sessions and extensive media coverage appears to not have been an isolated incident. If HP did indeed receive trade secrets from Dell, that would be a violation of federal law and would again have CEO Mark Hurd under scrutiny, just as HP continues to make great gains at the expense of Dell and IBM (NYSE: IBM) these days (good news for HPQ investors). Is another rainy day coming for HP soon?

Dell, meanwhile, has "requested a full and thorough full investigation" from HP but has not heard back from the Palo Alto company. 2007 may go down as yet another year where a ridiculous black cloud hangs over HP's head even as the company is doing well financially against all its main competitors. Perhaps it is doing well because of all the "trade secrets" it gleaned from Dell in the huge PC market for consumers. (Just kidding . . . )

There is some closure to the boardroom scandal at Hewlett-Packard Company (NYSE:HPQ). The company's former chairwoman, Patricia Dunn, as well as Kevin Hunsaker (a former HP executive), Ronald DeLia and Matthew Depante (both are private investigators), were facing four felony charges that related to listening-in on board members. One of the practices was "pretexting," which involves impersonating people to get private information.

Now the four have pled guilty to one misdemeanor each. Thus, there will be no prison time. But there may be fines (up to $10,000) and community service. The whole thing is unfortunate, really. Dunn has had a stellar career in Corporate America. And, it was clear that HP had a dysfunctional boardroom.

While her intentions were good -- to root out the leakers -- it ultimately went out of control.

This is also a wake-up call to board members. While it's good to be vigilant, there are certainly limits.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

This morning's Wall Street Journal reports on its reporter, Pui-Wing Tam's, report on how Hewlett-Packard Company (NYSE: HPQ) spied on her.

There are many levels of irony in this story. Reporters do all sorts of investigations on their subjects. I don't know how they cultivate their anonymous sources to dig up the details that they report. But my hunch is that while they're often snoops -- peering into places where their targets would prefer they did not -- reporters don't resort to the kind of tactics (pre-trash inspections or monitoring phone calls and IM sessions) to which Tam was subjected.

But I can't help but think that Tam's subjects share some of the same fears of being investigated that she must have felt when she began to realize that HP was placing her under surveillance. Her article's cool, almost tongue-in-cheek tone does not reveal these fears explicitly, instead leaving them to the reader's imagination.

But I imagine that former HP Chair Patricia Dunn must have felt a similar fear when she realized that someone on HP's board was leaking to the media. I'm not defending what HP did; I think it's a 1984-like invasion of privacy for which HP will suffer significant consequences.

With deference to Prussian General Von Clausewitz -- who famously said war is "a continuation of politics by other means" -- I see HP's tactics as investigative reporting by other means.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He has no financial interest in HP.

It's not common when a national magazine like Newsweek has a corporate-governance as its cover story. True this may happen if there is a mega scandal such as Enron or WorldCom, but for the current issue of Newsweek, there is picture of HP's chairman Patricia Dunn on the front page with the title: "The Boss Who Spied on Her Board."

This story is more than just about corporate government. It's about privacy – especially in the Internet Age. If the board of a global company is being investigated then aren't we all fair game?

Well now HP's board has decided to remove Dunn as chairman. In her place will be the company's CEO, Mark Hurd. As I wrote in a post yesterday, the scandal was a perfect opportunity for Hurd to consolidate his power. And given his sterling performance at the helm, shareholders are definitely happy.

Essentially, over the past few years, the HP board had become quite powerful. After all, in early 2005, the board ousted its CEO Carly Fiorina. Such a move is very rare.

And it was Dunn who orchestrated the coup.

While this turned out to be good move, it looks like Dunn went too far. That is, when she wanted to stop leaks from board members, she led an investigation. Of course the tactics were extreme as one of the investigators engaged in a questionable practice known as pretexting, which involves impersonating people to get phone records.

Instead, Dunn should have hired an independent law firm to provide advice on how to handle the investigation. It would have given her a strong layer of protection.

In the end, it was a painful lesson about power.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.