- Associated Press - Sunday, August 8, 2010

SAN FRANCISCO (AP) - Ousted Hewlett-Packard Co. CEO Mark Hurd has settled allegations of sexual harassment lodged against him by a female contract worker for HP, a person with knowledge of the case told The Associated Press.

The harassment accusation set off a chain of events that led to the discovery of allegedly falsified expense reports for dinners Hurd had with the woman and culminated in Hurd’s forced resignation Friday from the world’s largest technology company.

The person familiar with the case told the AP late Satuday that Hurd agreed to pay the woman but would not reveal the size of the payment. The deal was reached Thursday, a day before Hurd’s resignation. The settlement was between Hurd and his accuser and did not involve a payment from HP, this person said.

This person, who spoke on a condition of anonymity, was not authorized to speak publicly about the issue.

The nature of the harassment complaint wasn’t clear. Hurd and a lawyer representing the woman said the relationship was not sexual.

The woman’s lawyer, celebrity attorney Gloria Allred, declined to describe the alleged harassment. Allred would not identify her client or make her available for an interview.

The woman was paid up to $5,000 per event to greet people and make introductions among executives attending HP events that she helped organize.

HP’s board of directors said its investigation found that Hurd listed other people as his dinner partners on expense reports when he’d been out with the woman. HP also claimed Hurd arranged for her to be paid for work she didn’t do.

There was only one instance in which that occurred, the person close to the case said, but it was for an event that was canceled at the last minute and the woman’s contract required that she would be paid unless an event was canceled 30 days in advance.

The amount of money in question wasn’t known.

Hurd, 53, insists they were legitimate business expenses. Hurd says the errors in the reports may have been entered unwittingly by an assistant, according to the person close to the case.

The company determined Hurd didn’t violate its sexual harassment policy but broke its rules of conduct and irreparably harmed his credibility and integrity.

Interim CEO Cathie Lesjak defended the company’s decision.

She said Sunday that HP acted appropriately and that investors and big customers she has spoken with have been “extremely supportive.”

“They respect how we dealt with the situation with transparency and speed. The bottom line is, the HP brand is strong,” she said on a conference call with reporters.

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