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Lawyer: Misdemeanor Plea Deal Offered to Dunn, Others in HP Case

State prosecutors offered to drop felony charges against former Hewlett-Packard Co. Chairwoman Patricia Dunn and the four other defendants in the company's boardroom spying scandal if they agree to plead guilty to a misdemeanor, a defense lawyer said Thursday.

Stephen Naratil, lawyer for private investigator Bryan Wagner, said the Attorney General's Office offered a plea deal that would eliminate all four felony charges against his client in exchange for a misdemeanor guilty plea.

Naratil said Deputy Attorney General Robert Morgester also told him that the other four defendants in the case -- Dunn, former HP ethics chief Kevin Hunsaker, and outside investigators Ronald DeLia and Matthew DePante -- were offered the same deal.

The attorney general's office declined to comment, as did attorneys for DePante and DeLia. One of Hunsaker's lawyers, Thomas Nolan Jr., also declined to comment but said his client is not interested in taking any plea deal.

"We're not involved in the plea negotiations because Kevin didn't do anything wrong and didn't do anything illegal," Nolan said.

Dunn's defense lawyer could not be reached Thursday but has said previously that he plans to challenge the charges at trial.

The defendants each face four felony counts of identity theft, conspiracy, fraud and illegal use of computer data for their alleged roles in HP's ill-fated effort to root out the source of boardroom leaks to the media.

Former Attorney General Bill Lockyer filed the charges in October amid a media frenzy over the scandal, which rattled the top ranks of the Silicon Valley company.

The scandal led to the departure of Dunn, Hunsaker, former general counsel Ann Baskins and prompted investigations by state prosecutors and several federal agencies.

Naratil said each of the charges can be prosecuted as either a felony or a misdemeanor, and the defendants were offered the chance to plead guilty to any one of the lesser offenses.

So far, apparently none of the defendants has agreed to the deal, and the difficulty in negotiating any plea bargains at the state level is compounded by an ongoing federal investigation.

Wagner pleaded guilty last week in San Jose federal court to identity theft and conspiracy, which are similar to the crimes alleged in state court.

Wagner acknowledged using the Social Security numbers for HP directors, journalists and their family members to trick telephone companies into divulging phone records and conspiring to share the information with others involved in HP's probe.

Wagner never had any direct contact with anyone inside HP, and was at the bottom of a long chain of security subcontractors that led back to HP, his lawyer said.

On Wednesday, the state Attorney General's Office said it would probably not oppose a motion by Wagner's lawyer to dismiss all the state charges against him because he had admitted to the crimes in federal court.

California law prohibits prosecutors from pursuing charges against someone convicted of the same crime in federal court.

Lawyers for all five defendants appeared in Santa Clara County Superior Court on Wednesday to discuss the progress of settlement talks. Wagner's lawyer is scheduled to return to court Jan. 26 to file his formal motion to dismiss the charges.

Lawyers for the other four defendants are scheduled to return to court on Feb. 28 to set dates for preliminary hearings.

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