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After publicly flogging former HP executives and investigators, California looks set to let off those charged in the company's spy scandal with nothing more than misdemeanors.

Multiple reports cite sources involved in the case confirming that the California attorney general's office has offered all five people charged in the spy scandal, including former HP Chairwoman Patricia Dunn, a soft exit. The accused can plead guilty to a single misdemeanor charge rather than going to court over four felony charges. California has been pursuing the HP Spy Probe Five, following its dig into how HP and its hired investigators obtained the phone records of executives, board members, employees and reporters.

Last week, federal prosecutors advanced their own agenda in the HP case. They obtained a guilty plea from private investigator Bryan Wagner, who copped to felony counts of conspiracy and aggravated identity theft. The Feds claim that Wagner is now helping with their investigation.

Washington's involvement in the matter could make the other defendants reluctant to accept even a misdemeanor guilty plea in California given the state's double jeopardy provisions.

Besides Dunn and Wagner, the three other defendants include spy probe star and former HP ethics chief Kevin Hunsaker and two hired investigators - Ron DeLia and Matt DePante. Under a misdemeanor charge, the defendants could face a year in prison and a $5,000 fine, although jail-time would be unlikely.

There seems to be a race on by both California and Washington to claim a scalp in this HP spy scandal. Both sides have spent quite a lot of time, money and effort making a huge deal over HP's ethics lapse. ®

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