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Former HP chairman admits 'mistake' in sexism trial

Ray Lane appears at San Francisco Superior Court in San Francisco, California March 2, 2015. REUTERS/Robert Galbraith

By Sarah McBride and Dan Levine

SAN FRANCISCO (Reuters) - Onetime highflying tech executive Ray Lane testified on Monday during a sex discrimination trial involving his former employer, Kleiner Perkins Caufield & Byers, that he made a mistake in judgment involving the harassment of a female venture capitalist at the firm, and that he feared for the woman's safety.

Lane, who previously served as executive chairman of Hewlett-Packard Co (HPQ.N) and president of Oracle Corp (ORCL.N), told the court he erred in not immediately informing others that Trae Vassallo told him about unwanted advances by her colleague, Ajit Nazre, during a 2011 business trip.

"I made a mistake," he said. "It was my mistake. I cared more about her feelings than anything else. I thought it should be her choice" whether to tell others at the firm and start an investigation, he said.

Eventually, he would have taken action, but at the time, he suggested to Vassallo that she think it over and discuss it with her husband, in part because he "feared somewhat for her safety."

The firm did start an investigation after Vassallo told more partners.

Vassallo had complained that Nazre tried to enter her hotel room at night, wearing a bathrobe and, Lane said, holding a glass of wine.

Lane told the court he worried Nazre "could have pushed his way in" and the situation "could have gone in a different direction."

Whether Kleiner reacted appropriately to allegations of sexism is at the heart of the suit, filed by former partner Ellen Pao.

The case, brought in 2012, helped spark a broad and ongoing discussion about gender issues in Silicon Valley.

In the suit, Pao alleges she suffered discrimination and retaliation after Nazre pressured her into an affair in 2006 that she soon ended. The discriminatory conduct eventually spread to other partners, leading her to miss out on a key promotion, she alleges.

After Pao told Lane about the affair in 2007, Lane told her to consider marriage to Nazre, she said in her suit. In court Monday, Lane denied telling Pao to marry Nazre.

Lane said Nazre's bonus was cut that year as punishment for the affair.

Vassallo, who testified in the case last week, said Lane had told her to be "flattered" by Nazre's advances.

On Monday, Lane denied making that remark. Later on Monday afternoon, an independent investigator hired to look into Nazre's actions testified that Vassallo had told him Lane did say that, but she believed he was joking.

The firm has vehemently denied Pao’s allegations. Kleiner’s lawyer, Lynne Hermle, said in court last week that the firm treated women fairly and did not promote Pao because she lacked talent.

Pao’s attorney, Alan Exelrod, said the firm systematically failed to promote women to senior investing partner. He said Pao excelled at her work, lining up patent firm RPX, which raised $160 million in an initial public offering, as an investment.

Lane joined Kleiner Perkins in 2000 after leaving software giant Oracle. He championed Fisker Automotive, which raised $1.5 billion from Kleiner and others before declaring bankruptcy in 2013.

Lane is now a partner emeritus at the firm. He backed start-ups run by several women while an investing partner, he testified Monday, and four women were recruited to the board of HP during his time as executive chairman of that company.

The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.