Hypercom Confidential

Page 4 of 9

"P.S. Your presence in the building, especially in the pink outfit, has not gone unnoticed by all the young men and (one old guy!!!) You look great!"

Smith says she trusted Murphy at first: "He was my savior. I truly believed that at the time. He was there to help me. . . . He had my entire life in his hands for a period of three weeks, possibly. He knew everything about me. He was the only person I could cry to. He was the only person that understood what I was going through. And for that I thanked him."

Later, however, "when he was starting to rub my neck and buy me flowers and gifts," she worried "that Hypercom had set him up to see if I would . . . go out with him, see him, have a relationship with him."

Murphy testified, "I wanted to show her that she could have an executive friend at work who really cared for her and her two boys, and that we could be friends."

Regardless of Murphy's motives, the fact that he engaged in this behavior at all is baffling.

"I'm having a hard time understanding why a director of human resources would be giving gifts," Judge Burke told Murphy at last month's hearing. ". . . Why is that not harassment, buying a subordinate gifts while doing an investigation?"

Murphy responded that he was just trying to be Smith's friend.

Colleen Smith is a feisty woman who is fast on her feet. She's a born mimic who honed her sense of humor as the youngest of five siblings -- the others are boys -- in her native San Angelo, Texas.

But her life has not been easy. Smith has suffered from recurring bouts of depression, an unhappy marriage and the indignities of working for Jairo Gonzalez.

She got married in her early 20s to John Muzzarelli, then a production manager for such musical acts as Elton John and Cheap Trick. In the early '90s, the couple moved to Arizona, where they planned to raise their two young sons.

By 1995, Smith says, her marriage was on the rocks. She felt the need to return to the workplace after eight years as a homemaker. That September, she went to work as a "temp" for a firm that sent her to Hypercom.

There, she worked for months as a receptionist for $6 an hour. One day in early 1996, she recalls, someone in human resources -- not John Murphy -- asked her if she'd be interested in becoming "personal assistant" to Jairo Gonzalez, the new president of the international division.

Gonzalez recently had moved to the Valley from Miami, where Hypercom also maintains offices. His rise inside the company had been meteoric, culminating in his election as vice chairman of the board of directors and the international presidency.

Though records indicate he was born in the United States, Gonzalez spent much time in Colombia. His multicultural background helped him pitch Hypercom products in Latin America.

Smith says her interview for the position was brief.

"He said, 'I've been known to be an asshole. Do you have a problem with an asshole?'" she recalled. "And I said, 'Depending.'"

Gonzalez hired her at $25,000 per year, which was a lot of money to her at the time. But she earned that money the hard way. Gonzalez routinely berated his subordinates, and Smith often was in his line of fire.

Smith says she experienced another unpleasant side of Gonzalez after a conference at the Embassy Suites. There, she says, Gonzalez was complimentary about the job she'd been doing. Then, he tried to kiss and caress her, though Smith says she rebuffed his advances.

Smith told another Hypercom employee, Maryanne Lawson, what had happened. She says Lawson advised her that Gonzalez was very important to Hypercom, and advised her to try to steer clear of him in social settings. (George Wallner confirmed on the witness stand last month that Lawson herself also accused Gonzalez of physically assaulting her, though the time, location and extent of the assault are unknown.)

Smith and her husband separated in August 1996. The following month, she says, Gonzalez raped her at a home Hypercom leased on East Greenway Road. She says she'd gone there to retrieve the belongings of a visiting Hypercom engineer who was about to undergo emergency heart surgery.

From her sworn affidavit of March 25, 1999:

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Paul Rubin
Contact: Paul Rubin