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California to Cancel Oracle Deal 202

Posted by michael from the golden-parachute dept.
ShaunC writes "Back in mid-April, the state of California bought $95M worth of Oracle software, which turned out to include more licenses than the state has employees, at a taxpayer cost of $41M more than necessary. Now, CNet is reporting that the contract is being cancelled. Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made, several state officials have been suspended, and a criminal investigation into the deal is already underway."
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California to Cancel Oracle Deal More

California to Cancel Oracle Deal

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  • Who pays ? (Score:1, Insightful)

    by linatux ( 63153 )
    Heads are rolling and arses being kicked, but I bet the tax payer has to dig yet deeper to pay for bailing out of the contract.
    • Can't be worse than Enron, of course we still don't know all the details on how CA got screwed by them.

    • Re:Who pays ? (Score:3, Insightful)

      by Kamel Jockey ( 409856 )

      but I bet the tax payer has to dig yet deeper to pay for bailing out of the contract

      You are most definitly correct. Oracle will most definitly sue CA for breach of contract. This will most likely lead to a multi-million dollar settlement which CA's taxpayers will have to pay. In the end, Oracle will make out like a bandit because they would have made the settlement money for doing nearly nothing, since breaking the contract no longer obliges Oracle to provide any goods/services.

      This kind of BS has happened before, it will happen again. A few years back, Pennsylvania entered into a $200 million+ contract with an emissions testing company to inspect peoples' cars. When the administration changed, the commonwealth terminated the contract and ended up paying $80 million or so in breach of contract costs.

      • Investigation (Score:4, Informative)

        by truthsearch ( 249536 ) on Tuesday May 07, 2002 @08:13AM (#3476503) Homepage Journal
        If the investigation leads to a finding that the contract was part of a bribe, the contract could be nullified due to being based on a criminal act. The taxpayers will most definitely pay for any multi-million dollar trials, but Oracle may not be able to sue for breach of contract if a court finds the contract was signed for a bribe.

      • Re:Who pays ? (Score:5, Informative)

        by Ioldanach ( 88584 ) on Tuesday May 07, 2002 @08:20AM (#3476546)
        Oracle will most definitly sue CA for breach of contract.

        And just how will they do that, when they made an offer to dissolve the contract if the State wished to do so?

      • Re:Who pays ? (Score:2, Interesting)

        by Zeinfeld ( 263942 )
        You are most definitly correct. Oracle will most definitly sue CA for breach of contract

        Bzzzt! Wrong!!

        Read the damn article, Oracle offered to let CA out of the contract. Moreover the company with severre legal difficulties is the agent which took money to consult defining the state database needs then sold the software. That is at the very least a conflict of interest. The state attorney general appears to be alledging that there was something more.

        Oracle is offering to let CA out of the contract for good reason, the cost to oracle's reputation of a major investigation of whitewater proportions would be vast. The state (and national) repubicans have a vested interest in that type of investigation, both to damage Davis who is a possible opponent to GWB in 2004 and more importantly to draw attention away from the stench comming from the GOP/GWB Enron connection.

        While US politics is corrupted to a major extent by campaign contribribetions, $25K is simply too small a kickback on a $95 million contract to be a bribe. The going rate is at least 1%.

        GWB and the GOP received several million in cash and services in return for being allowed to rape the CA energy market. GWB was lent a jet plane by 'Kenny Boy' for the campaign. That cost consumers an additional $20 billion.

  • i wonder if the deal included solar panels to keep those oracle boxes crash-proof?
    • That was not a troll. He was making the point that CA debating database (or any other) technology is premature when they lack the infrastructure to provide utilities that most of the first world takes for granted.

  • What? (Score:4, Interesting)

    by delta407 ( 518868 ) <{moc.xahjfrel} {ta} {todhsals}> on Tuesday May 07, 2002 @07:45AM (#3476361) Homepage
    How does one, exactly, "undo" a contract for millions of dollars worth of software licenses? Seems like a very sticky legal situtation. Especially since "There are some parts that have already moved forward."

    And how is CA doing this, when Oracle says "they must have been talking to themselves because we didn't know about it"?
    • That was my first question. Also, it seemed to me that they would end up spending more money when they have to convert things over and hire new consultants to sort things out. Fortunately the article included this bit:

      Maviglio said the state, which signed the agreement last May, has not begun to use the software.

      It seems that at least they won't be paying to undo stuff already in place.

    • The article made it sound like Oracle/legicon (or whoever) made and offer to cancel the deal.

      Spokesmen at Oracle and Logicon said on Monday that they were unaware that the state had accepted their offers to end the contract. A fourth-party to the deal, Arizona-based Koch Financial Services, which arranged the financing, said Monday it had no comment. Maviglio said Monday that the state was unaware of any official offer from Oracle last week. "They said that, but they must have been talking to themselves because we didn't know about it," Maviglio said Monday.

    • Re:What? (Score:2, Informative)

      by Jucius Maximus ( 229128 )
      "How does one, exactly, "undo" a contract for millions of dollars worth of software licenses?"

      RTFA:

      "Logicon, the Oracle reseller that negotiated the contract, agreed over the weekend to cancel its portion of the deal, clearing the way for the state to end the six-year contract for database management software, according to Davis spokesman Steve Maviglio."

    • And how is CA doing this, when Oracle says "they must have been talking to themselves because we didn't know about it"?

      Umm... they didn't say that, the representative for the state said that.

      (from the article>

      Maviglio said Monday that the state was unaware of any official offer from Oracle last week.

      "They said that, but they must have been talking to themselves because we didn't know about it," Maviglio said Monday.

      Which is to say that even thought it was all over the internet and probably the CA newspapers, Oracle must not have actually called them up and made the offer. Either that or Maviglio doesn't read newspapers.

    • Re:What? (Score:3, Funny)

      by crucini ( 98210 )
      How does one, exactly, "undo" a contract for millions of dollars worth of software licenses? Seems like a very sticky legal situtation.


      SQL> ROLLBACK;
      Rollback complete.

  • the donation is not a smoking gun (Score:5, Insightful)

    by jonbrewer ( 11894 ) on Tuesday May 07, 2002 @07:49AM (#3476382) Homepage
    "Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made, several state officials have been suspended, and a criminal investigation into the deal is already underway."

    If anyone really thinks that a $25k donation would have anything to do with a $95,000,000.00 deal for software, they need to get reacquainted with reality. $25k is nothing unusual. It's a Red Herring, and doesn't belong in an informed discussion on the Oracle/California mess.
    • Maybe it was only the first installment?
    • bull hock!!!!

      25K is not much to raise at a singe fund raiser, but to get it from one company at the state level, that is a lot of dough.

    • Re:the donation is not a smoking gun (Score:5, Insightful)

      by ShaunC ( 203807 ) on Tuesday May 07, 2002 @08:05AM (#3476468)
      $25K may be but a drop in the bucket, but it's money regardless. According to the article, the contribution was made just after the Oracle deal closed, and the official who accepted the contribution resigned. I'd say there's certainly a tie-in somewhere. If not, something stinks even worse.

      I wrote the submission text. For the record, I'm a democrat. I have nothing against Gray Davis and I wasn't trying to make a subliminal political statement by mentioning the contribution. Payola is payola, no matter which party and no matter who the contributor.

      Shaun
      • I wrote the submission text. ... I wasn't trying to make a subliminal political statement by mentioning the contribution
        The $25K has also been mentioned in nearly every article I've read on the subject. Thus, I think it was appropriate to include it in the submission.
      • Let's Play The "Get into Oracle's Head Game"!!

        (Announcer) Mr. Ellison! You've just tricked Gray Davis into paying YOU $50 million taxpayer dollars he didn't have to. What are you going to do?

        (Ellison) I'm going to Disney World! But first, I'm making sure this idiot gets re-elected.

        $25K IS a drop in the bucket and $50 million is worth more to Davis politically than a 25K campaign contribution.

      • Re:the donation is not a smoking gun (Score:4, Insightful)

        by pnatural ( 59329 ) on Tuesday May 07, 2002 @03:58PM (#3479795)
        I don't follow CA politics. In fact, I had to google "Gray Davis" to find his party affiliation.

        My problem with most media -- specifically scandal reporting -- is that when the scandal involves a Dem, invariably that fact is left out.

        Had Gray Davis been a Republican, or worse yet, a conservative, I'd bet you my last dollar that the headline would be something similar to "New Scandal in Republican Governors Office".

        Call me a nut, dismiss my option: I don't care. But the next time you're watching CNN and they talk scandal, remember what I said here. Then listen to the talking head very, very closely and tell me I'm wrong.
        • There are two ways to take that.
          1) If it's a Democrat, it's expected, if it's a Republican it's news.
          2) If it's a Democrat, kindly omit the reference, if it's a Republican, emphasize the fact.
          That's the problem with unbiased news. On whose side are they unbiased?
    • If anyone really thinks that a $25k donation would have anything to do with a $95,000,000.00 deal for software, they need to get reacquainted with reality. $25k is nothing unusual. It's a Red Herring, and doesn't belong in an informed discussion on the Oracle/California mess.

      Hmmmm. I wonder if you'd voice the same opinion if the recipient were a Republican instead of a Democrat. Methinks you need to get reacquainted with political reality.
      • If anyone really thinks that a $25k donation would have anything to do with a $95,000,000.00 deal for software, they need to get reacquainted with reality [...]It's a Red Herring, and doesn't belong in an informed discussion on the Oracle/California mess

      Nice to hear from someone informed. Inform us then, how much did Oracle donate the the Republican candidate in California? And to every candidate in every other state? $25K each?

      What's that you say? You don't know? Or are you just saying that it's not only right but expected for companies to give small "thank you" kickbacks after being given a lot of business?

      I hope you're just uninformed and not actually idiotic enough to be saying the latter. Because $25K for $95M might not sound like a lot, but how many billions are in the Californian budget? How quickly could a bunch of $25K kickbacks add up? Go inform yourself, and let us know, will you?

      • Re:the donation is not a smoking gun (Score:4, Informative)

        by jonbrewer ( 11894 ) on Tuesday May 07, 2002 @09:29AM (#3477032) Homepage
        "
        Inform us then, how much did Oracle donate the the Republican candidate in California? And to every candidate in every other state? $25K each?"
        You might consider doing a little quick research [google.com] on donations from Oracle to both republican and democratic candidates. I certainly won't convince you with anything I say, so find out for yourself.

        It's common for corporations to donate to candidates from both parties.
            • Inform us then, how much did Oracle donate the the Republican candidate in California? And to every candidate in every other state? $25K each?"
            You might consider doing a little quick research [google.com] on donations from Oracle to both republican and democratic candidates

          Ah, the quick google link ploy. Always looks very informative, that. Unfortunately, none of the top ten hits from the link you provided actually answer the question I posed, and neither does your trite truism about bipartisan donations. Care to try again?

      • > Or are you just saying that it's not only right but expected for companies to give small "thank you" kickbacks after being given a lot of business?

        It may not be right, but it's certainly expected in California.

    • Not really. I was watching a sting operation on corrupt CA government officials.

      Need a law created that greatly favors your company? Write it out, meet your representative and for a few thousand dollars, you've got a deal!

    • But that's the beauty of lobbying the government! You make "donations" in the $1000s to influence purchases in the millions. Talk about a return on investment!

      Its naive to think this doesn't or wouldn't happen. One, the temptation is just too big (spend a thousand, get a million). Two, who's going to prove it? Even if there are strings attached to the money, which would be illegal, its very easy to say publicly that there weren't. Three, read the papers lately? There is allegation after allegation of this stuff happening. From this mess, to Enron and the Bush administration, to Clinton and pardons, and to every congressional member and their pork projects.

      Bottom line: Elected officials carry an enormous amount of power and responsibility when compared to how much they are paid legally. That's a recipe for bribery and for attracting those willing to be bribed.

      This is what campaign finance reform is supposed to fix. But I don't support it; I don't think any amount of campaign finance reform will fix the situation. You need to motivate officials to be honest. I don't know how to do that, but I'm certain adding more rules won't. Until someone comes up with something better, I would rather keep my "freedom of speech".

      • here's how (Score:2, Insightful)

        by ChristTrekker ( 91442 )
        This is what campaign finance reform is supposed to fix. But I don't support it; I don't think any amount of campaign finance reform will fix the situation.
        You need to motivate officials to be honest. I don't know how to do that, but I'm certain adding more rules won't. Until someone comes up with something better, I would rather keep my "freedom of speech".

        Here's how you do it. Don't reform campaign finance. That's a red herring, and as you said, it's a free speech issue. Reform the electoral process. Motivate officials to be honest by making the possibility of being voted out a real threat. In the US House, incumbents are reelected like 98% of the time. That's insane.

        The system needs to be opened up to challengers, to new ideas, new faces. Right now the Duopoly makes the election laws, so it's not surprising they favor incumbents. Nobody but a Democrat or Republican has a chance, and this is by design.

        Freedom of conscience must be restored. If you can't safely vote how you truly feel, then the system is fundamentally flawed. The "wasted vote" problem must be eliminated.

        To do this, we must realize that plurality voting is broken, and Condorcet voting [eskimo.com] must be implemented. It is the only system that is proven to be strategy free and truly express the preferences of the electorate.

        Additionally, in presidential elections, the EC votes should not be allocated on a winner-take-all basis, but by district as intended. (You thought the correlation between EC votes and members of Congress was coincidence?)

        Work locally. Get active in a minor political party, it doesn't matter which one. In this area (election reform), most have the same goal — fairness. Get these reforms in county and state government. Run for office, and ask why your RepuDem opponents haven't implemented fair voting yet. Educate the electorate about the deficiencies of the system, and how Condorcet is fair to everyone.

  • Where's the money going now? (Score:3, Interesting)

    by foniksonik ( 573572 ) on Tuesday May 07, 2002 @07:49AM (#3476383) Homepage Journal
    I live in CA and I'm curious about where that money will now go. Back to the treasury? It's already been budgeted... maybe we could invest in some Savings and Loans project?

    Well, this should all be quite humorous.
  • a plan comes together. Politicians getting caught red handed by the media and the citizens. This is how it's supposed to work folks! :)
  • $25,000 is A LOT to give any politician from a single company, ESPECIALY at the state level.

    I mean govonerships are won with less that 5 million dollors, and most of the time I bet it is less that 2 million.
    • $25,000 is A LOT to give any politician from a single company, ESPECIALY at the state level.

      I mean govonerships are won with less that 5 million dollors, and most of the time I bet it is less that 2 million.

      You're either from a small state or misinformed. Tony Sanchez raised over $18 million just for the primary election to win the Democratic spot on Texas' gubernatorial ballot this Fall. Large portions of it were self-financed or raised from his banker friends.

      Marty Akins raised $2.975 million for his bid for the Democratic spot for State Comptroller in the primaries. If you live in a large state, you'll see large-scale campaign spending is the norm, and that $25,000 would be less than 1% in the Comptroller's race and around .001% in the Governor's race.
    • Gray Davis' total campaign warchest is over $35 million, and he's actively seeking out more at all times.

      California has some of the nation's most expensive media markets, and a population that's not terribly enthused about politics.

      As a result, heavy advertising is the name of the game - and it's expensive to the extreme.

      D
  • Our politicians are crooked because all of them are funded by corporations who do their bidding.
    And our corporations are crooked because all of them are backed by politicians who do their bidding.

    Sounds like we need some fundamental changes in our financial policy.

    -Evan
    • ...this is why many people advocate public funding of political campaigns. There is the free speach argument...but I hear they are making weapons out of high-enegry sound waves...like anything...where do you draw the line.
    • It's _OUR_ faults. We're the ones that keep reelecting these crooks. The general public is apathetic and doesn't care to spend any time researching candidates. Instead, they'll get all the information they need from commercials. Heck, we elected a president that in no way, shape, or form has hidden his ownership by corporate America at any time in the past or present. If we want to change our country for the better, _WE_ have to do something about it instead of sitting back and blaming someone else.
    • ..uh, I think you meant to say we need changes in our "political fundraising policy". A change in our 'financial policy' would be interest rate or money supply driven.
    • Really going out on a limb there. "I've said it before and I'll say it again"? Hell, EVERYONE'S been saying that for the past 200 years, you really think you're fighting the power?
    • Depends on what you call a "corporation." Citizens' groups like the NRA also make campaign contributions. It's actually a nice part of democracy.
  • Back in mid-April, the state of California bought $95M worth of Oracle software, which turned out to include more licenses than the state has employees, at a taxpayer cost of $41M more than necessary.

    I'm just waiting for the inevitable SPA Audit [spa.org].
  • To quote Typing of the Dead:

    "How could anyone do this?"

    graspee

  • It would be interesting to know what exactly were they supposed to license and if there are competetitive OSS replacement available. $95 million is a lot of money. And if you could save this by taking a collection of opensource solution instead, maybe paying just $20 million for product support (which might have be included in the Oracle deal licenses)...

    I mean, sincerely they must also have some real need for the licenses, some company should recognise this great change to make big money using OSS derivates and support. With all the fuss in the air, the climate could be perfect to hit using OSS artillery and reasoning.
    • Name 1 OSS database that compares to Oracle in features and power. Some organizations actually need the features that are only provided by products like Oracle, SQL Server or other high end relational databases.
      • "Name 1 OSS database that compares to Oracle in features and power. Some organizations actually need the features that are only provided by products like Oracle, SQL Server or other high end relational databases."

        I will not argue with you, because you are absolutely correct.
        But 95% of all organizations would get along just fine with MySQL.
        • Is that before or after they need to execute their disaster recovery plan?

  • What does the number of employees have to do with the number of licenses? The last time I checked, Oracle was licensed on a per server basis, not on who uses it...

    Also, I'm going to assume that there are far fewer servers in the CA gov't than there are employees, and if so, then someone made a made a REALLY big error in budgeting. Of course, we are the country that paid $43,000 for a screwdriver and that sort of thing, so who knows?
    • Oracle Applications
    • What does the number of employees have to do with the number of licenses? The last time I checked, Oracle was licensed on a per server basis, not on who uses it...

      I'd imagine that when you're a state government, normal pricing rules don't apply :)

  • I thought it was highly amusing that when I went to the news story, the article was carrying an Oracle advert. Refresh the page a few times if you don't see it first time.
  • Well, I guess if Oracle had plans to construct the "Big Brother" database for the USA, then this'll certainly hurt. Hmm.. wonder what would happen if the database was open source? Running the nation's biggest information repository on MySQL.. would that be a good thing or a bad thing?

    ok, ok.. offtopic

  • Yikes. Every time I get a call from my father suggesting Oracle stock, I procrastinate, and they take another hit. It's getting like Qwest with these people. It's a tempting buy, but...where's the bottom, already?
  • Gray Davis, or whomever is really behind this, will get off. The little guy who accepted the contribution might take a fall. Inevitably, there will be a smoke/mirrors show, until the media has determined its no longer viable as a story, then Davis will get re-elected, etc.

    Hell, anyone remember Chandra Levy? You can get away with murder (no pun intended) in this country as long as you keep quiet when the Sh*t hits the fan, lay low, then quietly pretend it didn't happen.
  • So:

    Huge corporate donation after state gives same corporation business is a crime.

    Huge corporate donation before state gives same corporation business is okay.

    Makes sense to me.
    • It depends...

      If you're a yooge company about to go bankrupt, you can donate all you want to a republican presidential candidate.

      If you're a fairly large software company that's still solvent, you can't donate any money at all to democrats. Or if you do, you're suddenly under investigation.

  • Oracle arrogance (Score:2, Interesting)

    by totallygeek ( 263191 )
    I side with Oracle on the contribution. All companies make contributions to political fundraisings. This is nothing new or unethical. What I find striking is the statement made by Oracle that $95 million won't affect anything because it is less than one percent of their money for this year. What ass for a company says, "$95 mil, no problem", or something to the similar?


    That is just Ellison arrogance that has trickled down to people under him.

    • No that's Oracle trying not to panic its stock holders.

    • Re:Oracle arrogance (Score:4, Insightful)

      by joss ( 1346 ) on Tuesday May 07, 2002 @09:25AM (#3477013) Homepage
      > All companies make contributions to political fundraisings. This is nothing new or unethical.

      It's not very new, but I don't think it's ethical.

      A company is legally obliged to maximize shareholder profit. This means that it is effectively illegal for a company to make a decision on ethical grounds. For the donation to be legal anything, they must have reasonable grounds to believe they are getting somthing in return.

      The argument that money is speech is rather preposterous, but even if one buys it, it doesn't make corporate political donations OK. If companies had the same constraints, eg if they could be jailed or executed, then maybe they would deserve the same rights as individuals.

      http://www.corporatewatch.org/pages/corporations .h tml
  • Yes, the blonde who was responsible for reviewing the contract did not read it. She admitted yesterday she was pressured and did not have time to read it.

    Umm lets see, hey boss man I dont have time to turn the cooling on for reactor 9 the guys are pressuring me to go play poker!
  • Ellison gets bad press for being big brother [slashdot.org], IBM pulling ahead of Oracle [com.com], and now this. It's good to see some other players get ahead in the market. I never much cared for Oracle software. Ok, Microsoft is evil blah blah, but I think SQL Server's management tools are pretty swell. Alas, SQL Server only comes on Windows.

    Then again, SQL*Plus is pretty cool ;)

  • Sales Tax - OUCH! (Score:5, Interesting)

    by phoenix26x ( 245359 ) on Tuesday May 07, 2002 @08:19AM (#3476541) Homepage
    $3 million in sales tax? Ouch! Wait a minute... a $95 million dollar deal, and only $3 million in sales tax? Since when did California's sales tax drop from 7.25% to ~3%?

    To be on topic: this deal was fishy on many fronts:
    • More Oracle licenses than state workers
    • Not just a third party (Logicon), but a fourth party (Koch Financial Services) was involved
    • The contract was signed last May, but the software is still not in use. You spent $95 million to sit on software licenses?
    • Finally, the sales tax issue already mentioned
    We can only hope that $95 million dollars worth of state officials are ousted.
    • and why is sales tax being paid on something that is being sold to the State of California? Do most states charges themselves sales tax (or allow municipal sales taxes to apply to their purchases)?

      I seem to recall most governmental agencies I've dealt with not paying it, but I'm not from California.
      • CA isn't charging itself state sales tax. Logicon, the company which directly sold the licenses to CA is charging them sales tax. They have to pay the sales tax, regardless of the customer, so why shouldn't they charge the state to recover their expenses?

        Eric
        • Actually in most states purchases by a government (or government agency like schools, offices, and the like) are tax exempt. And all logicon has to do is document the sale to them and their proof that the buyer is tax exempt (usually just the tax exempt number).
        • They have to pay the sales tax, regardless of the customer, so why shouldn't they charge the state to recover their expenses?

          Uhhh, no. The State has an exemption from paying taxes to itself. Every government agency I've worked for had an exemption number that deleted the sales tax. Many non-profits have this deal exteneded to them as well.

          This whole deal reeks of either incompetence or fraud. Maybe a mixture of the two.

  • Since the state bought them, they are theirs. I wonder if Oracles EULA would permit resale of the excess. I would be willing to pay Cali 10 cents on the dollar or less for a Oracle license. They could put them up on Ebay....

  • This SHOULD be easy... (Score:5, Funny)

    by preed-man ( 1796 ) on Tuesday May 07, 2002 @08:21AM (#3476551) Homepage

    "It's a complicated legal and financial undertaking," Maviglio said, adding that the talks to completely undo the contract could take several weeks. "There are some parts that have already moved forward. We're trying to unwind the whole thing."

    You mean, they can't just issue a ROLLBACK?

    What the hell were they paying Oracle for, then?!
  • >>The state's negotiators were no match for the professionals at Oracle, according to a state auditor's report, which highlighted several aspects of the contract that it found objectionable. For example, the report noted that the six-year term was unusually long in an industry with rapidly changing technology, that the state wasn't protected in the event Oracle lowered its prices and that the purchase price didn't include software upgrades.

    Wow, I know that government agencies can get stooped over on large contracts with technology vendors, but god, I'm honestly shocked that that deal got pushed through, normally theres multiple "sign offs".....nobody, NOBODY saw that this was a shaky deal?? LOL Especially for the price tag involved
  • I'm not much of a political activist but sometimes I feel that way more and more. Is it a sign of age?

    Corporations in many respects are legally a 'person.' (Maybe that's the best argument against the splitting of Microsoft... but then again, maybe Bill Gates should be drawn and quartered...) But the similarities end when accountability is the issue. Everyone starts pointing fingers in a system where you're innocent until proven guilty (but only when you have an effective attorney) a lot of the time, the real guilty people go free.

    (Corporations == identity shelters?)

    But the problem is that these entities are giving money to politicians to support their interests. That just seems inherently wrong. What point of view (seriously, I ask) could spin this situation in a positive way? The leaders of our country should be focused on the good of the whole nation without particular parties attempting to muscle their influence at the cost of others in various ways. Okay, I speak in ideals here and I guess that's not very reasonable, but there was a time when our leaders weren't paid and acted for the priviledge of leading our people to success and freedom. Now they're paid...voting themselves raises, converting their campaign funds into cash when they retire.

    It's out of control.
  • Could Oracle Deal Put Simon Back On The Map?
    San Francisco Chronicle's Marinucci reports, Davis has run into "what Republicans hope will become the 'perfect storm' of campaign issues" for Simon. At issue is a $95M no-bid deal Oracle Corp. signed with the state that "could cost taxpayers $41 million" in "unnecessary charges." Making matters worse: a $25K campaign contribution from Oracle to Davis "handed over" to a Davis adviser "in a bar while the contract was being negotiated last spring." Making matters even worse: Reports of shredding of documents related to the contract by "state bureaucrats." The news found Simon "seizing the offensive for the first time," charging in a presser that "the scent of scandal surrounding this administration is growing." Although AG Bill Lockyer (D) is investigating, Simon said "more needed to be done." Simon: The dots are starting to be connected, and they paint a very troubling picture. Californians have a right and a need to know ... if their tax dollars are being wasted through gross incompetence -- or worse, being used to facilitate corruption."
    Davis denied "allegations of impropriety, saying he did not know of the Oracle deal or the company's campaign contribution." And the "top three" Davis admin. officials "in charge of the contract have resigned, been fired or placed on suspension" (5/5).

    About That Donation
    The Davis camp "reported receiving a $25,000 donation from Oracle" 6/5/01, "Days after the contract was finalized. But Arun Baheti, the governor's director of e-government, told top Davis aides that he accepted the $25,000 check from an Oracle lobbyists before the negotiations were complete and mailed it to the campaign. The check had a March date." An Oracle spokesperson said the donation came from an April tech event "hosted by Davis that was attended by roughly 30 companies." Oracle said delivery of the check was "apparently delayed" and was "unrelated to the state contract" (Bustillo/Tamaki, Los Angeles Times, 5/6).

    Just The Beginning? Or Going Nowhere?
    Observers say the Oracle deal "could reinforce reservations that voters have expressed about Davis' fund-raising practices." GOP strategist Dan Schnur: "This Oracle mess is taking place in the middle of a budget crisis. It's easy to see how tens of millions in wasted money could have been spent on programs that Davis is cutting." And Simon -- to GOPers "glee -- made exactly that point when he lambasted the governor." Simon: "The money wasted on this Oracle contract could have paid for thousands of teachers, textbooks or lunches for needy children."
    Berkeley prof. Bruce Cain said the Oracle story "shifts the media's attention from Simon's recent gaffes on such issues as whether he paid state taxes to the growing Oracle scandal." Cain: "[It] allowed him to go on the offense ... and takes Gray Davis off message. At a minimum, this is a godsend [to Simon]."
    Simon's aggressive stance "coincides with a decision to reach out to some seasoned political operatives with track records on aggressive campaigns." Simon has hired ex-Gov. Pete Wilson (R) spokesperson Sean Walsh; ex-spokesperson for Sec/State Bill Jones (R), Rob Lapsley; and researcher Mark Bogetich -- "a team that with little money, landed the toughest punches on Davis through the primary."
    Walsh: "Every time that reporters and other people are turning over rocks, there are a lot of cockroaches running -- and they're all running for the center of the Capitol. And I see Bill Simon holding a big can of Raid" (Marinucci, San Francisco Chronicle, 5/5).
    Said Schnur "after highway patrol officers descended on state offices" 5/2 to "prevent document destruction, no politician likes to see his name in the same headline as the word 'shredder'" (Chance, Sacramento Bee, 5/5).
    NRCC Chair Rep. Tom Davis: "Gray Davis is in bad shape in terms of his personal popularity and voters wanting a change. But whether Simon's the guy to do it or not, we'll have to see" ("Capital Gang," CNN, 5/4).

    Simon Dying To Get To This Guy ...
    Simon said he "wants to see" Davis manager Garry South "on the witness stand regarding the timing of the $25,000 contribution," an idea Joint Legislative Audit Cmte chair Dean Florez (D) "quickly dismissed as ridiculous and politically motivated" (Bustillo/Tamaki, Los Angeles Times, 5/6).

    Davis Offers His Take
    Davis said his admin "has opened talks to scrap" the $95M deal with Oracle, "which he insisted was approved without his knowledge. He also took credit for removing three state officials who promoted or signed off on the much-criticized deal." Davis: "I had no idea this contract was being negotiated. I think most of you know I'm barely on the information on-ramp, much less proficient in technology. So this is not a matter that would normally come to my attention, nor did it." Davis "acknowledged his reputation for keeping a tight reign on his" admin., but "said he only micro-manages 'what's on my plate'" (Sweeney, Copley News Service, 5/4).

    What Will The Leg. Do?
    Capitol Dems were placed in a "precarious position" by the news of the Oracle deal, "requiring them to react forcefully or face" GOP "criticisms that they are protecting their governor." GOPers have "already asked the federal government to conduct its own Oracle investigation, arguing that" Lockyer, "whom Davis asked to investigate the matter, cannot be impartial because he accepted $50,000 from the software maker in recent months." State Sen. Ray Haynes (R): "If they pursue this with the same vigor they pursued [former Insurance Commissioner Chuck] Quackenbush [R], I think we could compliment them and say they did good work, If they don't, then we go through a partisan drill that is nothing more than window dressing. That's going to be the test" (Bustillo/Tamaki, Los Angeles Times, 5/6).
    The cmte today will take testimony from "key administration witnesses" (Chance, Sacramento Bee, 5/5).

    No Surprise, Oracle Very Influential
    San Francisco Chronicle's Salladay reports, Oracle has worked had to channel "its major campaign contributions to a select few" CA pols "wielding the most power over its livelihood." Almost "every elected official" who has received money from Oracle "has some measure of control over Oracle government business, or held influence over the $95 million software contract that has embarrassed the company" and Davis. Davis and Oracle are now working together to "cancel the contract" (5/6).
    State Cabinet Sec. Susan Kennedy: "If somebody comes to you and says, 'I need something and it has to be right now,' the answer is 'No.'" Kennedy said she broke that "cardinal rule" when she put her signature on a "governor's action request" (GAR) that "gave the green light for the apparently overpriced software contract with Oracle Corp." Kennedy was presented with the GAR 5/31, the "three-page memo concluded" with a sense of "urgency, emphasizing 'the short window of opportunity.'" The "state fell for it and immediately signed" the deal. Kennedy said she "assumed all the advertised benefits had been checked out -- or would be -- by the other GAR signatories. They weren't" (Skelton, Los Angeles Times, 5/6).
  • See, Microsoft isn't the only greedy software company out there!

    I wouldn't blame Oracle entirely. I work for a state government and we have to justify every penny.

    There was someone asleep at the switch on this one. It's a deal similar to the 800 hours of AOL for only $10 more than the 700 hour deal.

  • GOP making hay, but it may not be Davis' fault (Score:4, Informative)

    by gdyas ( 240438 ) on Tuesday May 07, 2002 @11:22AM (#3477792) Homepage

    Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made...

    This is true, but misleading, because the money was received by the head of the Dep't of Information Technology, not Davis himself, nor his campaign fund directly. The contract appears to have been completely mishandled, and perhaps manipulated, by the governor's cabinet, the CA Dep't of Information Technology, and its head, Elias Cortez, who's already been suspended pending the current investigations. Cabinet secretaries involved have already resigned, embarassed at their lack of proper review of the contract. There appears to be some malfeasance on the part of software advisors to the state who made money on the deal, and $25K & $50K campaign checks that've been making the rounds to one & all. It's all available in the latest article [latimes.com] on the deal. All in all a dirty deal, but I don't see where Davis, even though he was the Governor, could have had any precognition of the stupidity going on in the lower halls of the government before the deal was completed.

    Despite GOP willingness to paint with as broad a brush as possible in an election year, Davis appears not to have known much about the deal until it hit the news, about when /. first reported it. Since then, it's been his own office working with the Assembly that've sought to find out what happened.

    Think about it. The Governor does not personally handle or approve all software purchases, nor should he. There appears to be quite a bit of crooked behavior on the part of Oracle and the leaders of the CA Dep't of IT, as well as a lack of proper review by those overseeing the department, and Davis is looking into it with the Assembly. If anyone finds evidence that Davis was a part of the deal then sure, nail his ass to the wall, but don't make insinuations there's no evidence for. That just cheapens the discussion, and ignores the fact that it is Davis who began the investigations, Davis who sent in the CA Highway Patrol to stop document shredding at the Dep't of IT, and Davis who's asked for and received the resignations of 3 top cabinet officials for failing to do a proper review of the deal. I don't mind disagreeing on political issues, but corruption in the governor's chair is a serious charge that requires more than non-evidence.

    Oh, and his opponent, Bill Simon, saying that the oracle deal takes food out of the mouths of children is rich. This guy wants to gut children's services, make abortion illegal, and stop state tracking of all racial data regarding education, health care, etc. I guess if you don't want to solve a problem, you start by ignoring it.

  • Former (thankfully) Atlanta Mayor Bill Campbell recieved donations from Oracle as well, then had Spectronics purchase spend millions of dollars of Oracle software to be used at the Atlanta airport. The deal was put together by an associate of Campbell's who took money from Spectronics. Spectronics also gave Campbell money for his campaign, laundering it through a drug treatment center. Spectronics was rewarded when the city forced MediaOne to resolve a legal dispute with the company. Spectronics also received money from the city for setting up the Oracle deal - but an audit team was never able to find the Oracle software Spectronics was paid to buy. Most of the Spectronics executives were convicted of fraud, as were a lot of the mayor's employees, but the mayor himself charged the world with being racist and escaped without a scratch. Oracle was not charged with any crimes either, but I'm not personally sure the company is entirely innocent.

    Also see Online Athens [onlineathens.com] and Creative Loafing [creativeloafing.com].

  • If you buy $95 Million dollars worth of my product, I will donate alot more than $25,000 to your campaign/cause.

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