2 State Officials Linked to DMV Snafu Are Reassigned

Two high-ranking state officials who refused to testify under oath about their involvement in a $44-million DMV computer project snafu have been transferred to non-computer duties, it was learned Friday.

The reassignments come as the state auditor is preparing an investigation of the computer project failure and as the Sacramento County district attorney’s office decides whether to conduct an investigation of possible criminal conduct.

The state officials, Steve Kolodney and Dennis Walker, refused to testify under oath May 16 at a hearing of the Assembly Transportation Committee into how and why $44 million could have been invested over the past seven years in a Department of Motor Vehicles computer modernization project that does not work.

A spokesman for Gov. Pete Wilson, who has joined the Legislature in asking for the state auditor’s investigation, on Friday called the transfers “personnel actions on which we’d rather not comment.”

Officials said Kolodney, director of the state Office of Information Technology, asked for and received reassignment Wednesday pending outcome of the auditor’s investigation.

Walker, a computer supervisor in the Department of Social Services, was permanently transferred Monday to a division that licenses community service agencies. Spokeswoman Amy Albright said the transfer was a mutual decision by Walker and his superiors and was “related to the cloud hanging over the DMV project.”

Department of Finance spokesman H.D. Palmer said Kolodney asked for reassignment because of a “series of questions and reviews.” Palmer said Kolodney’s new duty will be to write a report recommending how the state should recruit and retain “top-flight” executives for its high-tech information operations.

Neither Kolodney, who is paid $86,696 a year, nor Walker, a civil servant who receives $78,228, took a cut in pay, officials said.

As chief of the Social Services Department’s computer bureau, Walker had been in charge of managing a proposed automated information system whose development costs are estimated at $800 million.

As the veteran director of the Office of Information Technology, Kolodney, a gubernatorial appointee, was the top official in charge of state government’s expanding computer operations.

In the late 1980s, Walker managed the ill-fated DMV project, a pioneering effort aimed at transferring driver’s license, motor vehicle and other information from antiquated databases to forms that would meet modern demands.

He left the DMV and joined Tandem Computers Inc. in 1990, shortly before Tandem received a $11.9-million no-bid contract to provide computer hardware for the DMV project. He returned to the state payroll early in 1992 at the Department of Social Services.

Kolodney, whose office gave approval for the DMV to move ahead with the project, left his government post in 1989 and became an investor in a computer consulting company that did business with state agencies. He returned to his government position in 1991 and told the state Fair Political Practices Commission that he had no conflict of interest, although he continued to hold stock in the consulting company.

At the Assembly Transportation Committee hearing, the two men refused to testify under oath about their roles in the DMV project. Chairman Richard Katz (D-Sylmar) asked the Sacramento district attorney to investigate whether they violated “revolving door” and conflict-of-interest laws.