Fiscal Chief Faces Oracle Panel

SACRAMENTO -- The state’s budget chief is next up as the Legislature’s hearings on the Oracle contract continue this week in an attempt to answer questions about the potentially costly deal.

Tim Gage, Gov. Gray Davis’ director of finance, will be questioned today about why the state didn’t verify Oracle’s claims of big savings before it signed the $95-million no-bid agreement.

“Tim Gage said, ‘Sometimes we don’t make the rules’ and OKd the deal,” said Assemblyman Dean Florez (D-Shafter), chairman of the Joint Legislative Audit Committee. “We’re interested in figuring out that if we don’t make the rules, who does?”

The contract was supposed to save California up to $111 million through volume purchasing and maintenance of database software. But the state auditor says the deal could end up costing up to $41 million more than if the state had kept its previous software supply arrangements.

Oracle, a Redwood Shores-based company, is sharply critical of the auditor’s analysis and defends the contract as a great deal for the state.

The committee has already taken 67 hours of testimony on the Oracle deal and other state contracts, and plans up to five more hearings, two this week and three the next.

Florez told Assembly Speaker Herb Wesson (D-Culver City) last week that he plans to wrap up the hearings June 13. But Republicans say the panel should be ready to hold even more hearings.

“We believe it more important to provide taxpayers and all interested parties [with] an inquiry that is thorough, fair and objective, rather than one that is incomplete, partisan and biased due to an unnecessary deadline,” six GOP committee members said in a letter to Florez and Wesson.

Florez said June 13 isn’t a firm deadline, but that the committee needs to finish its work sometime soon to allow Atty. Gen. Bill Lockyer to complete his investigation of the contract.

“Sure [the Republicans] would like this to go on through next year, but we are an oversight committee, not the A.G.’s office,” Florez said.

Nathan Barankin, a spokesman for Lockyer, said that completion of the committee’s work would remove “some impediments” for the attorney general. “It’s inevitable that anytime there are overlapping investigations occurring that you can run into scheduling conflicts while you’re trying to interview relevant individuals,” he said.

On Wednesday, the committee is scheduled to hear from State Auditor Elaine Howel and one of her predecessors, Kurt Sjoberg, who did an analysis for Oracle that supported the company’s position.

“It’s the battle of the auditors, past and present,” Florez said.

Oracle representatives complained angrily before the Sjoberg appearance was announced that their testimony kept getting put off and that Florez didn’t plan to let them really present their side of the story.

“We think this [the Howel-Sjoberg confrontation] should have been the first hearing,” said Oracle spokesman Jim Finn. “We hope this hearing actually occurs.”