Official Describes Rush to OK $95-Million Oracle Pact

SACRAMENTO -- California lawmakers questioned the state’s $95-million computer contract with Oracle Corp. on Monday, hearing testimony from an assortment of officials about how the state wound up making a massive software purchase with no competitive bidding and little study of whether it was needed.

Cynthia Curry, a top attorney for the Department of General Services, one of the state agencies that approved the deal, told lawmakers that she was given the full Oracle contract to review the day it was signed, and was so concerned about it that she went over the head of her boss to complain.

After the deal was signed, she recalled, General Services Director Barry Keene got a call from Gov. Gray Davis’ Cabinet secretary, Susan Kennedy, to congratulate his “can-do agency” for getting the deal done. Keene has since resigned, saying he should have scrutinized the deal more closely.

“I haven’t seen a contract that had so many people pushing for it in higher government,” Curry said. However, she later added, “Nobody told me Gov. Davis loves this contract or anything like that.” And the head of the State and Consumer Services Agency, where Curry said she complained to another lawyer, said she never heard of Curry’s concerns.

Deborah Fraga-Decker, a former deputy in the Department of Information Technology, the office at the center of the controversial deal, told lawmakers she did not know that a consultant she helped hire to advise the state on large-scale software deals later made $28million on the Oracle contract until reading it in the newspaper. The consultant, Logicon Inc., which now goes by the name of its parent company Northrop Grumman, never completed its consulting work for the state and was never compensated.

And Deputy Finance Director Betty Yee testified that although her department continued to have concerns about the contract until the signing, it ultimately went along with the deal.

Monday’s highly anticipated hearing started sluggishly, with lawmakers debating the authority of their panel to fully investigate the issue. A state audit found last month that state officials approved the Oracle pact largely on an estimate from Logicon that it would save the state up to $111 million, but auditors said the state never independently verified that estimate, and they concluded the deal would cost the state up to $41 million more than if it had never happened.

Republican lawmakers would like the probe to extend to the governor’s office following revelations that an Oracle lobbyist gave a $25,000 campaign contribution meant for Davis to an administration official days after the deal was signed. On Monday, the Republicans demanded a sweeping list of information, from e-mails and video to documents and memos. The request struck some Democrats as overly broad.

Sen. Steve Peace (D-El Cajon), in turn, publicly asked that the review be followed to its full conclusion, regardless of whether it loses its political sex appeal as the details become more mundane and bureaucratic.

“Because the focus is on politics,” lawmakers often “miss the far more serious issue of corruption, which I think is endemic in this state,” Peace said.

A number of other top officials were expected to testify Monday evening, including Department of Information Technology Director Elias Cortez, who was suspended by Davis last week as details of the deal unfolded. Also expected to testify was Debbie Leibrock, the chief of a Finance Department team that reviews technology investments and warned that state officials never examined Logicon’s savings claims.

Cortez took copious notes while watching the testimony. In an interview, he defended the type of agreement the state signed with Oracle as a good way to save taxpayers money on software, but conceded that California’s first attempt at such a contract could have been better handled.

“It’s obviously a learning situation for everybody,” he said.

Cortez also denied he had ordered any documents shredded at the Department of Information Technology. Davis dispatched the California Highway Patrol to that office last week after reports of shredding.