Tech Czar Pleads Ignorance on Oracle Pact

In sometimes tearful testimony that lawmakers called inconsistent, the suspended director of the state Department of Information Technology said he was “out of the loop” on many aspects of the state’s $95-million Oracle Corp. software contract.

In an evening round of Monday’s legislative inquiry that stretched until early Tuesday morning, Director Elias Cortez blamed other departments for failing to check out contract details, expressed ignorance about the contract’s complicated financing and was overcome with tears when asked to describe how he had been suspended last week by Gov. Gray Davis.

Although e-mails and the testimony of other state officials portray Cortez as a promoter of the unusual volume-licensing Oracle contract, Cortez expressed ignorance of key aspects. He told lawmakers as he leafed through documents at the hearing, “This is the first time I’ve ever seen this contract.”

Members of the Joint Legislative Audit Committee said they were skeptical of Cortez’s answers.

“Part of the reason why there’s suspicion is that your answers haven’t always been consistent,” Sen. Steve Peace (D-El Cajon) told Cortez as the hearing ended at 1:30 a.m. “Some of what you’ve said today doesn’t match up exactly.

“I would hope,” Peace said, “that between now and Monday you get your story straight.”

Hearings resume Monday with witnesses that include Department of General Services officials who helped negotiate the contract and a Department of Finance analyst who warned against it.

Cortez was suspended Thursday, the same day that Davis sent California Highway Patrol officers to Department of Information Technology headquarters based on an anonymous tip about document shredding.

Cortez denied that he shredded or ordered any documents destroyed. He said he got the call from Davis’ chief of staff that he had been suspended with pay--$123,000 a year--as he was getting a heart test at his doctor’s office.

The Oracle contract, signed by the Department of General Services last May 31, was initially hailed as an innovative way to save the state more than $100 million on purchases of computer database software. The deal authorizes the state to use many kinds of Oracle software for many users at once.

In a highly critical report issued last month, the state auditor concluded that the contract could cost the state $6 million to $41 million more than it would spend otherwise. The audit described a lack of scrutiny as the no-bid contract was rushed through the state bureaucracy to meet an Oracle-imposed deadline.

There are strong political overtones to the flap. Oracle gave the Democratic governor a $25,000 contribution days after the contract was signed. Davis has said he had no knowledge of the contract, but his deputy chief of staff, Susan Kennedy, approved a summary of the contract.

On Monday, the Legislative Audit Committee questioned Davis staff member Kari Dohn about May 23 e-mails among Department of Finance employees regarding Dohn’s need for more contract information so she could explain it to the governor.

Dohn told lawmakers that she never briefed the governor about the deal, and that Arun Baheti, the governor’s director of e-government, told her he would take the lead on the Oracle agreement.

Baheti resigned last week after acknowledging that he had accepted the $25,000 check from an Oracle lobbyist in a downtown Sacramento restaurant, a violation of the governor’s rule that staffers avoid political fund-raising. Department of General Services Director Barry Keene resigned April 26, saying he made “a poor decision” in backing the contract.

At a news conference in Santa Barbara on Tuesday, Republican candidate for governor Bill Simon Jr. called on Davis to terminate Cortez.

“What is clear is that this scandal goes right into the governor’s office and directly involves the governor’s most senior advisors and appointees,” Simon said. “What is equally clear is that additional hearings are necessary and that the Legislature and other law enforcement entities should leave no stone unturned.”

Some of Cortez’s testimony was challenged Tuesday by others familiar with his department.

Under questioning by lawmakers, Cortez said that when he was hired by Davis to run the department in February 1999 he reported to Vince Hall, the governor’s staff director, and to David Lema, a private consultant hired to help the state adjust its computer systems for the year 2000 calendar change.

Cortez said that in late 1999, he learned that Lema and Hall were starting a private technology business together. Cortez said he had ethical concerns about the arrangement, so he asked Lema to move out of the department’s headquarters.

But Cortez did not cancel Lema’s contract, he said, because he needed his Y2K expertise.

Both Lema and Hall, a Democrat running for the Assembly in San Diego County, disputed Cortez’s testimony. They said Lema left the department’s offices because there wasn’t enough room.

Hall formed a dot-com business after he quit Davis’ staff in November 1999, he said. Lema became an unpaid advisor to the company after his consulting contract with the state ended in January 2001.

Hall dissolved the company in late 2001, he said.