California lawmaker and Oracle at odds over software investigation

California lawmaker and Oracle at odds over software investigation

Over the past few days, a senior Oracle Corp. official and a California lawmaker have swapped barbs concerning the disputed $95 million software contract between the company and the state.

In a letter to Assemblyman Dean Florez, chairman of the Joint Legislative Audit Committee, Oracle questioned the Legislature's handling of an investigation into the licensing deal, which the company negotiated with California in May of last year.

Oracle officials said that on Friday they hand-delivered the letter, which called the committee's actions punitive and driven by a desire to gain media attention.

In a reply letter to Oracle chief executive officer Larry Ellison, Florez said he had yet to receive the actual letter, although he had downloaded an online version posted on the company's Web site, at www.oracle.com/california/05-31-02_Florez.doc. 'Put plainly, this is discourteous and unprofessional conduct,' Florez said. He called the Oracle letter 'a disappointing diatribe intertwined with desperate personal attacks and innuendo.'

Oracle's letter registered the company's dissatisfaction with the way the committee has overseen its inquiry into the company's enterprise license agreement (ELA) with the state and the committee's reliance on the findings of a Bureau of State Audits report [see story at www.gcn.com/21_11/news/18682-1.html].

Signed by Oracle chief financial officer Jeffrey O. Henley, the letter said Oracle "has not been given a single opportunity to defend itself against the baseless allegations in the BSA report relating to the value of the ELA."

In his letter to Ellison, Florez called the contention 'utter nonsense.' He noted that Oracle defended itself in a May 14 San Francisco Chronicle article, 'In Defense of the Oracle Deal,' by Oracle consultant and former California state auditor Kurt Sjoberg.

Florez also defended the findings in the BSA report, calling them 'firmly rooted in meticulous documentation, analysis and data from your own company.'

In its letter, Oracle made multiple complaints:

  • The company questioned the continued postponement of hearings at which Oracle officials are slated to testify. State officials testified last month. Five Oracle employees were to appear today before the committee. They now are set to testify June 11 and 12.

    "This is, by our count, the fourth time the JLAC has postponed Oracle's ability to testify, denying the company's fundamental right to address the core findings in the BSA report," the Oracle letter said.


  • The company balked at Florez's description of Oracle as uncooperative. The letter said the company has produced thousands of pages of documents as requested by the committee.

    Florez responded in his letter to Ellison that 'Oracle was imbued with a spirit of cooperation ' only after being threatened with subpoenas by a unanimous vote of the Joint Legislative Rules Committee.'


  • The company said the committee and the state auditor have been unresponsive to its requests for meetings. Two days after the auditor released its report, Oracle said it wrote to the auditor and committee explaining "a specific material error" in the report related to the value of the contract's projected benefits. Oracle said the auditor did not answer the letter and refused to meet with the company. Florez also denied numerous requests to meet with the company, Oracle said.

    "It is unheard of'perhaps unprecedented'that the subject of an audit report is not given a single opportunity to engage in a thoughtful discussion about the report," the Oracle letter said.


  • During the initial hearings with state officials, the company noted, Florez "unjustly accused Oracle of many things and [has] permitted the hearing record to be filled with reams of undocumented innuendo and speculation.'


  • The company also questioned the committee's refusal to let the five Oracle sales staff members provide an opening statement when they testify.

    "The most notoriously unfair legislative investigations in the history of our country, such as the House Un-American Activities Committee or its Senate counterparts, allowed its witnesses to make opening statements," the letter said.

    Florez bristled at this comparison: 'I believe it is outrageous that Mr. Henley compares JLAC unfavorably to the House Un-American Activities Committee. This kind of over-heated rhetoric only lends credence to charges of unethical conduct by Oracle's sales representatives.'


  • Oracle noted too that the committee has rejected a company request to let the sales staff testify about the value of the software agreement.


  • The company also questioned the decision by the committee to not examine the Oracle-requested review by the former state auditor. Sjoburg's review contradicts the BSA report and identifies possible savings to the state from the software agreement.

  • About the Author

    Trudy Walsh is a senior writer for GCN.

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