Legislative committee requests subpoenas for Oracle Corp. testimony

By Jennifer Coleman, The Associated Press
Wednesday May 22, 2002

SACRAMENTO — The legislative committee investigating a $95 million no-bid software contract asked for permission Tuesday to subpoena five top Oracle Corp. officials to testify. 

Assemblyman Dean Florez, D-Shafter, the chairman of the Joint Legislative Audit Committee, requested subpoenas for five Oracle employees involved in the negotiation of the contract, including Richard Polanco, Jr., the son of state Sen. Richard Polanco, D-Los Angeles. 

The Joint Rules Committee heard testimony from Florez and an Oracle representative Tuesday. The 22-member committee has until Wednesday to complete the vote. If approved, the subpoenas could be issued as soon as next week, said an aide to Florez. 

Oracle lobbyist Jeffrey Leacox told the Rules Committee that the company would make those employees available for Florez’ staff to interview, but not for hearings. 

In a letter to the committee, Oracle Vice President Kenneth Glueck asked to instead send the senior executive responsible for the transaction. 

The audit committee began questioning some of the governor’s top aides Tuesday about the contract. The deal was billed as a way for the state to save at least $16 million — and potentially tens of millions more — through volume purchases and maintenance of database software. 

But the state auditor said last month the contract could end up costing the state up to $41 million more than if it had kept its previous software supply arrangements, a conclusion Oracle disputes. 

Three state departments — the Department of Finance, the Department of Information Technology and the Department of General Services — signed off on the contract May 31, 2001. The auditor said none of the departments had done an independent analysis of the project’s savings estimates, but relied on numbers provided by the vendor. 

Aileen Adams, secretary of the State and Consumer Services Agency, the agency that oversees DGS, told the committee Tuesday that she understood that DOIT Director Elias Cortez had reviewed the figures. 

DOIT was the “engine driving the Oracle train,” Adams said. “Mr. Cortez indicated to me that he had checked out the numbers. I believed that this was a project being overseen by DOIT.” 

At a meeting on May 30, the day before the deadline for signing the contract, Adams requested additional that Finance officials conduct a financial review of the proposal, she told the committee. 

Adams said she explicitly told DGS Director Barry Keene that “he couldn’t move forward with it until it had Finance’s approval.” 

Keene resigned in April, while Cortez has been suspended by Gov. Gray Davis. 

Davis issued an executive order Monday requiring competitive bidding on most state contracts worth at least $100,000. 

Davis also said he would sign a bill he vetoed in 1999 banning technology consultants from advising the state on computer contracts and then bidding on the same contracts. 


Associated Press Writer Steve Lawrence contributed to this report.