When it rains, it pours!
calgov2002:
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Posted on 05/04/2002 7:12:06 AM PDT by randita
Focus shifts to 2nd firm in probe of Oracle pact
CONFLICT INQUIRY: Logicon advised state while helping software company
Robert Salladay, Chronicle Sacramento Bureau Saturday, May 4, 2002
Sacramento -- As executives for Oracle Corp. and the state huddled Friday to cancel a flawed $95 million software contract, Attorney General Bill Lockyer focused his growing investigation on an Oracle business partner that allegedly hid its involvement in the final deal.
Investigators are looking into whether Logicon, a division of Northrop Grumman and an Oracle reseller in California, violated conflict-of-interest laws by consulting with the state on technology issues while working with Oracle on the software contract.
"I think it's more likely that Logicon has a problem more than anyone else, " Lockyer told reporters, "because they were serving two masters. They were working for the state and at the same time secretly working for Oracle, without knowledge of state officials of the circumstances, as far as I can tell."
State officials spent the day assessing the extraordinary events of Thursday as the Oracle contract unraveled. A key technology aide to Gov. Gray Davis resigned, another was suspended, and agents hauled away 12 sacks of shredded documents and hard drives from the agency that had pushed the Oracle deal.
Meeting for the first time with reporters about the Oracle mess, Davis said he knew nothing about the contract before it was signed. And Davis said he didn't know why a key technology official in his inner circle would pick up a $25,000 check from an Oracle lobbyist and send it to Davis' re-election campaign.
"I have no idea what he was doing, why he was doing it," Davis said. "It came as a complete surprise to me, and we intend to get to the bottom of it."
As for whether he knew about the contract, Davis replied: "I think most of you people know I am barely on the information on-ramp, much less proficient in technology, so this is not a matter that would come to my attention, nor did it."
As he spoke, a senior vice president of Oracle was negotiating with the governor's finance director over how to cancel the contract before California taxpayers are forced to pay out any money. The first payment to Oracle, for $14 million, is due in September. Lockyer and Davis said the state will work quickly, perhaps securing a settlement within days.
Logicon's connection to Oracle and its involvement in negotiating the contract will be the focus of a legislative hearing in two weeks. Lawmakers are dissecting a state audit that reports that the Oracle deal would cost taxpayers an unexpected $41 million, although the company disputes the findings.
A year before the Oracle contract was signed, Logicon was hired by the Department of Information Technology to write a "white paper" that would help the state figure out how best to sign long-term contracts for software and computers.
That paper eventually was shelved, and Logicon never asked for the $93,000 it was supposed to be paid for the work. Months later, Logicon was back again, this time offering to sell the state Oracle products through a so-called Enterprise Licensing Agreement.
The state eventually rejected Logicon, believing that a contract with the firm would violate single-source contracting laws because there were other resellers of database software, according to recent testimony before the Legislature. The state then started negotiating exclusively with Oracle.
According to the state auditor, Logicon worked a side deal with Oracle that would pay Logicon $28.5 million for helping Oracle finance the deal through a company called Koch Financial.
"Because of the magnitude of Logicon's stake in (the contract), and given Logicon's and Oracle's apparent failure to disclose that stake to the state at the time of the negotiation, we have serious doubts as to whether the state was able to negotiate Oracle's best price," the audit said.
A loophole in state law allows technology companies to both bid and consult on technology projects, but Lockyer said it appears Logicon hid its relationship from negotiators and may have violated conflict laws.
"Bill Lockyer is onto something," said Assemblyman Dean Florez, D-Shafter, chairman of the audit committee investigating the contract. "I think there is a conflict, and I think that conflict of interest wasn't disclosed by Logicon."
Florez said Oracle also should be faulted for not disclosing its side financing deal with Logicon.
In a statement, Logicon said its role in the Oracle "transaction was open and acknowledged by the state officials involved. The company believes it has acted appropriately and in good faith in all aspects of this transaction. While we have not had the opportunity to review the attorney general's comments, we believe he will come to the same conclusion when all the facts are known."
In testimony before Florez's committee two weeks ago, state Director of Finance Tim Gage said he didn't hear about Logicon's $28 million side deal until after it was signed, but he nevertheless was not surprised the company would be compensated by Oracle, since Logicon originally brought the contract idea to the state.
Lockyer said his chief deputy has talked with federal prosecutors, and Lockyer said they didn't see any evidence of a federal crime that would require the U.S. attorney to get involved. Lockyer's office has opened its own criminal investigation into the matter.
The governor's office said it has turned over all of the documents and information it is aware of on the Oracle contract to both the state auditor and Lockyer, who said Davis and his staff were cooperating fully and offered to make any staff member available for interviews.
Lockyer also said his office had no evidence that important documents had been shredded at the Department of Information Technology. The department has 24 shredders that it routinely used, but Lockyer said continuing to shred amid the controversy "seemed very foolish to me, given the environment."
In his Friday conversation with reporters, meanwhile, Davis said he has directed all state agencies to include negative as well as positive information when they seek approval from his inner circle on contracts and other projects.
Some top-level Davis aides said they weren't given enough information before they signed a so-called Governor's Action Request that approved the Oracle contract. Specifically, the governor's Department of Finance had serious concerns about the validity of the contract, but they were swept away with verbal assurances that the numbers had checked out, the aides said.
Davis said he doesn't second-guess the various agencies that review, analyze and sign contracts.
"Every month in this state there are literally hundreds and hundreds of transactions about which I have no personal knowledge, nor should I," Davis said. "They are being handled by professionals, mostly civil servants, who do the right thing."
Lawmakers have decided to call yet another high-level Davis aide to testify at an investigative hearing Monday probing the Oracle contract. Unlike the previous hearing, witnesses are expected to be put under oath.
Kari Dohn, a chief policy adviser to Davis, is expected to testify about her role in reviewing the Oracle contract and whether she briefed Davis on the deal. An inter-office e-mail suggests she was preparing to talk to the governor.
What's next
-- The Joint Legislative Audit Committee meets Monday to question top aides to Gov. Gray Davis about their role in the contract negotiations.
-- Attorney General Bill Lockyer continues his investigation into Logicon, a reseller of Oracle products, to determine whether it violated conflict-of- interest laws when it acted as a middleman in the transaction. Lockyer had already opened an investigation into the legality of the contract.
-- Officials with Logicon, Oracle and Koch Financial, a lender on the deal, are expected to testify before the audit committee later this month about their roles in the contract.
-- Attorneys from Oracle and the state work to rescind the contract.
-- The state Department of Information Technology, which pushed the contract, is scheduled to disband June 30 after a key lawmaker abandoned legislation that would extend the life of the agency.
"I think most of you people know I am barely on the information on-ramp, much less proficient in technology, so this is not a matter that would come to my attention, nor did it."
Gov. Gray Davis on the Oracle contract
"I think it's more likely that Logicon has a problem more than anyone else because... they were working for the state and at the same time secretly working for Oracle.''
Bill Lockyer
California attorney general
We have serious doubts as to whether the state was able to negotiate Oracle's best price.''
State audit of Oracle deal
"Bill Lockyer is on to something. I think there is a conflict and I think that conflict of interest wasn't disclosed by Logicon.''
Assemblyman Dean Florez
D-Shafter, chairman of the audit committee investigating the contract
"The company believes it has acted appropriately and in good faith in all aspects of this transaction. While we have not had the opportunity to review the attorney general's comments, we believe he will come to the same conclusion when all the facts are known.''
Logicon statement
E-mail Robert Salladay at bsalladay@sfchronicle.com.
How do you know? Answer: When RATs start BLAMING EVERYONE ELSE as part of their diversion tactics.
New Campaign slogan for Grey Davis:
I manage the State's software contracts just like I manage the State's energy contracts.
Ahh, the infamous Bozo defense. Gray has taken some pages from the Clinton Administration's crisis management playbook.
When it rains, it pours!
calgov2002:
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Federal agents already had seized the department's computer hard drives and 12 sacks of trash, including papers that apparently were shredded Wednesday.
Amazing! The official investigation is only 1 day old and Davis already has Logicon nailed as a scapegoat! This scandal must be even deeper than we first thought...
"I think it's more likely that Logicon has a problem more than anyone else, " Lockyer told reporters, "because they were serving two masters. They were working for the state and at the same time secretly working for Oracle, without knowledge of state officials of the circumstances, as far as I can tell."
It looks like the felon playing the role of Kali Attorney General has a fall guy/corporation, LOGICON, for the Whoreacle Mess. Typical Rat trick.
"Lockyer, meet Spike your new room mate for 5 to 10 years."
"Spike, this is your new boy toy until you wear him out, meet the former Kali Attorney General!"
Federal agents already had seized the department's computer hard drives and 12 sacks of trash, including papers that apparently were shredded Wednesday!
Benito II just wanted to make sure more data wasn't seized by federal agents so he had his agents seize it!
These rats like Benito II Davis never miss a trick do they?
How would you like to be working for Logicon and read about this in your weekend newspaper? Time to call your lawyer, send the photos of Davis sleeping with your management to a far away relative, and to polish up your resume. I hope that their retirement funds are not Logicon stocks if it is a stock company.
Why is this factoid regarding the Federal investigators only in the LA Times?
The answer, my son is simple. The other fish wraps are working 24/7 to remove all data like this from their articles. They are trying to word them to make Benito II look like a hero.
The typical Saturday Kali fish wrap has a story like this:
"Suddenly this past week Benito II discovered that bad things were going on. Then, he summoned his CHP to seized data before the evil feds/GW could seize the data. As we know GW would share this data with evil big corporations like Enron and PG&E!
"Now the honest and wonderful Davis is working 24/7 to cancel the contrac and to fire everyone who was involved. He just had to find out about what was going on. Being a great governor, he never micro manages anyone. Not being driven by money like the evil GW/Cheneys he will handle this mess very quickly."
"Remember Governor Davis is for abortion, illegal aliens, increasing rights for Gay Pedophiles and taxing the rich and playing Robin Hood. You must pray for our wonderful governor as he cleans up this mess caused by Enron and GW and evil conservatives."
Before we get too excited, we must realize that every publisher/editor and 99.99% of the reporters of Kali's major fish wraps, are in bed with Davis. These left wing publishers/editors know how to write these stories so they won't be accused of spiking the stories. Yet they never hammer Davis like they would a republican involved in 1% of what Davis has done.
Then, Ron Dog and others with contacts with Kali talk show hosts will take our stuff and get the word out and keep it out.
Too often conservatives hear something semi good from the pressitutes. Then they relax and say my job is done, even the pressitutes are on it. Then the story gets dropped and forgotten.
We can help change things like we did with the Klamath Basin Crisis to reversing the PC statute of the firemen raising the flag at the WTC after 9/11.
We must remember that God only helps conservatives who band together and help themselves. No one else will win our cultural battles for us. Defeating Davis is our number one cultural battle for Californians and conservatives right now.
See what you started with your little rag tag band of POed conservatives re the electrical fiasco last January! Thanks to you and a core of loyal fighters, a lot has been done. We don't have re invent the wheel to get the correct story out on this issue. We made the wheel, and we can make it bigger. Thanks to Jim Robinson for his great gift of Free Republic. Free Republic is the tool and life form to abort Davis this November.
I personally think the $$$$ are in the 'consulting', not the software --GENSA
See 'link' to 'GENSA expands Sacramento office', also
GSA AND LOGICON SELECT GENSA TO PROVIDE INFORMATION TECHNOLOGY SERVICES
--I think this 'connects' a few dots. GSA 1999, that would be Clinton with the first 2 years and probably the 1st option year. Bush Adm. may have rubber-stamped 2nd option year following 9/11. Finally, getting to the 'nuts' and bolts of this 'porker', IMHO.
"Although the contract is worldwide in scope, the initial focus of the work is expected to be in the GSA’s Pacific Rim Region. Headquartered in San Francisco, the region includes the states of California, Arizona, Nevada and Hawaii as well as Guam, the Pacific Trust Territories, American Samoa and U.S. installations in the Far East."
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