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California to Cancel Oracle Deal
ShaunC writes "Back in mid-April, the state of California bought $95M worth of Oracle software, which turned out to include more licenses than the state has employees, at a taxpayer cost of $41M more than necessary. Now, CNet is reporting that the contract is being cancelled. Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made, several state officials have been suspended, and a criminal investigation into the deal is already underway."
How does one, exactly, "undo" a contract for millions of dollars worth of software licenses? Seems like a very sticky legal situtation. Especially since "There are some parts that have already moved forward."
And how is CA doing this, when Oracle says "they must have been talking to themselves because we didn't know about it"?
"Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made, several state officials have been suspended, and a criminal investigation into the deal is already underway."
If anyone really thinks that a $25k donation would have anything to do with a $95,000,000.00 deal for software, they need to get reacquainted with reality. $25k is nothing unusual. It's a Red Herring, and doesn't belong in an informed discussion on the Oracle/California mess.
I live in CA and I'm curious about where that money will now go. Back to the treasury? It's already been budgeted... maybe we could invest in some Savings and Loans project?
Well, this should all be quite humorous.
A fool throws a stone into a well and a thousand sages can not remove it.
but I bet the tax payer has to dig yet deeper to pay for bailing out of the contract
You are most definitly correct. Oracle will most definitly sue CA for breach of contract. This will most likely lead to a multi-million dollar settlement which CA's taxpayers will have to pay. In the end, Oracle will make out like a bandit because they would have made the settlement money for doing nearly nothing, since breaking the contract no longer obliges Oracle to provide any goods/services.
This kind of BS has happened before, it will happen again. A few years back, Pennsylvania entered into a $200 million+ contract with an emissions testing company to inspect peoples' cars. When the administration changed, the commonwealth terminated the contract and ended up paying $80 million or so in breach of contract costs.
In case of fire, do not use elevator. Use water!
What does the number of employees have to do with the number of licenses? The last time I checked, Oracle was licensed on a per server basis, not on who uses it...
Also, I'm going to assume that there are far fewer servers in the CA gov't than there are employees, and if so, then someone made a made a REALLY big error in budgeting. Of course, we are the country that paid $43,000 for a screwdriver and that sort of thing, so who knows?
Rule #1 -- Politics always trumps technology.
If the investigation leads to a finding that the contract was part of a bribe, the contract could be nullified due to being based on a criminal act. The taxpayers will most definitely pay for any multi-million dollar trials, but Oracle may not be able to sue for breach of contract if a court finds the contract was signed for a bribe.
Developers: We can use your help.
It's _OUR_ faults. We're the ones that keep reelecting these crooks. The general public is apathetic and doesn't care to spend any time researching candidates. Instead, they'll get all the information they need from commercials. Heck, we elected a president that in no way, shape, or form has hidden his ownership by corporate America at any time in the past or present. If we want to change our country for the better, _WE_ have to do something about it instead of sitting back and blaming someone else.
Gray Davis, or whomever is really behind this, will get off. The little guy who accepted the contribution might take a fall. Inevitably, there will be a smoke/mirrors show, until the media has determined its no longer viable as a story, then Davis will get re-elected, etc.
Hell, anyone remember Chandra Levy? You can get away with murder (no pun intended) in this country as long as you keep quiet when the Sh*t hits the fan, lay low, then quietly pretend it didn't happen.
Reason, free market capitalism, and individualism
So:
Huge corporate donation after state gives same corporation business is a crime.
Huge corporate donation before state gives same corporation business is okay.
Makes sense to me.
Where are we going and why am I in this handbasket?
That is just Ellison arrogance that has trickled down to people under him.
Click here or here.
To be on topic: this deal was fishy on many fronts:
- More Oracle licenses than state workers
- Not just a third party (Logicon), but a fourth party (Koch Financial Services) was involved
- The contract was signed last May, but the software is still not in use. You spent $95 million to sit on software licenses?
- Finally, the sales tax issue already mentioned
We can only hope that $95 million dollars worth of state officials are ousted.And just how will they do that, when they made an offer to dissolve the contract if the State wished to do so?
Since the state bought them, they are theirs. I wonder if Oracles EULA would permit resale of the excess. I would be willing to pay Cali 10 cents on the dollar or less for a Oracle license. They could put them up on Ebay....
Sorry about the writing. Robot fingers, you know? Cliff Steele in DOOM PATROL #23
You mean, they can't just issue a ROLLBACK?
What the hell were they paying Oracle for, then?!
That was not a troll. He was making the point that CA debating database (or any other) technology is premature when they lack the infrastructure to provide utilities that most of the first world takes for granted.
Karma: Good (despite my invention of the Karma: sig)
Every time I get a call from my father suggesting Oracle stock, I procrastinate, and they take another hit.
Hmmm... can you tell us when your Dad phones so we can play the options market?
Really going out on a limb there. "I've said it before and I'll say it again"? Hell, EVERYONE'S been saying that for the past 200 years, you really think you're fighting the power?
Depends on what you call a "corporation." Citizens' groups like the NRA also make campaign contributions. It's actually a nice part of democracy.
Karma: Good (despite my invention of the Karma: sig)
I'm not much of a political activist but sometimes I feel that way more and more. Is it a sign of age?
Corporations in many respects are legally a 'person.' (Maybe that's the best argument against the splitting of Microsoft... but then again, maybe Bill Gates should be drawn and quartered...) But the similarities end when accountability is the issue. Everyone starts pointing fingers in a system where you're innocent until proven guilty (but only when you have an effective attorney) a lot of the time, the real guilty people go free.
(Corporations == identity shelters?)
But the problem is that these entities are giving money to politicians to support their interests. That just seems inherently wrong. What point of view (seriously, I ask) could spin this situation in a positive way? The leaders of our country should be focused on the good of the whole nation without particular parties attempting to muscle their influence at the cost of others in various ways. Okay, I speak in ideals here and I guess that's not very reasonable, but there was a time when our leaders weren't paid and acted for the priviledge of leading our people to success and freedom. Now they're paid...voting themselves raises, converting their campaign funds into cash when they retire.
It's out of control.
"Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made".
Just like that the Governor is screwd. Voters in that state KNOW he not only fucked up but was paid to do. That's when you cross the line from being a bumbling morun to being a crook.
In Jamaica by on the other hand (where I live) We had a series of contracts go sour at taxpayers expense to a very small grupe of contractors. There is rampant speculation that these contractors contribute a sizeble portion of these overpayments to the ruling party but there is no actual proff.
You see around here campaign financing is done in secret.
--= Isn't it surprising how badly I spell ?
Could Oracle Deal Put Simon Back On The Map? ... if their tax dollars are being wasted through gross incompetence -- or worse, being used to facilitate corruption."
... and takes Gray Davis off message. At a minimum, this is a godsend [to Simon]."
...
San Francisco Chronicle's Marinucci reports, Davis has run into "what Republicans hope will become the 'perfect storm' of campaign issues" for Simon. At issue is a $95M no-bid deal Oracle Corp. signed with the state that "could cost taxpayers $41 million" in "unnecessary charges." Making matters worse: a $25K campaign contribution from Oracle to Davis "handed over" to a Davis adviser "in a bar while the contract was being negotiated last spring." Making matters even worse: Reports of shredding of documents related to the contract by "state bureaucrats." The news found Simon "seizing the offensive for the first time," charging in a presser that "the scent of scandal surrounding this administration is growing." Although AG Bill Lockyer (D) is investigating, Simon said "more needed to be done." Simon: The dots are starting to be connected, and they paint a very troubling picture. Californians have a right and a need to know
Davis denied "allegations of impropriety, saying he did not know of the Oracle deal or the company's campaign contribution." And the "top three" Davis admin. officials "in charge of the contract have resigned, been fired or placed on suspension" (5/5).
About That Donation
The Davis camp "reported receiving a $25,000 donation from Oracle" 6/5/01, "Days after the contract was finalized. But Arun Baheti, the governor's director of e-government, told top Davis aides that he accepted the $25,000 check from an Oracle lobbyists before the negotiations were complete and mailed it to the campaign. The check had a March date." An Oracle spokesperson said the donation came from an April tech event "hosted by Davis that was attended by roughly 30 companies." Oracle said delivery of the check was "apparently delayed" and was "unrelated to the state contract" (Bustillo/Tamaki, Los Angeles Times, 5/6).
Just The Beginning? Or Going Nowhere?
Observers say the Oracle deal "could reinforce reservations that voters have expressed about Davis' fund-raising practices." GOP strategist Dan Schnur: "This Oracle mess is taking place in the middle of a budget crisis. It's easy to see how tens of millions in wasted money could have been spent on programs that Davis is cutting." And Simon -- to GOPers "glee -- made exactly that point when he lambasted the governor." Simon: "The money wasted on this Oracle contract could have paid for thousands of teachers, textbooks or lunches for needy children."
Berkeley prof. Bruce Cain said the Oracle story "shifts the media's attention from Simon's recent gaffes on such issues as whether he paid state taxes to the growing Oracle scandal." Cain: "[It] allowed him to go on the offense
Simon's aggressive stance "coincides with a decision to reach out to some seasoned political operatives with track records on aggressive campaigns." Simon has hired ex-Gov. Pete Wilson (R) spokesperson Sean Walsh; ex-spokesperson for Sec/State Bill Jones (R), Rob Lapsley; and researcher Mark Bogetich -- "a team that with little money, landed the toughest punches on Davis through the primary."
Walsh: "Every time that reporters and other people are turning over rocks, there are a lot of cockroaches running -- and they're all running for the center of the Capitol. And I see Bill Simon holding a big can of Raid" (Marinucci, San Francisco Chronicle, 5/5).
Said Schnur "after highway patrol officers descended on state offices" 5/2 to "prevent document destruction, no politician likes to see his name in the same headline as the word 'shredder'" (Chance, Sacramento Bee, 5/5).
NRCC Chair Rep. Tom Davis: "Gray Davis is in bad shape in terms of his personal popularity and voters wanting a change. But whether Simon's the guy to do it or not, we'll have to see" ("Capital Gang," CNN, 5/4).
Simon Dying To Get To This Guy
Simon said he "wants to see" Davis manager Garry South "on the witness stand regarding the timing of the $25,000 contribution," an idea Joint Legislative Audit Cmte chair Dean Florez (D) "quickly dismissed as ridiculous and politically motivated" (Bustillo/Tamaki, Los Angeles Times, 5/6).
Davis Offers His Take
Davis said his admin "has opened talks to scrap" the $95M deal with Oracle, "which he insisted was approved without his knowledge. He also took credit for removing three state officials who promoted or signed off on the much-criticized deal." Davis: "I had no idea this contract was being negotiated. I think most of you know I'm barely on the information on-ramp, much less proficient in technology. So this is not a matter that would normally come to my attention, nor did it." Davis "acknowledged his reputation for keeping a tight reign on his" admin., but "said he only micro-manages 'what's on my plate'" (Sweeney, Copley News Service, 5/4).
What Will The Leg. Do?
Capitol Dems were placed in a "precarious position" by the news of the Oracle deal, "requiring them to react forcefully or face" GOP "criticisms that they are protecting their governor." GOPers have "already asked the federal government to conduct its own Oracle investigation, arguing that" Lockyer, "whom Davis asked to investigate the matter, cannot be impartial because he accepted $50,000 from the software maker in recent months." State Sen. Ray Haynes (R): "If they pursue this with the same vigor they pursued [former Insurance Commissioner Chuck] Quackenbush [R], I think we could compliment them and say they did good work, If they don't, then we go through a partisan drill that is nothing more than window dressing. That's going to be the test" (Bustillo/Tamaki, Los Angeles Times, 5/6).
The cmte today will take testimony from "key administration witnesses" (Chance, Sacramento Bee, 5/5).
No Surprise, Oracle Very Influential
San Francisco Chronicle's Salladay reports, Oracle has worked had to channel "its major campaign contributions to a select few" CA pols "wielding the most power over its livelihood." Almost "every elected official" who has received money from Oracle "has some measure of control over Oracle government business, or held influence over the $95 million software contract that has embarrassed the company" and Davis. Davis and Oracle are now working together to "cancel the contract" (5/6).
State Cabinet Sec. Susan Kennedy: "If somebody comes to you and says, 'I need something and it has to be right now,' the answer is 'No.'" Kennedy said she broke that "cardinal rule" when she put her signature on a "governor's action request" (GAR) that "gave the green light for the apparently overpriced software contract with Oracle Corp." Kennedy was presented with the GAR 5/31, the "three-page memo concluded" with a sense of "urgency, emphasizing 'the short window of opportunity.'" The "state fell for it and immediately signed" the deal. Kennedy said she "assumed all the advertised benefits had been checked out -- or would be -- by the other GAR signatories. They weren't" (Skelton, Los Angeles Times, 5/6).
my sig is an honor student
California should take a hard look at Firebird. Hopefully, CA develops their software in a database-independent manner so that another db can be essentially slipped in to replace Oracle or whatever else they're using.
Steve Magruder, Metro Foodist
See, Microsoft isn't the only greedy software company out there!
I wouldn't blame Oracle entirely. I work for a state government and we have to justify every penny.
There was someone asleep at the switch on this one. It's a deal similar to the 800 hours of AOL for only $10 more than the 700 hour deal.
They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.
More along the lines of I'll give you, personally, 25 thousand bucks in exchange for 95 million dollars of tax payer money..
XML is like violence. If it doesn't solve the problem, use more.
$25,000 is A LOT to give any politician from a single company, ESPECIALY at the state level.
.001% in the Governor's race.
I mean govonerships are won with less that 5 million dollors, and most of the time I bet it is less that 2 million.
You're either from a small state or misinformed. Tony Sanchez raised over $18 million just for the primary election to win the Democratic spot on Texas' gubernatorial ballot this Fall. Large portions of it were self-financed or raised from his banker friends.
Marty Akins raised $2.975 million for his bid for the Democratic spot for State Comptroller in the primaries. If you live in a large state, you'll see large-scale campaign spending is the norm, and that $25,000 would be less than 1% in the Comptroller's race and around
Name 1 OSS database that compares to Oracle in features and power. Some organizations actually need the features that are only provided by products like Oracle, SQL Server or other high end relational databases.
Name 1 OSS database that can scale up to Oracle in power and features.
Gray Davis' total campaign warchest is over $35 million, and he's actively seeking out more at all times.
California has some of the nation's most expensive media markets, and a population that's not terribly enthused about politics.
As a result, heavy advertising is the name of the game - and it's expensive to the extreme.
D
"Name 1 OSS database that compares to Oracle in features and power. Some organizations actually need the features that are only provided by products like Oracle, SQL Server or other high end relational databases."
I will not argue with you, because you are absolutely correct.
But 95% of all organizations would get along just fine with MySQL.
"First lesson," Jon said. "Stick them with the pointy end."
Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made...
This is true, but misleading, because the money was received by the head of the Dep't of Information Technology, not Davis himself, nor his campaign fund directly. The contract appears to have been completely mishandled, and perhaps manipulated, by the governor's cabinet, the CA Dep't of Information Technology, and its head, Elias Cortez, who's already been suspended pending the current investigations. Cabinet secretaries involved have already resigned, embarassed at their lack of proper review of the contract. There appears to be some malfeasance on the part of software advisors to the state who made money on the deal, and $25K & $50K campaign checks that've been making the rounds to one & all. It's all available in the latest article on the deal. All in all a dirty deal, but I don't see where Davis, even though he was the Governor, could have had any precognition of the stupidity going on in the lower halls of the government before the deal was completed.
Despite GOP willingness to paint with as broad a brush as possible in an election year, Davis appears not to have known much about the deal until it hit the news, about when /. first reported it. Since then, it's been his own office working with the Assembly that've sought to find out what happened.
Think about it. The Governor does not personally handle or approve all software purchases, nor should he. There appears to be quite a bit of crooked behavior on the part of Oracle and the leaders of the CA Dep't of IT, as well as a lack of proper review by those overseeing the department, and Davis is looking into it with the Assembly. If anyone finds evidence that Davis was a part of the deal then sure, nail his ass to the wall, but don't make insinuations there's no evidence for. That just cheapens the discussion, and ignores the fact that it is Davis who began the investigations, Davis who sent in the CA Highway Patrol to stop document shredding at the Dep't of IT, and Davis who's asked for and received the resignations of 3 top cabinet officials for failing to do a proper review of the deal. I don't mind disagreeing on political issues, but corruption in the governor's chair is a serious charge that requires more than non-evidence.
Oh, and his opponent, Bill Simon, saying that the oracle deal takes food out of the mouths of children is rich. This guy wants to gut children's services, make abortion illegal, and stop state tracking of all racial data regarding education, health care, etc. I guess if you don't want to solve a problem, you start by ignoring it.
The only tool you've got against psychosis is experience.
Is that before or after they need to execute their disaster recovery plan?
A Pirate and a Puritan look the same on a balance sheet.
Here's how you do it. Don't reform campaign finance. That's a red herring, and as you said, it's a free speech issue. Reform the electoral process. Motivate officials to be honest by making the possibility of being voted out a real threat. In the US House, incumbents are reelected like 98% of the time. That's insane.
The system needs to be opened up to challengers, to new ideas, new faces. Right now the Duopoly makes the election laws, so it's not surprising they favor incumbents. Nobody but a Democrat or Republican has a chance, and this is by design.
Freedom of conscience must be restored. If you can't safely vote how you truly feel, then the system is fundamentally flawed. The "wasted vote" problem must be eliminated.
To do this, we must realize that plurality voting is broken, and Condorcet voting must be implemented. It is the only system that is proven to be strategy free and truly express the preferences of the electorate.
Additionally, in presidential elections, the EC votes should not be allocated on a winner-take-all basis, but by district as intended. (You thought the correlation between EC votes and members of Congress was coincidence?)
Work locally. Get active in a minor political party, it doesn't matter which one. In this area (election reform), most have the same goal — fairness. Get these reforms in county and state government. Run for office, and ask why your RepuDem opponents haven't implemented fair voting yet. Educate the electorate about the deficiencies of the system, and how Condorcet is fair to everyone.
Constitutionally Correct
Okay, but what about running issue-centric commercials or lobbying Congress? That's beyond the means of most taxpayers, but possible when several taxpayers pool their resources. This is actually necessary to allow poorer folk to compete with the wealthy. For all of McCain's talk of how the rich are "buying" Congresspeople with soft money, you can't deny that many groups, such as the NRA and religious groups, are comprised of predominantly lower class citizens, who still manage to be a force with which to be reckoned.
Karma: Good (despite my invention of the Karma: sig)
To be perfectly honest my job uses MS SQL Server mostly.
(We need transactions. Just like your clients do.)
But it is my firm belief that 95% of all applications built that uses Oracle or MS SQL Server don't really need them!
I've seen a lot of small websites and other pitiful applications cough up money for a bad ass database they will never need.
And, numericaly speaking, most systems built fall into this category. Small, and not likely to grow anytime soon. Ma & Pa businesses.
This is where oss databases will do to the job just right and a lot sheaper than the big boys.
So why not use them?
There is a nich for MySQL too.
But I never said it was ready for serious mission-critical systems.
"First lesson," Jon said. "Stick them with the pointy end."
Bzzzt! Wrong!!
Read the damn article, Oracle offered to let CA out of the contract. Moreover the company with severre legal difficulties is the agent which took money to consult defining the state database needs then sold the software. That is at the very least a conflict of interest. The state attorney general appears to be alledging that there was something more.
Oracle is offering to let CA out of the contract for good reason, the cost to oracle's reputation of a major investigation of whitewater proportions would be vast. The state (and national) repubicans have a vested interest in that type of investigation, both to damage Davis who is a possible opponent to GWB in 2004 and more importantly to draw attention away from the stench comming from the GOP/GWB Enron connection.
While US politics is corrupted to a major extent by campaign contribribetions, $25K is simply too small a kickback on a $95 million contract to be a bribe. The going rate is at least 1%.
GWB and the GOP received several million in cash and services in return for being allowed to rape the CA energy market. GWB was lent a jet plane by 'Kenny Boy' for the campaign. That cost consumers an additional $20 billion.
Looking for an Information Security student project suggestion?
Try http://dotcrimeManifesto.com/
Hmm, I appear to have overstated the case, but I am not the only person with this misconception. Most company directors (myself included) believe that a corporation's sole raison d'etre is to make a profit. Corporate directors only have a legal obligation to maximize shareholder value when a bona fide offer is made for their stock. However, in practice this means that a board which does not focus on maximising shareholder value will quickly be displaced by one which does. There is no realistic place for ethics in corporate behaviour.
> Further, donations are protected speech in the U.S. Don't like it? Tough! Go whine to the Supreme Court.
I *know* that and if your reading comprehension level is at 5th grade or above you could see that from my post. It's a pretty tenuous argument in my opinion, but I'm generally in favour of expanding 1st ammendment rights. The point I was making was that it is preposterous for corporations to have the rights of a human when they don't have the limitations or ethics of a human.
http://rareformnewmedia.com/
Former (thankfully) Atlanta Mayor Bill Campbell recieved donations from Oracle as well, then had Spectronics purchase spend millions of dollars of Oracle software to be used at the Atlanta airport. The deal was put together by an associate of Campbell's who took money from Spectronics. Spectronics also gave Campbell money for his campaign, laundering it through a drug treatment center. Spectronics was rewarded when the city forced MediaOne to resolve a legal dispute with the company. Spectronics also received money from the city for setting up the Oracle deal - but an audit team was never able to find the Oracle software Spectronics was paid to buy. Most of the Spectronics executives were convicted of fraud, as were a lot of the mayor's employees, but the mayor himself charged the world with being racist and escaped without a scratch. Oracle was not charged with any crimes either, but I'm not personally sure the company is entirely innocent.
Also see Online Athens and Creative Loafing.
== Paul Rickard, Editor of The Microsoft Boycott Campaign ====
When you're talking about a 95 million dollar deal, Davis had better know what's going on
Perhaps in Arkansas, but not in CA. Hell, back in 1991 the state spent $25 million to build a science building at my school. $95mil is a pile of cash to you & be but looks like a hill of beans in a state budget running into the tens of billions.
But this is not to say that he isn't to blame. I agree, in the end all responsibility rests with him. My distinction is that he's appointed lousy cabinet officials who didn't oversee the transaction correctly, while the position of the GOP is that it shows Davis is corrupt. There is no evidence, yet, that this is the case. But you're right in that it's a screwup stemming from the people he appointed, and it should never have happened.
This, combined with the way he mis-managed the energy crisis
Happen to read the LA Times today (reg required)? It's a nicely laid-out story explaining all about how documents out of the Enron investigation show that they were gaming the market for profits to save their bankrupt asses. Read it and learn the truth before you talk about the energy crisis being Davis's fault. Hell, the Governor inherited a fucked-up a deregulation that, if you forget, was passed by our previous Repub Gov Pete Wilson with the bipartisan support of a complicit Assembly.
And lest you forget, while we were getting our power turned off each afternoon, it was Bush & the assholes he appointed at the FERC who refused repeated requests by our governor and senators to investigate companies' obvious fucking-around with our power & gas markets. And lo, what are we finding now that our subpoenas are being fulfilled? That these companies were indeed fucking with our energy markets for profits. It's no joke. People fucking DIED because they didn't have the money to run their A/Cs. The CEOs of these companies should rot in jail for that shit.
The only tool you've got against psychosis is experience.