LOCKYER TOOK TWICE AS MUCH!
Posted on 05/11/2002 1:47:42 PM PDT by Jean S
CALIFORNIA GOVERNOR Gray Davis is known for his attention to detail and his aggressive fund-raising. But now, with a fresh scandal brewing, Davis is claiming he knows no details of a controversial government contract--and that a campaign contribution accepted by a state employee who pushed for the deal had nothing to do with the unusual way Gray's top advisers awarded it.
Politicians from both parties are skeptical that Davis is telling the truth about the rushed, no-bid, $98 million software contract awarded last year to Oracle, the database giant. And as the controversy grows, it may well be the biggest threat to Davis's chances for reelection.
There's never a good time for a scandal, of course. But for Davis the timing is particularly bad. A poll taken shortly before the story broke found the incumbent leading Republican challenger Bill Simon by 14 points--something of a reversal of fortunes. Surveys taken six weeks earlier, immediately after Simon pulled off an upset of former Los Angeles mayor Richard Riordan in the Republican primary, suggested the race was even.
Flying around the Golden State in the afterglow of his primary victory, Simon declared that the gubernatorial contest would be "a referendum on the failed leadership of Gray Davis." Davis had other plans. With a compliant media, and some helpful criticism of Simon from fellow Republicans, the Davis campaign quickly refocused the debate on the favorite question in the Democratic playbook: Just how extreme is Bill Simon?
But the Oracle scandal has only two possible outcomes--either high-level incompetence in the Davis administration, or corruption. This makes Davis the story again, just as the California legislature prepares to tackle the state's budget, which is $22 billion in the red and an unmitigated political disaster for the incumbent governor.
The Oracle story started slowly. It was last fall when the San Jose Mercury News first published an investigation questioning the deal. But it has gained momentum in recent weeks. In mid-April, the state auditor published a scathing report on the contract, concluding that the arrangement would not only fail to produce the millions in savings for the state that Oracle had projected but could end up costing California taxpayers $41 million. "The magnitude of the dollars and the mistakes make this extremely serious," said auditor Elaine Howle, who added that the Oracle review was one of the most "troubling" audits she had conducted in her 18-year career.
Among her findings:
-A survey of 127 California state agencies taken to determine the need for the new software found that only five thought it would be helpful.
-Davis's cabinet secretary, Susan Kennedy, who is also the governor's deputy chief of staff, signed off on the deal.
-The contract secured 277,000 software licenses from Oracle, although there are only 234,000 state employees.
-Ten months after the contract was rushed through, no state departments had acquired the licenses.
More troubling than the contract itself, perhaps, is the $25,000 contribution to Davis's campaign that came just six days after the Oracle deal was finalized. In a Sacramento bar, Ravi Mehta, an Oracle lobbyist, handed the check to Arun Baheti, director of Davis's e-government initiative and one of the state employees pushing hardest for the Oracle contract.
Davis, for his part, claims ignorance--not just of the Oracle contract specifically, but of high-tech issues generally. "I had no idea this contract was being negotiated," he told reporters last week. "And 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."
He could be telling the truth. But that would mean two things that were supposed to happen didn't. On May 22, 2001, Davis's policy director Kari Dohn telephoned Betty Yee, chief deputy director of the Department of Finance, to check on the status of the contract. Yee then sent an e-mail to others in her department noting that Dohn and Arun Baheti "are hot to trot on nailing down this agreement with Oracle." She also asked about the status of the contract, "so I can brief Kari before she has to talk with the governor about this (likely sometime this week)." Davis claims that meeting never took place.
Mehta, the Oracle lobbyist, also told Dohn that Oracle CEO Larry Ellison might call Davis to discuss the deal. Both Oracle and Davis claim the phone call never happened.
But the Davis campaign doesn't have an exemplary record of being honest about the Oracle deal. Top campaign officials have known for months that Baheti accepted the $25,000 contribution from Oracle. But before that information was made public, Davis's spokesman claimed that "the people responsible for the contracts would be in no position to know about contributions to the governor, nor should they be. There are," he said, "no dots to connect."
That turned out to be wrong, as the Simon campaign noted in a statement: "The dots are starting to be connected, and they paint a very troubling picture. The taxpayers need to know whether the dots lead all the way to the governor's office."
It gets worse. Cynthia Curry, a senior attorney in the California Department of General Services, was given the contract at 12:30 P.M. on May 31, for approval that same day.
Curry says she expressed reservations about the expedited process, but the state awarded the contract anyway. "I haven't seen a contract that had so many people pushing for it in higher government," said Curry, whose job it is to study such agreements. "That was very unusual." Shortly after the contract was signed, Curry testified last week, her boss received a phone call from Susan Kennedy, the governor's deputy chief of staff, praising the General Services department as a "can-do" agency.
Representatives from the state of California and Oracle are in talks to cancel the embarrassing deal. And late last week, Davis vowed to return Oracle's $25,000 donation. (It's fair to ask why, though, since he maintains there was nothing shady about the contribution.)
The California legislature is looking into the contract, though Republicans carp that with the Democrats running it, the investigation is lacking. "The contract was signed in the dark of night in a secret fashion," says GOP assemblyman Rod Pacheco, a former prosecutor who sits on the panel investigating the deal. "It appears that's how they want to proceed with the investigation."
California attorney general Bill Lockyer has opened an investigation of his own. But Republicans point out that Lockyer is a Democrat who has taken $50,000 from Oracle since December 2000, more than any other elected official in the state has received. When Lockyer was asked whether he regretted taking that money from Oracle, he said, "I was wishing there was more." He has since returned it.
Understandably, skepticism is abundant. Even left-leaning editorial pages are hitting Davis hard. "Campaign fund-raising has been the great passion--indeed, the only passion--of Gov. Gray Davis' career," argued the Sacramento Bee in a May 4 editorial. "So when the governor's office and his campaign say that Davis knew nothing about a botched, hurry-up $95 million software contract with Oracle Corp. that led the company's lobbyist to hand over a $25,000 contribution personally to the governor's e-government director five days after the contract was signed, pardon us for being skeptical."
The San Jose Mercury News, echoing a request from GOP assembly leader Dave Cox, has asked the U.S. attorney's office to investigate the matter. Published reports suggest the FBI is considering a criminal probe, something FBI spokesman Nick Rossi would neither confirm nor deny.
On Friday, Bill Simon called explicitly for the U.S. attorney to get involved. "I want to give the benefit of the doubt to Bill Lockyer," he says. "But I would join with Assemblyman Dave Cox in calling for the U.S. attorney to look at it. We can have concurrent investigations.
"I mean, it's appalling. It's, it's . . . I can't even say what I think because you'll print it. It leaves the impression of dirty money, favors handed out under the table. It's garden-variety, old-style politics straight out of the movies."
Stephen F. Hayes is a staff writer at The Weekly Standard.
LOCKYER TOOK TWICE AS MUCH!
Angelides should be willing to take the rap for Davis, admit to cutting the deal and then fall on his sword. Unfortunately, Phil Angelides would also take Gray Davis with him.
(by the way Davis, your picture is NOT on the State Treasures Home page as required)
And we have another great sound bite from grey out davis's lips to Simons campaign..
And this clown is gov for California...?
calgov2002:
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Isn't this new news!
Funny. That was the title of an anti-Reagan book from the early seventies.
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