Officers Sent To Prevent Shredding At Center Of Criticized Oracle Contract

The highway patrol officers were sent to the Department of Information Technology on Thursday. Also Thursday, Davis suspended the director of the department, Elias Cortez and announced the resignation of another official.

Barry Goode, Davis' legal adviser, said he had received an unsubstantiated report about "possible document shredding" at the agency.

"While we had no conclusive evidence that any shredding or destruction of documents occurred, the mere suggestion that it may have occurred has led us to take these steps," Goode said in a statement.

The state had entered the six-year, $95 million computer contract with Oracle, Redwood Shores, Calif., in an effort to save money through volume discounts. But a state audit released last month concluded that the contract could end up costing the state $41 million instead of saving $16 million, as Oracle claimed it would.

The contract is being investigated by California Attorney General Bill Lockyer. But state Sen. Richard Ackerman, Lockyer's Republican opponent in the November election, said Lockyer should drop his probe because he received $50,000 in campaign contributions from Oracle in the last 18 months.

A spokesman for Lockyer, Nathan Barankin, said Lockyer didn't have a conflict of interest and that the investigation would continue.

"The California attorney general's office is vigorously investigating all aspects pertaining to the Oracle contract," he said. "We have the strong support of the governor. We intend to see it through to the end, wherever it may lead.'"

Just hours after the highway patrol officers were sent to the government agency, Oracle emphasized Thursday that it was willing to drop the deal.

"When our contract with the state of California first became an issue several months ago, we offered to rescind the deal. We stand by that offer today," said Oracle spokesman Jim Finn. "However, we continue to believe that our contract delivers great value to the state."

Davis didn't immediately respond to Oracle's offer.

Meanwhile, Republican lawmakers called for a federal investigation of the contract, citing a newspaper report that Davis aides were trying to cut short a legislative probe of the case.

A spokesman for Davis, Steve Maviglio, said there were no efforts to curtail the legislative investigation.

On Thursday, Goode ordered several state agencies, including the Information and Technology Department, to retain "all documents and electronic files that pertain to information technology systems, contracts, planning or negotiations."

The state attorney general's office sent a team to investigate the shredding report, saying destroying documents dealing with the contract "could pose the potential for obstruction of justice."

Maviglio said there was no indication that Cortez was involved in any shredding that may have taken place, but Davis decided to suspend him until investigations of the contract are completed.

The official whose resignation was announced Thursday was Arun Baheti, director of e-government.

In his resignation letter, Baheti said he should have "more vociferously raised questions" about the Oracle contract. Barry Keene, director of the Department of General Services, stepped down on April 26.

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