The Gov't of CA sure as H isn't! Aren't you one of the guys who not so long ago was crowing about how Davis was guaranteed reelection?
Care to guess again?
Consult an Oracle
Getting to the bottom of the Gray Davis scandal.
By Jonathan Wilcox
here's trouble in the River City, as Sacramento calls itself.
I don't mean just "politics as usual" trouble. No, the current scandal involving software
mega-corporation Oracle and California's mini-Governor Gray Davis is anything but business as usual,
and it has all the makings of the best kind of mystery novel — one with true crime.
At first glance, it looks like the everyday
I-give-you-cash-contribution-you-give-me-something-I-want story. Yawn.
The Davis administration contracted to buy $95 million worth of computer
software from Oracle, and within days an Oracle lobbyist handed a $25,000
campaign donation to a Davis aide who had been one of the prime movers
behind the no-bid deal.
Word got out. It looked bad. So Davis fires some appointees, returns the
money and says he will try to get out of the contract. No harm, no foul, right?
But here's what happened. A review of the Oracle contract by the State
Bureau of Audits found that a separate company acting as a middleman was
to be paid $28 million and that the software to be purchased would cost the
state anywhere from $6 million to $41 million more than if there had been no
contract. Further, the state bought more software licenses than it has
employees to use them.
We also learned that at least three of Davis's high-ranking appointees went to
extraordinary lengths to get the contract signed by midnight, May 31, 2001,
brushing aside questions and objections from civil servants whose jobs
required them to review the document. Those civil servants, in testimony
before a joint legislative committee, described a frantic, chaotic last-minute
atmosphere reminiscent of the Clinton pardons.
Department of General Services attorney Cynthia Curry said she only saw the
final version of the Oracle contract minutes before the midnight deadline
Oracle had set. "I've never seen a contract that had so many people in higher
government (positions) pushing for it."
One of the prime pushers was Susan Kennedy, a member of Davis's innermost
circle of operatives (described by Sacramento Bee columnist Dan Walters as
the governor's "all-purpose troubleshooter").
Since being named by Davis as a cabinet secretary, Ms. Kennedy has been at
some pains not to be an on-the-record source in press stories. And yet she is
now widely quoted to the effect that the governor didn't know anything
about the Oracle contract.
Red Flag #1: When Silent Susan Kennedy starts popping up in news stories
and giving detailed refutations to reporters, the explanation cannot be
innocent.
And so begins the great Sacramento mystery: What did Gray Davis do, and
why did he do it?
Oracle's motives seem pretty clear. The company's fiscal year ended on May
31, 2001, and they wanted to put that $95 million on their books in the 2001
fiscal year (wouldn't it be interesting to know if they claimed the entire $95
million as revenue in fiscal 2001, even though the contract was for 10 years?)
But $95 million is less than 1 percent of the company's reported 2001 revenues
of $10.9 billion, so why was this contract so important to Oracle?
A very good guess is that it would enable the company to meet, or come
close to meeting, the earnings per stock share predicted by Wall Street
analysts. Match or beat the earnings prediction, and the price of your stock
goes up; miss it, and it goes down. So, if that's what they did, it wasn't very
nice, and maybe dishonest, but it would explain why they did it.
But why did Davis's appointees do it? That's Red Flag #2.
In the Davis regime, $25,000 is just an ante to get into the game and qualify to donate more, as
Sacramento lobbyists learned minutes after Davis was administered the oath of office. Further, Davis
is a notorious bureaucratic bottleneck, priding himself on handling even small details of his office's
functions. If he didn't know about the Oracle contract, it was a first for his administration.
Davis has so far fired two of his department heads and suspended one (with pay), implying they were
incompetent or lax in letting this "mistake" slip through.
No, they weren't. They were right on top of it, furiously driving their subordinates like jockeys going
to the whip in the stretch drive, and they got it done.
But they can't simply have thought it was a swell idea, since civil-service staffers advised them that it
wasn't. And why did Davis's cabinet secretary involve herself personally in the matter? There is only
one plausible answer: they were doing the bidding of their boss, Gov. Gray Davis.
So why did Davis do it, and for what? That is the unsolved mystery that Sacramento's placid press
and partisan pols are choosing not to solve.
Perhaps we should consult an oracle.
nationalreview.com |
