- The Washington Times - Saturday, May 4, 2002

SACRAMENTO, Calif. (AP) Two state officials were removed and Gov. Gray Davis sent law officers to a government agency to prevent document shredding in a growing political furor over a software contract with Oracle Corp.
Some Republican politicians have charged that the six-year, $95 million contract is a bad deal for the state, and perhaps a corrupt one. Mr. Davis, a Democrat, is in the middle of a re-election campaign.
The state signed the contract last May to buy software for nearly all state agencies to manage their databases. At the time, the state said that by buying its software in bulk, it would save $16 million.
But a state audit released last month concluded that the contract overestimated the state's needs and that the purchase could end up costing the state as much as $41 million more than if it had bought its software from its previous suppliers.
Mr. Davis has insisted he knew nothing of the contract before it was signed. He told reporters he was as "mad as anyone else" about the contract and was working with the Attorney General's Office to rescind the deal.
Oracle yesterday offered, as it did several months ago, to rescind the contract. But it disputed the state audit and insisted the contract would save the state millions. The Davis administration had no immediate response to the offer.
A few days after the contract was signed, Mr. Davis received a $25,000 campaign contribution from Oracle, which is based in Redwood Shores. Aides said there was no connection between the contract and the donation.
On Thursday, Mr. Davis sent Highway Patrol officers to the Department of Information Technology, the agency that negotiated the contract. Barry Goode, Mr. Davis' legal adviser, said he had received an unsubstantiated report about possible shredding at the agency.
Also Thursday, Mr. Davis suspended the director of the department, Elias Cortez, pending an investigation of the pact. Mr. Cortez had signed off on the contract. Mr. Davis also announced the resignation of another official involved in contract discussions, Arun Baheti. And General Services Director Barry Keene, who also signed off on the contract, resigned last week.
Mr. Davis is running for re-election against Republican investor William Simon, the son of a former U.S. Treasury secretary. A poll released last Sunday said Mr. Davis had a 14-point lead.
The Republicans have jumped on the Oracle issue.
Mr. Simon said Mr. Davis' denial that he knew of the contract "strains credibility," and the "scent of scandal surrounding the administration is growing."

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