Four State officials have resigned or been suspended over the deal. It was concluded without any other companies being invited to tender for the work and apparently without any scrutiny of Oracle’s savings analysis. It was also revealed that Oracle had paid $75,000 in campaign donations to State Governor Gray Davis and State Attorney General Bill Lockyer.
The campaign donations have been returned and the State has indicated that the contract is being cancelled – which may require the State to pay to Oracle a fee for early termination. The State has said that all future contracts of $100,000 or more will be subject to competitive bidding.
Last Wednesday, Logicon, the agency that brokered the deal between State officials and Oracle was cut from the panel of the State’s Department of Information Technology. The firm stood to make a $28 million commission on the deal.