Oracle's California row has wider implications

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The ongoing row over giving Oracle a $9.6 million contract to supply database software to California state agencies took a new turn at the weekend –one which widened out the row and could cause Oracle longer term problems than the immediate political scandal.

Oracle is caught up in a row about a 270,000 database licence deal - which the California state government is now trying to cancel – to supply software for every state. Initially the row focused on the uncontested nature of the contract award, the claim that most of the software is not being used anyway by state employees and allegations that the company made financial contributions to key politicians before and around the time of the award.

But state auditor Elaine Howle is now questioning why the California state government is willing to make Oracle Enterprise Edition 8i software the standard for the next decade, a move which she argues risks losing "innovation and flexibility" in its computer systems. She argues that using only Oracle implies that future computer contracts should be with Oracle "It may create some reluctance in going outside and using vendors other than Oracle," she said.

On top of this, US privacy and security experts are lining up to warn about potential security breaches from having a single database. For its part, Oracle has argued that standardising Oracle software means employees don't have to learn several database systems , thus cutting training costs.

But none of this is likely to help Oracle CEO Larry Ellison’s vision of a central "national file" linking all government information with Oracle database software used to monitor citizens. Ironically as a company Oracle was built on the back of an initial contract with CIA – which effectively funded the development of the first full release of the database.

Meanwhile it’s also emerged that the lobbyist who helped Oracle land the deal has a history of ‘ethical lapses’. According to a Sacramento newspaper Ravi Mehta, the man who made Oracle's case to the state, has a well-known reputation for flouting ethical rules.

As former California Governor. Pete Wilson's chief ethic's enforcer, Mehta is said to have tried to charge the state $8,000 to have his wine collection moved from his Southern California home to the state capitol,. He also engaged in personal legal work for Wilson's chief of staff at the same time his ethics agency was investigating another state cabinet official. In October 1996, Mehta's fellow ethics commissioners stripped him of his power as chairman because of questions about his personal ethics. Mehta resigned about eight months later.

Oracle says it was unaware of his Mehta’s past when it hired him.

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