May 8, 2002 6:50 PM PDT

Campaign funds returned in Oracle probe

California Attorney General Bill Lockyer said Wednesday that he has returned $50,000 in campaign contributions made by Oracle, to avoid the appearance of a conflict of interest as he leads an investigation into the state's controversial contract with the software company.

"Full, fair, nonpartisan and nonpolitical investigations have always been the standard for this office," Lockyer said in a statement. "Returning the campaign contributions from Oracle will help ensure that partisans don't undermine public confidence" in the investigation, he said.

Lockyer began the investigation after a state auditor released a report last month saying that state officials failed to exercise due diligence in signing the six-year, $95 million contract with Oracle and that the deal would cost taxpayers as much as $41 million more than needed. A state legislative committee is also investigating the matter.

Questions have surfaced in the past few days about Lockyer's ability to conduct an impartial investigation after receiving contributions from Oracle during the past 18 months. State Sen. Richard Ackerman, Lockyer's Republican opponent in the November election, called for Lockyer's removal from the case, and Assembly Republican leader Dave Cox has called for a federal investigation of the contract.

Oracle also made a $25,000 contribution to California Gov. Gray Davis that aides say was received just after the contract was signed. Oracle lobbyists gave the check to Arun Baheti, who resigned as director of e-government last week over his role in the Oracle contract negotiations.

Although Oracle representatives said Wednesday that Davis had decided to return the $25,000 donation, Davis spokesman Steve Maviglio said the governor has not yet decided whether he will return it.

Oracle also defended its actions Wednesday, denying any impropriety in donating funds to state officials.

"Because Oracle is headquartered in California and is one of the largest employers in the state, we think it is important for us to participate in the political process," Oracle Chief Financial Officer Jeff Henley said in a statement.

Oracle executives met Wednesday with the state's finance director, Tim Gage, about canceling the contract. More talks are scheduled, a Gage representative said.

 

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