California accuses Oracle of fraud

A legislative committee in the state of California has accused Oracle of keeping state purchasing officials in the dark over a contract worth a potential $95m.

Following a report from the state's auditor last month, the committee, which convened yesterday, accused the software giant and its reseller Logicon of being "part and parcel of defrauding the state of California".

The deal first came to attention of the state auditor when it was revealed no other party was invited to bid for the contract.

The real blow for Oracle and its partner came when officials discovered an email exchange from 28 May last year between the two companies revealing their intent to deceive Kim Heartley-Humphrey, the deputy director of acquisitions at the California department of IT.

Oracle salesman Greg Loos relayed a concern held by Logicon employee Timothy McCormick about "giving Kim too much detail unless she specifically asks for it because Kim historically has a habit of complicating things".

In addition, Loos advised a number of Logicon employees: "It's best to keep things at a 'summary' level with her - unless she has specifically asked for this much detail."

One Logicon employee, Rajan Mittu, replied: "We plan on giving Kim the least amount of data possible. At this point giving too much information can only be a bad thing."

The emails were published overnight on US newswires.

Kim Heartley-Humphrey, the first witness to be called to the stand, told the committee she was unaware of the fact she was being kept in the dark.

Executives from Oracle and Logicon are expected to testify in the coming weeks.