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Calif. official in Oracle mess quits

Gov. Gray Davis' policy director, Kari Dohn, resigns to pursue "new challenges." Dohn was among those at the center of a controversy over a $95 million software deal.

Tech Industry
California Gov. Gray Davis' policy director has resigned, in a move that comes as questions still linger over the debacle involving the state's $95 million contract with Oracle.

Kari Dohn, who joined Davis' office as policy director four years ago, resigned earlier this week to pursue "new challenges," said Steve Maviglio, a spokesman for the governor.

Maviglio noted that he was not aware whether the Oracle controversy and the ensuing investigation by the state attorney general's office had any bearing on her decision.

Dohn did not return phone calls, and a representative with Attorney General Bill Lockyer's Office declined to comment.

The controversy arose in late 2001, when a state auditor wrote a scathing report that said Oracle's new enterprise licensing agreement would cost California in excess of $40 million more than the state's existing licenses with the software maker. The report challenged Oracle's claim that the contract would deliver $100 million in savings and led to hearings by the state's Joint Legislative Audit Committee, which sought to uncover why such a large deal would get approved in record time and without competitive bids.

Submitted as evidence in those hearings was an internal Oracle e-mail in which a sales representative advised a supervisor that Larry Ellison, Oracle's chief executive, should personally thank Gov. Davis for the state's business. The e-mail also suggested that three high-ranking members of the governor's office be complimented for playing an instrumental role in getting the contract approved: Dohn; as well as Arun Baheti, former e-government director; and Elias Cortez, former department of information technology director.

Cortez resigned under pressure for the handling of the contract, and Baheti was also forced out for his role in the deal and his handling of a $25,000 campaign contribution to Davis from Oracle. The campaign contributions were eventually returned and the contract canceled.

During the hearings, Dohn said she knew little about the contract and that she never informed Davis about the deal. Representatives from both Davis' and Ellison's office have previously stated that the two men never discussed the contract by phone.

The state attorney general's office launched an investigation into the deal while the Joint Legislative Audit Committee hearings were underway, and in January, a grand jury began calling witnesses, such as former audit committee chairman Dean Florez, who spearheaded the committee's investigation.

A report in The Sacramento Bee said the focus of the investigation centered on obstruction of justice allegations, in which a calendar submitted for Dohn was alleged to have been altered to remove an entry regarding Ellison.

During January, Dohn expressed her desire to quit but was asked to stay on until the budget revisions were completed, Maviglio told CNET News.com.

In January, another top official who was involved in the controversial contract resigned. Susan Kennedy, the governor's cabinet secretary and deputy chief of staff, was appointed as a Public Utilities Commission director by Gov. Davis. Kennedy, during the audit committee hearings, said she signed the contract but was not aware of any problems and never informed the governor of the contract until the state auditor's report was released.

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