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Oracle E-Mail Urged Big Donations

Probe: Lobbyist wrote that gifts to lawmakers would solidify deal. Firm says it ignored his advice.

June 13, 2002|DAN MORAIN and CARL INGRAM | TIMES STAFF WRITERS

SACRAMENTO — Oracle lobbyist Ravi Mehta outlined for his bosses a detailed plan for contributing money to legislators as a way of solidifying the company's $95-million software contract with the state, including a recommendation that Oracle help fund a college project of a key state senator's son, according to an e-mail released Wednesday.

Mehta sent the e-mail on Jan. 5, at a time when state auditors were preparing what turned out to be a highly critical review of the contract between the state and Oracle Corp. and its partner, Northrop Grumman subsidiary Logicon.

Oracle released the e-mail and other documents to the Joint Legislative Audit Committee, which is examining the deal struck in May 2001 without competitive bids.

Oracle executives said Wednesday that Mehta resigned at the company's request on May 31, and they distanced themselves from both Mehta and the memo he drafted. Although the company paid Mehta at least $8,000 a month, including a $25,000 bonus after the state entered the software deal with Oracle, Kenneth Glueck, head of Oracle's governmental affairs, said the company followed none of Mehta's January suggestions related to campaign donations.

In the memo, Mehta urged that Oracle governmental affairs executive Robert Hoffman expedite the contributions, noting "early support [goes] a lot farther than coming in when we need something." Mehta suggested making donations of between $1,000 and $10,000 to eight lawmakers and candidates, including Assembly Speaker Herb Wesson (D-Culver City).

Mehta's most unusual suggestion involved the son of Sen. Steve Peace (D-El Cajon), a member of the Joint Legislative Audit Committee. Peace has been among Oracle's harshest critics, going so far as to label one of Oracle's executives as "either stupid or corrupt."

The memo noted that Peace had been "extremely critical" of how the agreement was struck and had opined that the Northrop Grumman subsidiary could have engaged in illegal acts. Mehta then noted that Peace's chief of staff, Dan Howle, called him in October saying that Bret Peace, a student at Stanford University, "is working on a project and looking for corporate sponsorship," and wondered whether Oracle would consider donating money to the project.

"I believe Oracle should seriously consider making a contribution directly to Stanford and earmark it for this project," Mehta wrote.

In an interview, Howle, who since has left Peace's office, acknowledged calling Mehta and several other representatives of high-tech firms seeking money to help finance young Peace's project, a magazine. He dropped it when Bret Peace called back to say that the university did not want him to pursue outside funding, Howle said.

"It didn't turn out to be anything; he pulled the plug," said Howle, whose sister, state auditor Elaine Howle, wrote the report that led to investigations of the Oracle deal by the Legislature and Atty. Gen. Bill Lockyer and prompted an inquiry by the FBI.

Sen. Peace, asked whether the call by his former aide was appropriate, said: "I would rather he had not done so."

"It's a typical Ravi thing," Peace said. "He's got a problem with somebody. He thinks he is going to solve it with a campaign contribution. That's why Ravi is in trouble."

Bret Peace told The Times that Oracle was one of several companies considered as possible donors for a project he and other students were contemplating. "This idea was never followed through with, and no funds were solicited from any companies."

Among others mentioned in the memo, Mehta predicted that Wesson "will be very helpful to Oracle." Noting that he was scheduled to have dinner with Wesson in January, Mehta was seeking $10,000 for the speaker, and another $10,000 for Assemblyman Marco Firebaugh (D-Los Angeles).

Additionally, Mehta sought money for Assemblywoman Jenny Oropeza (D-Long Beach), noting that she would chair the Assembly Budget Committee, which would have oversight of the Oracle deal. Oracle "will need her to ensure" that the contract remains in place, he wrote.

Mehta also sought money for key Republicans, Assembly Budget Committee Vice Chairman John Campbell of Irvine and Assembly Republican Leader Dave Cox of Fair Oaks, who "was helpful to us during the audit debate."

Mehta had been scheduled to testify before the Joint Legislative Audit Committee on Wednesday. But his attorney, Matthew Jacobs, sent a letter to the committee saying Mehta would not appear, prompting Chairman Dean Florez (D-Shafter) to obtain a subpoena. Jacobs' letter suggests that even if Mehta is forced to appear, he will invoke his constitutional right against incriminating himself.

Mehta became a Capitol lobbyist after serving as then-Gov. Pete Wilson's chairman of the Fair Political Practices Commission, the government agency most responsible for enforcing regulations governing campaign donations and lobbying.

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