Davis Returns $25,000 Oracle Donation

SACRAMENTO —  Gov. Gray Davis on Thursday returned a $25,000 campaign contribution from Oracle Corp. that he accepted last year just days after the state sealed a $95-million contract with the software maker, an agreement that both parties now want to break.

Although Davis has “great respect” for Oracle and its role in California’s economy, his campaign said in a brief written statement, the governor has decided to return the money “in view of recent developments.”

Those developments include an audit that described the contract as one-sided and of dubious value; the suspension of one department head and the resignation of two others for their roles in crafting the contract; and a series of legislative hearings seeking to uncover why the Oracle contract moved so swiftly, with so little scrutiny, through the state bureaucracy.

Oracle’s $25,000 donation to Davis imparts strong political overtones to the controversy. An Oracle lobbyist gave the check to Davis’ director of e-government, Arun Baheti, several days after the contract was signed last May 31, in an apparent violation of Davis’ policy that his staff not get involved in campaign fund-raising.

Baheti resigned last week, days after Department of General Services Director Barry Keene stepped down. Department of Information Technology Director Elias Cortez has been suspended.

Davis campaign spokesman Roger Salazar said that Oracle had also contributed $20,000 to the governor on Feb. 22, but that the money was returned because Oracle had stopped payment on it.

An Oracle spokeswoman said that she could not confirm payment had been stopped, but that the company is looking into the matter.

In returning an Oracle contribution, Davis follows the lead of Atty. Gen. Bill Lockyer.

On Wednesday, Lockyer returned $50,000 that he had accepted from the company since 2000.

Lockyer said that, although the money would not influence the investigation of the Oracle contract that he launched two weeks ago, returning it “seemed like the right thing to do.”

In a statement issued Wednesday, Oracle Chief Financial Officer Jeff Henley called the contributions to Lockyer and Davis “nothing out of the ordinary.”

“Because Oracle is headquartered in California and is one of the largest employers in the state,” he said, “we think it is important for us to participate in the political process.”

Oracle and its contract partner Logicon are now working with the state to rescind the agreement.