Records suggest state was taken advantage of in Cover Oregon website debacle

The multinational software giant Oracle insists that it’s not to blame for the website fiasco turned national punchline known as Cover Oregon.

However, a document revealed last week contains internal communications that contradicts what Oracle has been telling politicians and the public, and suggest the company’s own employees felt Oracle did not give Oregon its money’s worth.

The interoffice correspondence had never been disclosed publicly in the two years since the faulty health care exchange cost the state more than $300 million.

In fact, the California-based contractor is battling in court to keep its internal communications under wraps.

Oracle repeatedly has blamed the failure of the Cover Oregon website project on state mismanagement and politics. They’ve found plenty of backing in thousands of documents already released publicly by the state.

The state, meanwhile, has argued that Oracle knew its work was faulty and kept vital information from the state. What’s more, the state in court says it now has internal documents that support that claim. But, because Oracle has designated the documents as confidential, the state has been unable to share publicly what it calls proof of its claims.

Last month the Oregon attorney general’s office submitted a 24-page brief in Marion County Circuit Court arguing that Oracle was wrongly classifying its internal documents as confidential. The brief said several examples of Oracle’s internal correspondence are not trade secrets and should be disclosed. But, because the documents remain under seal, the passages are redacted — covered with a black bar.

Last week, however, the Pamplin Media Group gained access to a version of the brief without the redactions. The passages include summaries (and a few selected quotes) of private exchanges between Oracle employees. They reveal:

• In some reports and emails some Oracle employees criticized the company’s work for Oregon. One company assessment in November 2013 found its software development “didn’t pass the ‘laugh test.’”

• That a Nov. 22, 2013, internal email appears to contain two typos, one Oracle developer wrote that an “army” of programmers for the company was “rapoing the state f Oregon on something that will never work well.”

• A passage, from a March 16, 2012, internal email, that suggests a company executive may have opposed the state’s plan to hire a prime contractor to oversee Oracle’s work out of a desire to preserve the company's lucrative position as Cover Oregon’s prime contractor. Oracle now says this lack of oversight is at the heart of the project’s problems.

• That concerns about the project prompted Oracle’s founder, billionaire Larry Ellison, to request daily progress reports in a Nov. 16, 2013, email.

In a statement in January, Oracle said the state’s motion includes “misleading statements.” Asked last week about the excerpts, Oracle spokesperson Deborah Hellinger characterized the state’s motion as “A handful of cherry picked documents out of more than 2 million documents in this case. There are thousands of documents that tell the true story and that clearly establish that the State was responsible for the outcome of Cover Oregon.”

Secrecy questioned

According to the state’s motion, the passages above and other documents that are labeled secret “belie Oracle’s public relations story, undermine its litigation defenses, and strongly support plaintiffs’ claims.”

Oracle defended its use of the confidentiality designation, saying some “involve personal information about individuals. Still others include information about Oracle’s other customers and trade secrets.”

But the state contends that Oracle has misused the confidentiality order to prevent the state from “providing the Oregon Legislature, Congress, federal authorities, and Oregon citizens with a complete history” of the project.

Oracle also sealed documents that already are public, as well as innocuous emails such as ones accepting a meeting, booking a conference room and forwarding a state email without comment, according to the state’s motion.

Tung Yin, a Lewis & Clark Law School professor, says the state’s motion may well be a hardball attempt to extract a generous settlement. Citing emails such as the one saying Oracle programmers were “rapoing” Oregon may be intended to show the company how this would look in court.

Since the “o” and “i” are adjacent on keyboards, Yin says “rapoing” appears to be a typo for “raping.”

“The worst possible reading of that email would be, I think, that there were people who knew (the website) would never work, but they were still selling it to Oregon and taking the money,” Yin says.

Even if that isn’t what the email’s author meant, the quote could force Oracle to play defense in court, Yin adds. The art of settlement negotiations “is always about making your case look as strong as possible and your opponents’ case as weak as possible.”

Executive opposed oversight

Perhaps the most interesting excerpt of Oracle correspondence concerns the state’s initial plan to bring in the equivalent of an IT general contractor, called a systems integrator, to oversee Oracle and manage the project.

The state’s failure to hire an integrator was, in Oracle’s more recent portrayals, was a bad move.

“Oracle has never worked on a project of this size and complexity without a systems integrator in place,” according to a PowerPoint presentation Oracle shared with members of Congress.

Not filling that position created a large management void and “created massive problems” for the Oregon project, the Oracle PowerPoint presentation continued.

According to the state’s motion, however, an Oracle executive in March 2012, recommended in an internal email that the company discuss how to stop the state from hiring an integrator, apparently because it would diminish Oracle’s role in the project.

If the state hired an integrator, it “could displace or reduce our role significantly,” wrote the Oracle executive, according to a version of the state’s brief: “It isn’t clear what we can do about this other than pray that they keep deferring the SI (systems integrator) selection. But since hope is not a strategy, this topic deserves some discussion.”

The email substantiates one of the most explosive claims in the state’s lawsuit against the company, that a former Oracle employee said the firm engaged in a secret effort to dissuade the state from hiring an integrator. Oracle told Oregon it would fill the role instead, the state lawsuit claims.

Oracle’s legal filings stop short of mocking the state’s decision to go without an integrator. But they do suggest it made failure inevitable. As the company argued in its federal lawsuit, “That decision was akin to an individual with no construction experience undertaking to manage the processes of designing and building a massive multi-use downtown skyscraper without an architect or general contractor.”

Mixed responsibility

The public could get a chance to see the full documents after March 10, when a Marion County Circuit Court judge will consider whether to unseal them.

IT experts who’ve followed the project say both sides share responsibility. Todd Williams, a management consultant and author of a book on problem projects, focuses blame on the state side. The head of eCameron, a Camas, Wash., project management consulting firm, he said he knows people who worked on the project and gives trainings in which his audience role-plays how to oversee it.

The excerpts cited by the state raise questions for Williams, but they don’t change his view that the state bears most of the responsibility for Cover Oregon’s failure. He’s reviewed numerous documents from the project as well as news reports showing the state used poor contracting, poor management and ignored the advice of its own employees and consultants.

“I do believe Oregon is much more at fault,” Williams says. “Oregon screwed its population on this project.”

That said, he adds, the documents indicate that Oracle was “not a good citizen” on the project, either.

“Oracle should have seen many areas where Oregon was setting the project up for failure. As good partners in the project, they should have been advising the state to go in a less-risky direction,” he says. “As it was, Oracle had a very low-risk contract with no obligation to take on this role. Hence, they seemed to be more interested in their short-term profit rather than the long-term relationship and viability of the product.”