Oregon sues Oracle over failed health care exchange

Having spent $240 million for a non-functioning Cover Oregon site, the state is now attempting to recover money in the courts.

The state of Oregon has filed suit in state court against Oracle America Inc. and six executives Friday. The suit accuses Oracle of fraud in the company's development of Cover Oregon, the state's health care exchange. It seeks recovery of Cover Oregon's financial losses, plus penalties for damages.

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The suit follows an August 8 suit by Oracle against Oregon, blaming the failed project on the state's management of it. That suit seeks at least $23 million in addition to approximately $130 million Oracle has already collected from the state. In all, the state spent at least $240 million on the project.

The actual Oregon complaint lists the six Oracle executives as Stephen Bartolo (Vice President, Engineered Systems and Hardware), Thomas Budnar (Vice President for North America Government Consulting), Kevn Curry (formerly Group Vice President for North America Public Sector), Safra Catz (President and Chief Financial Officer), Brian Kim (formerly Technical Manager) and Ravi Puri (formerly Senior Vice President for North America Technology and Government Consulting). Also named as a defendant is Mythics, Inc., an Oracle reseller and consulting firm. The complaint is 126 pages long.

Reuters quoted an Oracle statement saying the suit "is a desperate attempt to deflect blame from Cover Oregon and the governor for their failures to manage a complex IT project. The complaint is a fictional account of the Oregon Healthcare Project."

The language in the Oracle complaint is also indignant, quoting a whistleblowing former Oracle employee who called the company's work "atrocious" and that Oracle's developers "broke every single best practice that Oracle themselves have defined."

In a statement, Oregon Governor John Kitzhaber said "[t]he complaint filed contains serious new allegations of fraud, deceit, and corruption by Oracle. "