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Kitzhaber, Richardson have unplanned face-off

Governor presses Oracle lawsuit; foe calls move a feint

by: TRIBUNE PHOTO: PETER WONG - Gov. John Kitzhaber (back to camera) answered questions Thursday afternoon from his GOP gubernatorial rival, state Rep. Dennis Richardson (far left on dais), during a legislative committee hearing in Salem on the problems with Cover Oregon.Democratic Gov. John Kitzhaber and Republican rival Dennis Richardson faced off last week for the first time since they won their primary contests.

But if the issue they argued about was expected, the setting was unusual.

The face-off was in Salem during a legislative meeting neither planned to attend until hours before its start.

The setting was a joint House-Senate committee on information technology, where Kitzhaber announced he would press a long-expected lawsuit against Oracle Corp. in connection with the failed Cover Oregon website.

“Oracle’s failure is unacceptable to Oregonians who need and deserve access to quality health care,” Kitzhaber said.

Kitzhaber requested Attorney General Ellen Rosenblum, a separately elected official, to proceed with a lawsuit seeking damages from Oracle.

But neither Richardson nor Oracle were buying it.

Richardson, a lawyer and state representative from Central Point and the GOP nominee against Kitzhaber, questioned the prospects for such a lawsuit.

He said the state’s failure to hire an overseer for the technology project, known as a “systems integrator,” plus state contracts with Oracle that apparently are limited to time worked and materials provided, would work against it.

“The fact is that trading blame doesn’t solve the problem,” he said afterward. “Instead of taking ownership over the failed project, he is merely attempting to distract us from his chief role in the Cover Oregon disaster.”

Oracle said in a statement afterward that state officials, not the company, bear the blame.

The election is Nov. 4.

State’s culpability

It was their first face-to-face meeting since the May 20 primary, when Richardson won against five little-known opponents and Kitzhaber had no significant opposition.

Although Richardson was not a member of the committee, legislators are allowed to participate at the discretion of the chairman. Kitzhaber had not been scheduled by the committee, but he announced about two hours in advance that he would appear to testify about Cover Oregon.

Kitzhaber acknowledged Richardson’s criticisms.

“There is no question but that the combination ... created a perfect storm on the state’s side that created this problem,” Kitzhaber replied.

“But no one can convince me that Oracle, with a straight face, can say we didn’t know you hired us to produce a functioning website. You don’t get to be the second-largest software company in the world with that attitude. Yes, the state has culpability. We have addressed that. But yes, Oracle has culpability.”

The state is withholding $25.6 million in final payments to Oracle, although it did pay out $43 million. Kitzhaber said he waited to move on a lawsuit until after internal actions. Six top officials have resigned from Cover Oregon, the public corporation set up to enroll people in private or public coverage, and the Oregon Health Authority.

Kitzhaber also said, prior to Richardson’s questioning, that he would ask for an investigation of Oracle by the inspector general of the U.S. Department of Health and Human Services and enlist the help of Oregon’s congressional delegation to recoup money for Oregon.

The federal agency can levy fines for false claims under the Affordable Care Act. Oregon Sen. Ron Wyden is chairman of the Senate Finance Committee, which has responsibility for how the national health care overhaul is financed.

Effective way to enroll

Oracle is based in Redwood City, Calif., but has an office in Hillsboro. Its annual revenue is about $37 billion, more than twice the state’s two-year budget.

Its corporate office said the blame lies with state officials.

“The governor admitted as much in his statement, and these facts are supported by extensive documentation,” according to a corporate official statement issued after Kitzhaber’s testimony. “We understand the political nature of the announcement just made and that the governor wants to shift blame from where it belongs.”

But a February assessment by First Data, an Atlanta company hired to review what happened, said Oracle has responsibility. “Their inability to adhere to industry standards and professional software and project management tenets warrants further review,” according to First Data’s report.

Despite spending of $248 million for a project to enable people to enroll people in private insurance or determine their eligibility for state-supported insurance under the Oregon Health Plan, the website has not enrolled anyone without assistance.

It has become a major political liability for Kitzhaber, a former Roseburg emergency-room physician who seeks a record fourth nonconsecutive term.

Still, a Public Policy Polling survey of 956 registered voters conducted May 22 to 27 put Kitzhaber at 49 percent, Richardson 36 percent.

When Richardson questioned whether Cover Oregon should remain as a public corporation, Kitzhaber said the answer should be supplied by the board and whoever is hired as its next executive director.

“The objective is to make sure that Oregonians have an effective way to enroll in commercial (insurance) products in a market that is competitive and transparent,” he said.



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