Throughout months of debates and hearings over the contract, Cortez - who led the state through its successful Y2K transformation - touted the integrity of the contract and defended his part in negotiations with Oracle and its representative, Logicon.
Cortez was asked to leave the building and remain on suspension by the Governor's Office after allegations of document shredding at DOIT arose.
Baheti, director of e-government, said his decision to resign was fueled by concerns that he would "become a tool" to attack the governor. Although Baheti, who worked for the Governor's Office, was not associated with DOIT, his name came up in newspaper stories critical of the Oracle deal.
State authorities and some legislators claim Cortez was largely responsible for the $95 million software contract with Oracle. Although Cortez has continued to defend his role in the deal, former State Senator Barry Keene, who headed up the Department of General Services, resigned late last week. It was Keene's department that had overall responsibility for negotiating IT contracts - although a state legislative committee alleged that Cortez played the key role in getting the contract signed.
A State Auditor's report was highly critical of the contract, charging that the state would be obligated to purchase far more licenses than it could use and, instead of saving millions of dollars, would spend $41 million more than it currently pays for Oracle licenses. Legislators had been concerned for months that the enterprise licensing agreement was awarded outside of any bidding process and was "rushed through" to meet an Oracle accounting deadline.
Prior to the controversy over the bill, Cortez had touted the Oracle deal as a good opportunity for the state to save up to 50 percent on software licenses. In addition, he said that local governments would also benefit by buying from the state's contract. Now, some legislators are calling for the contract to be cancelled.
At the same time as the debate over the contract accelerates, DOIT is facing a June 30 sunset. Although a legislator had been poised to carry a bill that would have rescued the department, he later removed DOIT from the legislation, citing the controversial nature of the high-profile department.
Cortez was appointed in 1999 by Davis to lead DOIT out of several embarrassing IT failures and through Y2K. He had formerly headed up information services for the Los Angeles Unified School District. Backed strongly by some members of the state's powerful Latino Caucus, Cortez became controversial and the target of several committee hearings in 2001. The signing of the Oracle contract marked the beginning of the end for both Cortez and DOIT - as it currently exists. The department's legal council, Robert Dresser, has been asked by the governor to serve as interim director.
Baheti was appointed by Davis in 2000 to head up the state's e-government effort. It was Baheti who facilitated the development of the California Web portal that, since its launch early last year, has won numerous national awards. Baheti said he supported the "concept" of an enterprise license agreement and told the governor he accepted responsibility for not asking DOIT and DGS more detailed questions that might have highlighted potential problems with the contract.
Prior to recent events and a flurry of newspaper stories, Baheti had not been pulled into the controversy. Vinnie Patel, a veteran of the state's IT unit, will temporarily step into Baheti's role, according to capitol sources.
The package of events around DOIT is further complicated by upcoming November elections - including the gubernatorial race in which Davis is challenged by conservative Republican Bill Simon who quickly called for an accounting of the governor's role in the Oracle deal.
Insiders anticipate that more resignations are on the horizon as the list of names of people who saw, touched or considered the contract grows on an almost daily basis.
As events continue to unfold - including a call from one Republican lawmaker for a federal investigation into the Oracle contract and its associated players - some DOIT employees continue to hold out hope their jobs will survive. According to Kevin Terpstra, a department spokesman, an effort is being made to salvage the strengths of the DOIT team and reform the department.
