Oregon sues Oracle over Cover Oregon site

Gov. Kitzhaber said Oracle's work was 'flawed and incomplete'

Oregon Gov. John Kitzhaber, April 10, 2014 (KOIN 6 News)
Oregon Gov. John Kitzhaber, April 10, 2014 (KOIN 6 News)

SALEM, Ore. (KOIN 6) — The State of Oregon is suing Oracle over the debacle that was the Cover Oregon website.

Attorney General Ellen Rosenblum and the Oregon Department of Justice filed the suit Friday in Marion County Circuit Court and seeks more than $200 million in damages.

Rosenblum sued Oracle and some of its executives for fraud, racketeering and false claims of payment, the Attorney General’s office said in a statement.

Among the allegations in the suit, Oracle submitted false claims to the state and Cover Oregon totaling hundreds of millions of dollars.

Rocky King, Executive Director of Cover Oregon, announces opening day of the health exchange in Portland, Ore., Tuesday, Oct. 1, 2013. Cover Oregon begins offering services today.(AP Photo/Don Ryan)
Rocky King, Executive Director of Cover Oregon, announces opening day of the health exchange in Portland, Ore., Tuesday, Oct. 1, 2013. Cover Oregon begins offering services today.(AP Photo/Don Ryan)

Oracle also overcharged for “poorly trained personnel who performed incompetently, hid from the state and Cover Oregon the true status of its absymal progress.”

The suit also alleges Oracle made promises it couldn’t keep, didn’t meet deadlines and didn’t fix its shoddy work.

“Over the course of our investigation, it became abundantly clear that Oracle repeatedly lied and defrauded the state,” Rosenblum said in a statement. “Through this legal action, we intend to make our state whole, and make sure taxpayers aren’t left holding the bag.”

Oracle filed its own lawsuit Aug. 8 for breach of contract over $23 million in disputed bills. The company blames Oregon for the website’s failure, saying the state had incompetent and indecisive staff.

Oracle was the largest technology contractor working on Oregon’s health insurance enrollment website, known as Cover Oregon. The website was never made available to the general public and became a political problem to Democratic Gov. John Kitzhaber, who is running for re-election.


In a statement released Friday, Kitzhaber said, “When I asked the Attorney General in May to take legal action against Oracle, I thought it was important to hold the company accountable and recover taxpayers’ dollars for its flawed and incomplete work. We were all aware of Oracle’s poor performance and failure to deliver a working website for Cover Oregon. Today, after months of investigation, the Attorney General’s findings go well beyond disappointing and incomplete work. The complaint filed contains serious new allegations of fraud, deceit, and corruption by Oracle. The details of the complaint, including the admissions of former Oracle employees, are appalling to me. I fully support the Attorney General’s actions against Oracle. I will provide whatever is necessary to protect Oregon taxpayers and hold Oracle accountable.”

In a statement from spokesperson Jessica Moore, Oracle said: “The lawsuit filed today against Oracle by the Attorney General of Oregon 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. Oracle is confident that the truth – and Oracle – will prevail in this action and the one filed by Oracle against Cover Oregon two weeks ago in federal court.”

The problem

Instead of signing up for health insurance under the Affordable Care Act in one sitting, Oregonians had to use a hybrid paper-online process that was costly and slow, and the state had to hire more than 400 workers to help them. Altogether, about $250 million in federal funds has been spent on Oregon’s exchange, including technology development, salaries, advertising and rent.

Despite the exchange’s technology woes, about 454,500 Oregonians have enrolled in coverage through Cover Oregon using the hybrid process. An estimated 97,000 of those enrolled in private health plans, while about 357,500 enrolled in the Oregon Health Plan, the state’s version of Medicaid.

The state decided to stop building the Oracle website earlier this year and transitioned to the federally run enrollment website.

The FBI and the federal Government Accountability Office are also investigating Oregon’s exchange problems.

The Associated Press contributed to this report.

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