Oracle Sued By Government


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Historically, several states have always allowed qui tam suits by whistleblowers, allowing citizens to act, when the government is unwilling (or seemingly incapable) of taking action. Because of their special status under federal law, whistle blowers may choose to remain anonymous in pursuing Whistleblower actions.

When Oracle was sued by a Whistleblower in 2007, the plaintiff (now known as being Paul Frascella) chose to remain anonymous, to protect his status at Oracle. The complaint claimed that Oracle was essentially exploiting its favored status as a government supplier. When the government intervened in the case in June, 2010, the anonymous plaintiff’s identity was unsealed.

Frascella no longer works for Oracle.

The claims against Oracle detail allegations that the company grossly overcharged the government for services. The GSA on occasion uses what are called “Multiple Award Schedule.” These bids —also known as GSA Schedules– allow a vendor such as Oracle, to make sales without future competitive bids…by giving federal agencies wide latitude about spending money to obtain products an services, ideally without cost-producing delays.

The system does not work, however, if graft or just plain laziness on either side enters the equation. Instead of saving money, insufficient oversight caused by non-competitive bidding may make the process more expensive, while making both sides less vigilant in policing expenditures. Thus, the MAS process is virtually synonymous with typical whistleblower suits alleging government waste. The original complaint alleges the GSA was oblivious to Oracle’s alleged practice of buying deeply discounted products and reselling to the government at the highest possible retail markup.

The original complaint also claims losses to taxpayers in the millions of dollars.

Whistleblowers are often initially less than willing partners in government investigations. But as it happens, at least in the case of government contractors such as Oracle, there’s also nothing to stop the government from intervening after an investigation has been initiated by a whistleblower. The issue of whether the whistleblower in the Oracle case will be harmed by the government’s intervention raises potentially significant issue about the US decision to enter the case, three years after the initial whistleblower complaint. And, perhaps, the message being sent to other over-bidding insiders like Oracle.

The government may have determined that the case was not moving forward quickly enough. Think of it as the government coming to a party late, or of asking where the 500-pound gorilla wants to go…answer: anywhere it wants to. More usually, of course, onerous costs of investigation usually encourage a different ordering of plaintiffs into the action.

1. Government process for Qui Tam Interventions/ DOJ Advisory. See generally,
2. GSA Multiple Award Schedules receiving negative scrutiny from oversight agencies:



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