Oracle Admits to sending in Private Eyes to snoop on Microsoft in DC

Published June 30th, 2000 - 02:00 GMT

The chairman of Oracle Corp. defiantly acknowledged hiring private investigators to spy on allies of rival Microsoft Corp. and insisted his company was only doing its civic duty, according to reports.  

"I feel very good about what we did," Larry Ellison said Wednesday, confirming that Oracle hired Investigative Group International Inc.  

He said the detective work showed that Microsoft paid trade and policy groups to influence public opinion during its antitrust trial.  

"What we were doing was exposing Microsoft's own little Watergate," Ellison added later during an interview with The Associated Press. "They were doing all the covering up. We are just the guys that caught the other guys in a break-in."  

Microsoft, in a statement, didn't deny connections to the groups, but said the spying was another example of how Oracle and other competitors have tried to tarnish its image. The company also called Oracle's behavior hypocritical, because Oracle has funded or supported groups critical of Microsoft.  

"The only thing more disturbing than Oracle's behavior is their ongoing attempt to justify these actions," Microsoft spokesman Greg Shaw said. "Mr. Ellison's attempts to justify his company's behavior only raise many more questions about the nature, scope and duration of Oracle's activities."  

Oracle's corporate spying allegedly included a $1,200 offer to janitors to get a peek at the trash of the Association for Competitive Technology, a trade group.  

"Some of the things our investigator did may have been unsavory. Certainly from a personal hygiene point, they were. I mean, garbage ... yuck," Ellison told reporters at Oracle's headquarters.  

Ellison challenged Redmond, Wash.-based Microsoft to conduct a similar investigation of Oracle, which makes computer software.  

"We will ship our garbage to Redmond, and they can go through it. We believe in full disclosure," Ellison said.  

Oracle said earlier that the probe proved that the Independent Institute of Oakland, Calif., and the National Taxpayers Union of Arlington, Va., "were misrepresenting themselves as independent advocacy groups, when in fact their work was funded by Microsoft for the express purpose of influencing public opinion in favor of Microsoft during its antitrust trial."  

One analyst called it a Watergate-style dirty tricks campaign.  

"This is a little shocking because it brings back memories of the dirty tricks that have brought down presidencies," said Josh Greenbaum of Enterprise Applications Consulting in Berkeley.  

Another analyst called what Oracle did standard procedure.  

"Many companies in the Silicon Valley do this on some level," said James Pickrel of Chase H&Q in San Francisco.  

Details of the incident involving the rival software giants were first reported Wednesday in The Wall Street Journal and The New York Times. Oracle said it told the detective agency nothing illegal was to be done during the investigation.  

Oracle said it retained the detective agency a year ago to investigate the Oakland free-market policy institute after it placed full-page ads defending Microsoft in national newspapers. The Times has reported that the ad was paid for by Microsoft.  

The taxpayers' union at one point issued a study blaming the antitrust case -- which Microsoft lost and has appealed -- for a loss in value of state pension funds. The Journal later reported that the group had received money from Microsoft.  

The Journal also reported Wednesday that Oracle hired a Washington public relations firm, Chlopak, Leonard, Schechter & Associates, to disseminate potentially damaging information about Microsoft to the media. That work included suggestions that a company headed by political consultant Ralph Reed -- a top campaign strategist for George W. Bush -- was trying to persuade the presidential candidate to support Microsoft.  

The company, Century Strategies, later apologized for encouraging "a small number of individuals" to lobby Bush. The company said Reed never asked Bush to take a position on the court case.  

Rob Latham, a spokesman for the Independent Institute, said the nonprofit group never tried to hide its connections to Microsoft. He said Microsoft has only been involved with the 14-year-old institute for the last two years. The institute began railing against the government's antitrust laws more than a decade ago, Latham said. "We would have been saying the same things whether Microsoft was involved with us or not."  

During the press conference Wednesday, Ellison accused the Independent Institute of issuing "bogus polls and false economic reports."  

Ellison also revealed that Oracle investigated another group called Citizens for a Sound Economy.  

In the interview, Ellison denied reports that IGI may have been involved in the theft of laptop computers owned by the groups under investigation. "If someone had done that, we wouldn't just fire them; we would prosecute them," Ellison said.  

Ellison said he was unsure how much money Oracle paid IGI for the investigation, but he believes it was less than $100,000 -- (The Associated Press) 

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