Oracle sues Oregon officials in healthcare website dispute

By Shelby Sebens

PORTLAND, Ore. (Reuters) - Oracle America Inc, the software giant in charge of developing Oregon's failed health exchange website, has filed suit against five former staff and campaign advisers to the state's former governor, saying they worked behind the scenes to kill the site for political reasons, court documents showed.

The company also gave notice to state administrators on Thursday, the same day it filed suit in Multnomah County Circuit Court, that it might file similar claims against former Governor John Kitzhaber and his former chief of staff, Mike Bonetto.

Oracle and the state are already fighting in court over who is to blame for the failed $240.3 million system, and the new lawsuit by Oracle seeks about $33 million in damages it says the company lost from the fallout over the Cover Oregon program.

The lawsuit says Kitzhaber's staffers and advisers, who did not work for Cover Oregon, "improperly influenced" the decision to shutter the site and then blamed Oracle to defuse the political consequences.

Named in the lawsuit are Kitzhaber's former campaign manager Patricia McCaig, consultants Kevin Looper and Mark Wiener, former business policy director Scott Nelson and former spokesman Tim Raphael.

Oracle argues the website was ready to go before the state decided to switch to the federal exchange in April.

"The work on the exchange was complete by February 2014, but going live with the website and providing a means for all Oregonians to sign up for health insurance coverage didn’t match the former-Governor's re-election strategy to 'go after' Oracle,” Oracle spokeswoman Deborah Hellinger said in a statement.

"Political operatives Patricia McCaig, Kevin Looper, Scott Nelson, Tim Raphael, and Mark Wiener acted in the shadows and took actions to undermine the ability of Oregonians to receive health coverage; create a false narrative blaming Oracle for the state’s failures; and ultimately interfere with Oracle’s business,” she said.

Oregon was initially enthusiastic about the federal healthcare plan, known as Obamacare. But the Oracle-built site never worked and Oregonians were forced to submit paper applications. In April, Oregon moved to an exchange run by the federal government.

Kitzhaber resigned last week amid criminal probes into an influence-peddling scandal involving allegations that his fiancée used her position in his office for personal gain.

Kitzhaber’s attorney could not immediately be reached for comment. Of those named in Thursday's lawsuit, Wiener and Looper declined comment and the others could not immediately be reached.

(Reporting by Shelby Sebens; Editing by Cynthia Johnston and Eric Beech)