Oracle Admits To Microsoft Probe

The Oracle Corp. has confirmed it hired a detective agency to investigate rival Microsoft Corp., and said the work showed that Microsoft paid trade and policy groups to ”influence” public opinion during its federal antitrust trial.

The work by Investigative Group International Inc. allegedly included a $1,200 offer to janitors to get a peek at the trash of the Association for Competitive Technology, a trade group.

While Oracle did not take specific responsibility for the probe of ACT, the company said it was necessary to hire IGI to investigate the Independent Institute of Oakland, Calif., and the National Taxpayers Union of Arlington, Va., to expose Microsoft’s actions.

The groups ”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,” Oracle said Tuesday.

The Oracle statement and details of the incident involving the rival software giants were reported Tuesday 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.

”This is a sad day,” Mark Murray, a Microsoft spokesman, told The Associated Press. ”(Oracle is) basically trying to justify these inappropriate actions and it’s unfortunate that Oracle won’t admit that it’s wrong.”

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 funding from Microsoft.

The Journal also reported Tuesday 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.

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The work by Investigative Group International Inc. allegedly included a $1,200 offer to janitors to get a peek at the trash of the Association for Competitive Technology, a trade group.

The Oracle statement and details of the incident involving the rival software giants were 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.

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.

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The Oracle Corp. has confirmed it hired a detective agency to investigate allies of rival Microsoft Corp., and said the work showed that Microsoft paid the trade and policy groups to ”influence” public opinion during its federal antitrust trial.

The work by Investigative Group International Inc. allegedly included a $1,200 offer to janitors to get a peek at the trash of the Association for Competitive Technology, a trade group.

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.

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Oracle Corp. has confirmed it hired a detective agency to investigate allies of rival Microsoft Corp., and said the work showed that Microsoft paid the trade and policy groups to ”influence” public opinion during its federal antitrust trial.

The work by Investigative Group International Inc. allegedly included a $1,200 offer to janitors to get a peek at the trash of the Association for Competitive Technology, a trade group.

One analyst called it a Watergate-style dirty tricks campaign. But another called it standard procedure in Silicon Valley, where many companies engage in corporate espionage.

Oracle declined to comment beyond the statement early Wednesday. But Oracle CEO Larry Ellison, whose personal rivalry against Microsoft Chairman Bill Gates is well-known, may address the issue later Wednesday at a previously scheduled news conference to unveil a new product.

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.

One analyst called it typical behavior for the Valley.

”This is pretty standard. Many companies in the Silicon Valley do this on some level. You could call it corporate espionage or competitive intelligence,” James Pickrel, with Chase H&Q in San Francisco.

”It’s been no secret that Larry Ellison has been gunning for Bill Gates for a long time. Oracle is among the Silicon Valley companies leading the charge, looking for an opening to break Microsoft’s dominance,” Pickrel added.

”Everybody knows Oracle is a hard-charging company. This just confirms that, ” he said. ”The only real surprise here is that it came out in public.”

Josh Greenbaum of Enterprise Applications Consulting in Berkeley, was surprised by the revelations, however.

”This is a little shocking because it brings back memories of the dirty tricks that have brought down presidencies, said Greenbaum. ”It really speaks to the bitterness of the competition against Microsoft.”

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The work by Investigative Group International Inc. allegedly included a $1,200 offer to janitors to get a peek at the trash of the Association for Competitive Technology, a trade group.

One analyst called it a Watergate-style dirty tricks campaign. But another called it standard procedure in Silicon Valley, where many companies engage in corporate espionage.

Oracle declined to comment beyond the statement early Wednesday. But Oracle CEO Larry Ellison, whose personal rivalry against Microsoft chairman Bill Gates is well-known, may address the issue later Wednesday at a previously scheduled news conference to unveil a new product.

Independent Institute president David Theroux said Wednesday that his organization’s work is independent, and that Microsoft’s funding in no way amounted to a public relations contract.

”Instead of being willing to address the issues openly, Oracle has apparently felt the need to employ back-alley tactics, subterfuge, and disinformation in order to achieve its aims,” Theroux said in a statement.

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.

One analyst called it typical behavior for the Valley.

”Everybody knows Oracle is a hard-charging company. This just confirms that, ” he said. ”The only real surprise here is that it came out in public.”

Josh Greenbaum of Enterprise Applications Consulting in Berkeley, was surprised by the revelations, however.

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On the Net:

Investigative Group International: http://www.igint.com

Independent Institute: http://www.independent.org

Association for Competitive Technology: http://www.competitivetechnology.org

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Oracle Corp. chairman Larry Ellison defiantly owned up to hiring a private investigator to look into the ”covert activities” of Microsoft Corp., saying his company was only doing its ”civic duty.”

”I feel very good about what we did,” Ellison said Wednesday, confirming that Oracle hired Investigative Group International Inc. to spy on allies of rival Microsoft.

Ellison said the work showed Microsoft paid the Independent Institute of Oakland, Calif., and the National Taxpayers Union of Arlington, Va., to influence public opinion in Microsoft’s favor during its federal antitrust trial.

The work by IGI 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.

One analyst called it a Watergate-style dirty tricks campaign. But another called it standard procedure in Silicon Valley, where many companies engage in corporate espionage.

”The only thing more disturbing than Oracle’s behavior is their ongoing attempt to justify these actions,” Microsoft spokesman Greg Shaw responded.

”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,” Shaw said.

Ellison, whose rivalry with Microsoft Chairman Bill Gates is well known, challenged Microsoft to do a similar investigation of Oracle.

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

Details of the incident involving the rival software giants were 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.

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.

”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, who has watched Oracle for more than a decade. ”It really speaks to the bitterness of the competition against Microsoft.”

But another called it typical behavior for Silicon Valley.

”Everybody knows Oracle is a hard-charging company. This just confirms that, ” he said. ”The only real surprise here is that it came out in public.”

The Independent Institute’s president, David Theroux, said Wednesday that his organization’s work is in fact independent, and that Microsoft’s funding in no way amounted to a public relations contract.

”The fact that Microsoft has been a member of The Independent Institute for the past two years has not altered any aspect of the substance or conclusions of our consistent and indeed independent work, stretching back over ten years,” Theroux added.

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On the Net:

Investigative Group International: http://www.igint.com

Independent Institute: http://www.independent.org

Association for Competitive Technology: http://www.competitivetechnology.org

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”I feel very good about what we did,” Ellison said Wednesday, confirming that Oracle hired Investigative Group International Inc. to spy on allies of rival Microsoft.

”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.’ ‘

Ellison’s comments were made during a news conference meant to tweak Microsoft with the introduction of a new Internet product designed to improve the performance of Web sites.

The event quickly turned into a media circus as reporters only vaguely familiar with Oracle’s business flocked to the company’s headquarters to find out more about the latest chapter in the bitter rivalry between Ellison and Microsoft Chairman Bill Gates.

Ellison said the detective work showed Microsoft paid the Independent Institute of Oakland, Calif., and the National Taxpayers Union of Arlington, Va., to influence public opinion in Microsoft’s favor during its federal antitrust trial.

The work by IGI 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, a natty dresser, told reporters at Oracle’s headquarters.

But Ellison said he had no problems with any other aspect of the investigation including the fact that Oracle had leaked its findings to selected media outlets for more than year.

”We weren’t engaging in corporate espionage. We were just doing investigative reporting,” he said.

One analyst called it a Watergate-style dirty tricks campaign. But another called it standard procedure in Silicon Valley, where many companies engage in corporate espionage.

”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,” Shaw said.

Ellison said Oracle isn’t investigating any other companies. ”There are no other companies that are like Microsoft. They are special and we treat them specially.”

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.

But another called it typical behavior for Silicon Valley.

”Everybody knows Oracle is a hard-charging company. This just confirms that, ” he said. ”The only real surprise here is that it came out in public.”

A spokesman for the Independent Institute said the nonprofit group never tried to hide its connections to Microsoft. Rob Latham said Microsoft has only been involved with the 14-year-old Independent Institute for the past two years. He declined to identify other businesses backing the institute.

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 news conference Wednesday, Ellison accused the group 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. Oracle’s Washington, D.C. lobbying office, which hired IGI, has an annual budget of less than $1 million, Ellison said.

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On the Net:

Investigative Group International: http://www.igint.com

Independent Institute: http://www.independent.org

Association for Competitive Technology: http://www.competitivetechnology.org

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Oracle Corp. chairman Larry Ellison defiantly owned up to hiring a private investigator to look into the ”covert activities” of Microsoft Corp., saying his company was only doing its civic duty.