SALEM, Ore. (AP) - Oregon has taken new steps toward a potential lawsuit against the developers of its failed health insurance website by hiring a phalanx of lawyers and issuing demands for evidence and other material that could be used in a civil case against technology giant Oracle Corp.
Legal demands for potential evidence were issued Monday, officials in the governor's office and the state Department of Justice told The Associated Press. But they declined to say how many of the so-called civil investigative demands were issued or whom they target. They are the first such demands issued in preparation for potential litigation against Oracle, said Kristina Edmunson, a department spokeswoman.
In addition, documents obtained by the AP show the state last month more than quadrupled its contract with a law firm handling the case, raising it from $550,000 to more than $2.5 million.
Gov. John Kitzhaber blames Oracle for bungling the software for Cover Oregon, the state-run site that was supposed to allow residents to sign up for insurance under the federal health law.
The state paid Oracle, the second-largest software corporation in the world, $134 million in federal funds to build the online enrollment system. The website never fully launched, requiring staff to process part of each application by hand in a slow and costly maneuver. Altogether, about $250 million in federal funds has been spent on Oregon's exchange, including technology development, salaries, advertising and rent.
An Oracle spokeswoman declined to comment. In past public statements, the company has defended its work, saying the state did not deliver requirements in a timely manner and failed to staff the project with skilled personnel. The company has said Kitzhaber "wants to shift blame from where it belongs."
The state decided to ditch the Oracle-built website and use the federally run exchange.
The civil investigative demands issued Monday are similar to subpoenas and are used by the government to seek information that could be used in a lawsuit. They can help lawyers decide whether to sue over unlawful business practices or false claims.
It's unknown how much a lawsuit would cost, but Nkenge Harmon Johnson, a Kitzhaber spokeswoman, said the state may be able to recover legal fees if it wins.
Portland law firm Markowitz Herbold Glade & Mehlhaf PC has been paid $352,000 so far to prepare for a potential lawsuit and their contract now allows them to bill the state up to $2.5 million.
In addition, the state has racked up legal bills to defend itself in multiple investigations over Cover Oregon's failures, according to documents obtained by the AP.
The state has retained two Washington, D.C., lawyers to help Oregon with an investigation by a U.S. House committee. A Portland criminal defense attorney also was hired in response to an investigation by the FBI and U.S. Attorney's Office, according to the documents, which include contracts and billing summaries obtained under Oregon's public records law.
To help with the investigation by the Republican-controlled House Committee on Oversight and Government Reform, the state hired Elliot Berke, who has been a lawyer for former House GOP leaders, and his law partner, Democratic attorney William Farah. Their firm was paid $17,000 last month before they founded their own firm, which has a contract worth up to $100,000.
The lawyers have helped facilitate the release of thousands of documents the committee requested March 25.
The state also turned to Portland attorney Robert Weaver, a former federal prosecutor who has defended a number of high-profile criminal defendants, including figure skater Tonya Harding.
Weaver is representing the state and its current and former employees in a federal criminal investigation. The U.S. Attorney's Office has issued subpoenas to state agencies seeking, among other things, communications between 10 officials involved in developing and overseeing the Cover Oregon website.
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Full coverage of the troubled Cover Oregon website:
- Breach of contract lawsuit from 2011 could tip scales in Cover Oregon claims
- Attorney about Oracle lawsuit: "(It's) like throwing a rock at a hornet's nest'
- Gov. Kitzhaber seeks lawsuit over Cover Oregon health exchange
- Drastic call for full audit of Cover Oregon edited out of 'missing' Maximus report
- Subpoenas issued in Cover Oregon investigation
- Retiring Cover Oregon manager fires off damning email about state leaders
- Emails further suggest Cover Oregon used 'smoke and mirrors' for fed money
- New emails suggest Cover Oregon leaders started celebrating far too early
- KATU investigation finds Oracle shares blame with Cover Oregon for website disaster
- Panel recommends Oregon move to federal health exchange
- Oracle says it's not to blame for failed launch of Cover Oregon
- No decision on future of Cover Oregon but options narrowed to two
- Report: Federal exchange cheapest fix for Cover Oregon
- Cover Oregon goes to Congress, defends work that's been done
- Cover Oregon invites public to once-secret oversight meetings
- Top Cover Oregon IT official resigns
- Cover Oregon: Apply for insurance in April and avoid federal penalty
- Cover Oregon makes secret meetings public, won't explain the change
- Secret Cover Oregon oversight meetings may violate public meetings law
- Cover Oregon announces $1 million ad blitz to raise awareness
- Months later, Gresham woman still wondering if she has health insurance
- Portland tech company to governor: We can fix Cover Oregon's website
- State granted one-month extension for Cover Oregon enrollment
- First Data report: Cover Oregon didn't have federally required backup plan
- Watch: Your Voice Your Future Town Hall: Cover Oregon
- Cover Oregon confessions: Are they playing games with your health?
- New report answers many Cover Oregon questions - often for second time
- Cover Oregon directory Goldberg resigns; Governor releases investigation findings
- Cover Oregon: Still pushing for deadline extension
- Oregon tied for last in nation for young-adult health-insurance sign-ups
- Cover Oregon: Apply now if you want health insurance this year
- Federal government announces Cover Oregon investigation
- Former Cover Oregon director says 'all of us' share blame for failures
- Top Cover Oregon official refuses to discuss Lawson resignation
- Official: Oracle not allowing Cover Oregon probe access to 6 employees
- Trouble with Cover Oregon? You may still get federal tax credits
- Cover Oregon website developer pulls 100 worker off project
- Ex-Cover Oregon website chief: 'I stuck to the talking points ... they were not accurate'
- High-level IT consultant on Cover Oregon: 'They didn't know what they were doing'
- New Cover Oregon allegations: 'If it's true, someone's going to prison.'
- Paging Dr. Kitzhaber: What did the governor know about Cover Oregon collapse?
- State rep., U.S. Senate candidate calls for the end of Cover Oregon
- Cover Oregon head: State might scrap all or part of failing website
- State lawmakers to grill Cover Oregon chief
- Family struggles to sign up for insurance through Cover Oregon
- First legal complaint filed over health enrollment mistakes
- Democratic state lawmaker believes Cover Oregon can be saved
- Contractor plans to examine why Cover Oregon failed
- 'We look like fools:' A history of Cover Oregon's failure
- State rep: Ditch Cover Oregon in favor of federal exchange
- Video: Exclusive Interview: Gov. John Kitzhaber - Cover Oregon 1/9/2014
- Gov. denies prior knowledge of Cover Oregon failure, exits exclusive KATU interview
- Kitzhaber outlines Cover Oregon's next steps: 'I can't give you a date'
- Kitzhaber: Firm will review Cover Oregon failures
- Cover Oregon applications left in limbo?
- Man with cancer waiting on Cover Oregon, gets insured
- Man with cancer still waiting on Cover Oregon
- New calls for Cover Oregon to take responsibility for project failures
- Rocky King, director of troubled Cover Oregon, resigns
- Salem man says Cover Oregon error left him in health care limbo
- Some question if they'll be covered by Cover Oregon in the new year
- What doomed Cover Oregon? 'Mismanagement,' say former employees
- After resigning, Lawson not talking about Cover Oregon website failures
- Ore. health official in charge of building Cover Oregon website resigns
- Fewer enrollments challenge Oregon exchange budget
- Executive director of Cover Oregon taking medical leave
- Cover Oregon considers new solutions
- Kitzhaber calls for independent review of Cover Oregon
- New emails show Cover Oregon unraveling in days before launch
- Emails: Cover Oregon executive knew about website problems in May
- Cover Oregon complicated by state's grand vision