REDWOOD SHORES, CALIF. (06/28/2000) - Oracle Corp.'s chairman and chief executive office Wednesday defended his company's decision to hire a detective firm to investigate three advocacy groups that have acted favorably towards Microsoft Corp. At the same time, the Oracle chief sought to play down his personal involvement in the investigation, at first denying any knowledge of it.

"We've gathered enough evidence to indicate these are not independent groups as they pretend to be," Oracle Chairman and CEO Larry Ellison said, speaking at a press conference at the company's headquarters here. "We got evidence -- we proved -- that these organizations were paid for by Microsoft's public affairs and legal departments."

Reports have recently surfaced that Oracle had hired the Washington, D.C detective firm Investigation Group International Inc. (IGI) to monitor the activities of three advocacy groups -- the Independent Institute, the National Taxpayers Union, and the Association for Competitive Technology (ACT). Oracle accused the groups of masquerading as "independent advocacy groups" when they are in fact funded largely by Microsoft. [See "MS/DOJ: Think Tank Decries Oracle Investigation," June 28.]Answering questions from reporters, Ellison at first denied all knowledge of IGI's investigation, which he said was launched a year ago by Oracle's legal affairs group in Washington. The first he knew of the investigation, he said, was when he read reports about it in Tuesday's New York Times.

"I never knew anybody was going through people's garbage. I don't approve of going through people's garbage," Ellison said. "I had never heard of IGI until yesterday. I never knew we were doing any of this stuff."

According to the Times article, IGI tried to bribe the cleaning staff in at least one of the organizations to turn over the contents of trash bins.

When pressed by reporters here, Ellison acknowledged being aware that the investigation was underway, but said that he didn't know what methods were being employed, or who was conducting it.

"Did I know we were investigating Microsoft's covert efforts to unduly influence public opinion? Absolutely," Ellison said. "Do I take full responsibility? Yes, absolutely. It happened on my watch. I authorized the funding."

Some pundits are already referring to the affair as "Larrygate," after the Watergate scandal that eventually toppled the administration of U.S. President Richard Nixon in the early 1970s.

The investigation of Microsoft was justified because it exposed the software giant's "covert" funding for public advocacy groups in an effort to sway public opinion during Microsoft's antitrust trial, Ellison said. In a series of animated responses to reporters' questions, he slammed the advocacy groups as being Microsoft puppets working on the software maker's behalf.

"The Independent Institute is neither independent nor an institute," Ellison quipped. The Association for Competitive Technology is "supposed to be supporting all Americans. In fact, it supports just two Americans, (Microsoft's) Bill Gates and Steve Ballmer, and it was our intention to expose that."

The three groups involved have vehemently denied any wrongdoing. In a statement issued Tuesday, the Independent Institute professed disappointment at what it called Oracle's attempt to "smear us by calling into question the legitimacy of our 14-year scholarly, public-policy research program."

"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," said David Theroux, founder of the Independent Institute, said in the statement.

Microsoft also responded to Ellison's comments today.

"The only thing more disturbing than Oracle's behavior is their ongoing attempt to justify these actions," the Microsoft statement said. "Mr. Ellison now appears to acknowledge that he was personally aware of and personally authorized the broad overall strategy of a covert operation against a variety of trade associations.

"This is dramatic evidence that Microsoft's competitors have engaged in a massive and ongoing campaign to unfairly tarnish Microsoft's public image and promote government intervention to benefit themselves," Microsoft said in the statement.

Ellison sought to maintain the moral high ground.

"I feel very good about telling you about what we did," he said. "Maybe our investigating organization did some things that were unsavory -- certainly from a personal hygiene point of view. But we got the truth. I believe in full disclosure."

He challenged Microsoft to launch a similar investigation of Oracle.

"We'll ship them our garbage," Ellison said, with obvious relish. "We will send all of our garbage to Redmond and they can go through it."

Oracle, in Redwood Shores, California, can be reached at +1-650-506-7000 or via the Internet at http://www.oracle.com/.