Do You Know The Way to the New San Jose City Hall?

Cisco has always been very involved with San Jose local politics, and it seems that Cisco developed a very close relationship with various city hall staffers. The Mercury News had been sniffing at these issues for a bit, and finally, in response to their inquiries about the new City Hall, the city conducted an audit.

And yikes! It turned out that City staffers had sent a number of "inappropriate" emails to Cisco (the mind boggles) about the various specifications of City Hall's wireless needs, thus allowing Cisco to tailor its bid to meet San Jose's requirements. The City allowed Cisco to draft up a list of all the Cisco products that they should buy, and agreed to prep them for their defense of the plan before the City Council. You can sort of see how it happened – Cisco is a huge San Jose-based company, employs a large number of San Jose residents, and pays quite a bit of tax money to San Jose , so you can see why the City would want to keep them happy – but on the other hand, it also seems a little suspicious to basically guarantee that they'll get a contract to be paid for at city taxpayer expense and against all the policies of fair, open, and competitive bidding processes. (Sorry to be so square about it).

The day the news became public, Wandzia Grycz, San Jose's Chief Information Officer, resigned. (whoa -- San Jose has a CIO?) The reports showed that she and her staff had been responsible for most of the collusion, and in addition, had lied to investigators about it in the audit process. According to the report, she decided unilaterally that it made the most sense to use Cisco products because everyone in the office was already trained on their systems. Grycz was also briefly under criminal investigation for allegedly using her IT powers for evil and trying to intercept emails on the City Hall system about the investigation. The charges, however, were dropped when it turned out a computer bug in Microsoft (who maintains it's not a bug but in fact a feature) had made it look like Grycz had read the emails when she in fact had not.

So what happens next? San Jose has already decided that it is going to revamp significantly its contracting scheme to make sure more people look over decisions before they're approved. The second in command in the IT department also left, and the City General Manager was demoted. As for the new City Hall? Well, all construction has stopped. And since the builders had already begun wiring the building and installing computers with the Cisco products, they will have to pull all that out and start again, after a fair bidding process is completed. It's probably going to cost San Jose over $3 million. The lawyers are also circling the carcass – a lawsuit has been filed to try and stop the City Hall construction entirely, in light of a local ordinance that requires that all city construction projects be done at no cost to other city services. And Cisco's competitors, smelling blood (and rightfully so!), have lodged complaints about Cisco's business techniques. The Santa Clara County DA has formally opened a criminal investigation, and the City is laying the groundwork for filing a civil action as well.

SFist has a soft spot for San Jose's mayor Ron Gonzales, especially after he suffered a mild stroke on stage earlier this year during his State of the City speech, and went back to work about two weeks later. (He, needless to say, was cleared in the audit). It looks to us like he's taking a good, fair, firm position that this sort of thing is not going to happen again to San Jose. Meanwhile, does anyone need some Cisco routers and wires? No doubt San Jose will have a bunch cheap.