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SAP wants racketeering claims thrown out

Chris Kanaracus | Feb. 24, 2011
SAP wants a judge to toss out allegations by the government of Marin County, California, that it engaged, along with Deloitte Consulting, in a racketeering scheme meant to bilk the county out of more than $20 million in connection with a troubled ERP (enterprise resource planning) project.

FRAMINGHAM 24 FEBRUARY 2011 - SAP wants a judge to toss out allegations by the government of Marin County, California, that it engaged, along with Deloitte Consulting, in a racketeering scheme meant to bilk the county out of more than $20 million in connection with a troubled ERP (enterprise resource planning) project.

Marin County has already decided to rip out the SAP system and replace it with an alternative. It initially filed suit last year against Deloitte, which consulted on the project, and later also sued SAP.

SAP's motion, filed Wednesday in US District Court for the Northern District of California, argues that "the vast majority of the factual conduct alleged in the Complaint does not involve SAP."

Although SAP's Public Services division sold the software to Marin County, it "is not alleged to have been defective or to have been misrepresented. Nor is SAP alleged to have been engaged to implement the software," it states. "The allegations sound like a claim for breach against Deloitte, as the County separately has alleged in another proceeding."

"The County thus must spin -- to an almost unrecognizable state -- the few 'facts' it can allege against SAP," it adds.

Marin County has also sued Ernest Culver, a former county worker who acted as project director and later took a job at SAP. The county has alleged Culver was "approving Deloitte's deficient work on the project, approving payments, and causing Marin County to enter into new contracts with Deloitte and SAP" while he was interviewing for jobs at both companies.

In addition, Deloitte wined and dined Culver repeatedly, according to the county.

But in its motion, SAP said the county gave it written consent to discuss employment with Culver before any talks with him began.

"The County represented that Culver had informed the County that he intended to pursue employment opportunities with SAP and, should a job offer result from discussions to which the County was consenting, it would not affect the County's and SAP's relationship," the motion adds.

SAP's motion also attacks the county's racketeering claim on grounds that it would be ludicrous for SAP to join Deloitte in such a pattern of behavior.

"There is no plausible reason -- much less factual support -- for a scheme in which SAP would partner with Deloitte knowing that Deloitte could not implement its software correctly and intending that the County be damaged," it states. "It strains the imagination to suppose a business rationale that could exist for such a plan."

 

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