Venezuelan Ties to U.S. Voting Machines? What about the Others?

With just a few days left before the United States November congressional elections, electronic voting machines are back in the news. However, rumors of possible links between voting machines maker Smartmatic and the Venezuelan government should be the least of U.S. voter’s worries.

With just a few days left before the United States November congressional elections, electronic voting machines are back in the news.  HBO aired it’s new documentary entitled, “Hacking Democracy” last Thursday, which asked the question, “are electronic voting machines safe?” Democracy Now! hosted voting machine investigative journalist and founder of the consumer protection election group, Black BoxVoting.org,  Bev Harris, last Tuesday where she stated that “not only are the [voting] machines error-prone, they’re also tamper-friendly and that the companies that make them are in cover-up mode.”  Last week it was also reported that the Dutch government has decided to pull 10% of their machines for lack of security in advance of their presidential elections on November 22. 

But probably the biggest news last week regarding electronic voting machines, for US and Venezuelan voters, is the U.S. government’s current investigation of Smartmatic and rumors that the voting machine manufacturer may potentially have links to the Venezuelan government.  Smartmatic is the privately owned Venezuelan parent company of Sequoia Voter Systems, one of the oldest and top voting machine manufacturers in the United States.  Smartmatic itself provided the machines for the 2004 Venezuelan Referendum, and is in charge of providing the voting machines for the Venezuelan Presidential elections, which are set for December 3.

The investigation taking place in the U.S. Committee on Foreign Investment in the United States (CFIUS) stems from allegations that the Venezuelan government once held stake in a software company partially owned by two of the owners of Smartmatic.  Rumors take the claims even further, attempting to prove that Smartmatic machines used in the 2004 Referendum against Venezuelan President Hugo Chavez were rigged, thus leading to the President’s “illegitimate” win with 59% of the vote. 

There is an understandable growing consensus of citizens on both the right and the left, in the United States and in Venezuela, who believe that electronic voting machines are a bad idea. With “error-prone” and “tamper-friendly” machines, a laundry list of malfunctions, and  

with close to 90% of the United States now voting on electronic machines, high-profile people such as Maryland Governor Robert L. Ehrlich have even made the call to go back to paper ballots. 

With major machine malfunctions and an undeniable conflict of interest between all major voting machine manufacturers and their private interests, it appears that the rumors of possible links between Smartmatic and the Venezuelan government should be the least of U.S. voter’s worries.

Regardless of the findings of the Commission, the investigation appears to have been more than welcomed by Smartmatic and Sequoia officials, who announced last Sunday that “contrary to reports… we have voluntarily filed with CFIUS to put to rest the baseless but persistent rumors about our ownership.”

“We expect that when the investigation is complete, these questions about ownership and baseless allegations and conspiracy, will be put to rest,” said Michelle Shafer, Communications Vice President of Sequoia Voting System last Monday evening.

According to Sequoia, confusion regarding the involvement of the Venezuelan government in Smartmatic’s software pseudo-sister company, Bizta, stems from a $150,000 loan the company received  in 2003 by the Venezuelan Industrial Credit Fund (Fondo de Credito Industrial) – the equivalent of the U.S. Small Business Administration. “Bizta pledged 28% of its shares as a guarantee for this routine loan. The loan was paid in full in 2004 prior to the Recall Referendum.”

Conversly, the Miami Herald reported in 2004 that the Venezuelan government actually owned 28% of the company for a period of time just before the 2004 Referendum, thus apparently proving a conflict of interest between the Venezuelan government and the pair of Smartmatic owners with shares in Bizta. 

Of course, Smartmatic officials deny this hypothesis, but it highlights just one of the many points that the Venezuelan opposition has consistently turned to, to claim that the 2004 Referendum was fraudulent, Chavez’ victory “illegitimate” and the Smartmatic machines, suspect.

Lou Dobbs, CNN, and 2004 Venezuelan Smartmatic Fraud?

On June 6th, Lou Dobbs, aired on CNN one in a series of elections pieces.  Unfortunately, in this particular report, entitled Democracy at Risk, he did an excellent job as a mouthpiece for the Venezuelan opposition, in their attempts to call foul play in the 2004 Referendum and the Smartmatic machines—attempts that have been completely discredited by the Organization of American States, the Carter Center and various international studies and reports.

CNN Correspondent, Kitty Pilgrim, reported on the show, “Many experts say those voting machines were manipulated in Venezuela to give President Hugo Chavez a victory. Exit polls done by the U.S. firm Penn, Schoen & Berland had Chavez losing 41 percent to 59 percent. But the next day, Chavez declared victory, reversing the score, saying he won 59 percent of the vote.”

This has been a long-standing hypothesis held by members of the Venezuelan opposition. However, with a further in-depth investigation, the theory simply doesn’t hold water.

First off, the elections were certified as legitimate by international observer delegations from the Carter Center and the Organization of American States (who, far from being Chavez supporters, some consider to be influenced by the United States).  A week after the referendum and a post-election partial audit of the electronic voting machines—comparing the paper ballots produced at the time of each electronic vote with those same electronic tallies—the Carter Center again declared, “The automated machines worked well and the voting results do reflect the will of the people.”

Independent studies where further carried out by experts from the University of California (Berkeley), Johns Hopkins, Stanford University, and the University of Utah, which showed “no statistical evidence of fraud.”

As for the Penn, Schoen & Berland (PS&B) poll. It is now fairly widely known that the firm paid members of the opposition to carry out their survey.  According to the Associated Press story from August 19, 2004, entitled “U.S. Poll Firm in Hot Water in Venezuela,” election observers declared that members of the partially US-funded, Venezuelan opposition group, Súmate, were doing fieldwork for the poll.  A Súmate official further verified that PS&B “supervised” the exit poll carried out by Súmate.

This was not the first time that the company had released suspect polling results during a controversial election.  Among others, there are claims of PS&B’s work in the 2000 Mexican elections and the Serbian elections that same year.  The Washington Post reported on September 19, 2000, that as part of a $77 million US campaign to get rid of Yugoslav President Slobodan Milosevic,

“U.S. aid officials and contractors are working to strengthen Serbia’s famously fractured democratic opposition. They have helped train its organizers, equipped their offices with computers and fax machines and provided opposition parties with sophisticated voter surveys compiled by the same New York firm that conducts polls for President Clinton [PS&B].”

A report released on August 19, 2004, by the Center for Economic and Policy Research (CEPR) in DC, further took on PS&B’s declaration that their Venezuelan Referendum poll carried a percentage of error of 1%.  According to CEPR, “The chance of a properly constructed survey resulting in such an error [of 1%] is incomprehensible- far less than 1 chance in 10 to the 490th power.”

“Given that international observers found no evidence of fraud, the methodology of this exit poll must be called into question,” continued the report. “It is nearly impossible that this result could have been obtained through sampling error.”

CEPR director, Mark Weisbrot, who has researched the topic extensively, further challenged  the Dobbs report, by highlighting  that “the sources that appeared and were cited by the [Dobbs] piece were all part of the Venezuelan opposition and/or paid by the Venezuelan opposition.”

“There is as much doubt about the results of the [2004] referendum, as whether Ronald Reagan beat Walter Mondale in 1984,” said Weisbrot in an interview this week, “What this Lou Dobbs segment reported on the Venezuelan referendum is akin to a report on the September 11 attacks based only on the research and testimony of conspiracy theorists who claim that the Pentagon was not hit by a plane and the towers were demolished by internal explosions.”

While voicing the concerns of many, Dobbs also incorrectly characterized the Venezuelan machines when he said, “Well, let’s be clear. It is absolutely demonstrable that with the use of electronic voting machines, in which we do not have verifiable receipts and a way of independently auditing those votes—democracy is at risk anyway as we approach the midterm elections.”

Fortunately for Venezuelans, all Smartmatic machines used in Venezuela, including those used during the 2004 Referendum, are required to produce a “verifiable receipt,” in order to “independently audit those votes.”  It was with these paper receipts that international observers where able to carry out the post-election audit of the Referendum.  In the United States, however during the 2004 Presidential elections, only one state, Nevada, required its voting machines to produce a paper receipt (known as Voter Verifiable Paper Audit Trail technology).  According to Sequoia officials, who supplied the machines to Nevada in 2004, there are now 27 states in the US that require the verifiable paper receipts.

Voting Machine Troubles

As Bev Harris pointed out on Democracy Now! last week, the voting machines in the U.S. are “error-prone… tamper-friendly and that the companies that make them are in cover-up mode.”

Jim March, board member of BlackBoxVoting.org, pointed out last Thursday that in fact, “with in the last thirty days, there have been reports of manipulation of Sequoia machines,” referring to the so-called “yellow button problem” where certain Seqoia machines come equipped with yellow button on the back of the machine that, when held down, allows voters to vote more than once.  According to March, the only “saving grace” is that there “would be an audible chime with each vote,” hopefully coming to the attention of the poll workers.  This is just one of a number of various malfunctions which have surfaced in almost every voting machine on the market.

March stated that he and Harris have mainly focused their investigations on voting machines from the manufacturer Diebold Election System because of their lack of security, which allowed 40,000 private company files to be open to the public.  Nevertheless, according to March, all of the voting machine companies have problems. 

March additionally explained that the failures go further than just the machines and the manufactures. In the United States, he said, there is supposed to be Federal oversight of the voting machines and the companies that manufacture them.  However, he has documented several cases involving Diebold, where this oversight process failed.

“If the Federal oversight process failed with Diebold, did it do any better with the others?” March asked. “The latest evidence says no.”

Conflict of Interest

Bev Harris says she began investigating electronic voting machines, when she “discovered a Republican senator from Nebraska [Chuck Hagel] who was running for office had ownership in the company that was counting his own votes.”  

According to Harris, in an Alternet article from October, 2003, the main owner of the company, Election Systems & Software, is a company owned by Senator Chuck Hagel’s campaign finance director, Michael McCarthy.  Hagel owned shares in both of the companies and “Hagel was the CEO and Chairman of the voting machine company while it built the machines that counted his votes.”

According to Jim March, all three of the original founders of Global Election Systems—the Canadian company that was bought out by Diebold in January, 2002—were convicted felons in investment and stock fraud.  March hypothesizes that they wanted to use the voting machines as a form of insider trading, since they could potentially rig the election. 

Speaking of Diebold, an article by the Cleveland Plain Dealer reported on August 28, 2003, that Walden O’Dell, chief executive of Diebold Inc., “told Republicans in a recent fund-raising letter that he is ‘committed to helping Ohio deliver its electoral votes to the president next year.’”

According to the same article, Republican Ohio Secretary of State Ken Blackwell, “said Diebold is not the only company with political connections – noting that lobbyists for voting-machine makers read like a who’s who of Columbus’ powerful and politically connected.”

Harris reported in 2003 that “O’Dell sponsored a $600,000 fund raiser for Dick Cheney in July. Diebold director W.H. Timken is also an avid Bush supporter.”

The list goes on, but the picture is clear.  Every one of the major voting machine manufacturers has a conflict of interest with the impartial and fair election that they are supposedly attempting to carry out.  Furthermore, according to Jim March, there is no oversight committee to regulate who owns what, who is supporting who, and who should or should not be allowed to receive the voting machine contract for a region in which there may be a conflict of interest.

It is good that Smartmatic is under investigation.  Regardless of what the results of the commission may turn out to be, the voters have a right to know who is in control of the system they are using to decide the fate of their country.  They also deserve to know that their vote is being counted.  But it is important to keep in mind that Smartmatic is but one company, and the other major voting machine manufacturers also have their major defects, their owners, and their own potential conflicts of interest, which should also be under Federal investigation by the United States government.