Sunday, April 30, 2006

Venezuelan Ownership of Smartmatic: Technically accurate but misleading...

This piece is from the pro-Chavez website

Miami Herald (Jack A. Blaine): Re: Richard Brand's March 27 Other Views piece, Forget Dubai -- worry about Smartmatic instead. Contrary to Brand's implications, Smartmatic's electronic-voting system with an auditable paper trail performed well in 2004s recall referendum in Venezuela.
International observers from the Carter Center and the Organization of American States monitored and audited the election and upheld Venezuelan President Huga Chavez's win.
In fact, the Carter Center's final report investigated all charges, saying, "The audit concluded the voting machines did accurately reflect the intent of the voters as evidenced by a recount of the paper ballots in a sample of machines..."
"The Center found no evidence of fraud.''
Brand alleges that Smartmatic's partner in the recall referendum was ''partly owned by the Venezuelan government.'' This is technically accurate but misleading. Specifically, the Venezuelan Industrial Credit Fund -- the equivalent of the US Small Business Administration -- did hold a 28% non-permanent, minority equity position in Bizta via a routine loan. A member of the consortium that handled the recall, Bizta adapted the voting software to enable it to include the manual vote. Bizta repaid the loan before the referendum.
Smartmatic Corp. is a US company, incorporated in Delaware with principal offices in Boca Raton. No shares in Smartmatic have ever been held by a foreign government. A controlling interest is held by its founder and CEO, Antonio Mugica, a dual Spanish and Venezuelan citizen. Before its merger with Smartmatic in 2005, Sequoia was owned by a British company, which had purchased it from another European company. Neither owner was in the voting industry.
The notion that hostile foreigners have acquired influence in the US voting process doesn't stand up.
All Sequoia Voting Systems software has been tested by federal independent testing authorities, qualified by the federal government and certified by individual states.
Moreover, Sequoia is a US leader in Voter Verifiable Paper Audit Trail technology, which combines electronic systems with a fully auditable paper trail, one Americans can see and approve.
Jack A. Blaine is president of Sequoia Voting Systems, Inc., Oakland, Calif.

Friday, April 28, 2006

SMARTMATIC ON THE DEFENSE: CHICAGO TRIBUNE,1,1287757.story?coll=chi-newslocalnorthwest-hed

Voting-machine maker on defense
Election trouble puts exec on the hot seat

By John McCormick
Tribune staff reporter
April 27, 2006
Jack Blaine, president of the company that made the voting machines used in Cook County's glitch-filled March primary, is used to jetting around the country selling election equipment.
These days, however, the head of Sequoia Voting Systems is racking up frequent flier credits defending his products to angry election officials and testifying before committees.Outcomes in Chicago's March 21 primary went undetermined for days, and the problems cast doubts on more than $50 million of new Sequoia equipment.
Besides shaking the confidence of voters, the problems have also tarnished Sequoia's reputation, providing the latest hit for an industry that is the frequent target of electoral conspiracy theories.As the company's invoices to Chicago and Cook County remain unpaid in protest, a committee of the Cook County Board will hold a hearing Thursday to look at how similar problems can be prevented in November.
The State Board of Elections and a committee of the Chicago City Council have already held similar inquiries.Election officials have acknowledged a lack of training for election judges who were using the new and complex system.
But they have also pointed fingers at Sequoia, saying the firm and its equipment did not perform adequately.The company says that's unfair.
"The only major disappointment was the slow tabulation of the results," Blaine said in a recent interview. "We can improve on the user-friendliness of the equipment."
While the company has previously found itself embroiled in disputes in Florida and Washington state because of equipment failures and other issues, its reputation has never before taken such a blow from a single election in the U.S.The confusion in Cook County--primarily from widespread failures in the remote reporting of results from polling places--was reported on the front page of the Pittsburgh Post-Gazette in late March, just as officials in Allegheny County, Pa., were finalizing an $11.8 million contract with Sequoia.
Although different machines were to be used in Pennsylvania, the experience in Chicago and suburban Cook County concerned Allegheny officials enough that they went with another vendor."
I gotta believe this had an impact on it," Blaine said. "But I know of no other [business] fallout."
Much of the angst about Sequoia is related to its purchase in March 2005 by Smartmatic Corp., a company that provided voting machines for the controversial 2004 recall election of Venezuelan President Hugo Chavez. Smartmatic's involvement in U.S. elections troubles some, including Chicago Ald. Edward Burke (14th), who has suggested that the company's equipment could be part of a Venezuelan conspiracy to subvert American democracy.
Chicago and Cook County election officials, meanwhile, were aware of the international controversy surrounding Sequoia well before they awarded the company contracts.
A county consultant pitched Smartmatic's foreign ties as an advantage."Smartmatic, which provided the election machines for the Venezuelan vote, can rightly claim that they have conducted one of the most closely watched, carefully audited, and statistically analyzed elections in recent history," Oak Park-based Major Scale Technology Management wrote in a memo to Cook County Clerk David Orr's office.
Sequoia is on its second owner since 2000, when companies started to see a potential windfall from the call for improved voting technology following the controversial presidential election that year.
More than 97 percent of Smartmatic, a privately held company like Sequoia, is owned by the firm's four founders, the company said in a letter responding to Burke's hearing.
Antonio Mugica, the company's chief executive officer, owns 75 percent of the shares.
Whatever baggage Sequoia had prior to its selection, election officials would likely have faced similar criticism had they picked other vendors.
"All of the major manufacturers have had significant problems in counting the vote accurately and, in some cases, ethical issues as well," said Bev Harris, founder of Black Box Voting, a national voting watchdog group.
Ohio-based Diebold Inc., for example, has been mired in controversy since its former chairman pledged in a letter to deliver victory for President Bush in Ohio in 2004.
The company, one of the finalists here, has since taken steps to isolate itself from politics.Although Sequoia's offices are only a short drive from Silicon Valley, home to hundreds of high-tech companies, most of its products are manufactured on contract by two New York firms, Jaco Electronics and Harvard Custom Manufacturing.
Officials say it would be almost impossible to change vendors in time for the November election--and also potentially costly.
Still, Diebold has since tried to reopen discussions following the Sequoia flap.
"We have made an offer to sit back down with them and offer a proven solution," said David Bear, a company spokesman.

Copyright © 2006, Chicago Tribune

Saturday, April 22, 2006

America...Will This Be Us Soon?

Hat Tip to:

On Teodoro Petkoff's candidature
By Aleksander Boyd
London 22.04.06 The Venezuelan political lansdcape is in such pathetic state that the official announcement made by Teodoro Petkoff regarding his participation in the presidential race this year has been greeted with sheer contentedness, almost in all quarters. Repeating past errors, Venezuelans have, yet again, choose to ignore former deeds and credentials of the latest candidate to join the race. And in times like these, I conclude that my countrymen deserve Hugo Chavez and Fidel Castro and any other disgrace brought upon by their own stupidity.
As readers of this site may have realised, Petkoff is no saint of my devotion. The fact that he was a Marxist guerrillero once upon a time and purportedly participated, along with Cubans, in the Machurucuto invasion in 1967 is more than enough for me to distrust the man for good. By mere coincidence me and my wife lived, years ago, in her grand father's house. From him, founder of Partido Comunista de Venezuela (PCV) and guerrilla comrade, I heard many first hand accounts of Petkoff's opportunistic and duplicitous nature. Aside from these Petkoff has devoted his entire life to communist and leftist ideals.
But let me clarify something, my dismissal of Petkoff has got nothing to do with whatever he did when he was a clueless adolescent, working hard to cede the world's control to Fidel Castro-type of rulers. Rather his recent actions are cause of great concern. For instance, being a man who commands a wealth of information about the country's political situation, he strongly advocated and lobbied opposition actors to stay in the legislative race of last December, in spite of knowing, probably first hand owing to his affiliation to electoral observation NGO Ojo Electoral, that e-voting Smartmatic machines have been rigged, as demonstrated in the presence of local and international observers on November 23 in Fila de Mariches, all along. He went on to express that the opposition's withdrawal from the legislative election would affect, as it did, the democratic image of Hugo Chavez abroad, calling for the postponement of elections.
He will now participate in an electoral contest whose conditions, need be stressed, have not changed nor will they, that is to say, the same rigged Smartmatic machines shall be used, with the aggravant that this time round no respected international body is keen on observing the process. Worse still, as Venezuela's Electoral Council purchased from the e-voting machine vendor all operating software, codes, seeds, etc., and declared that due to "commercial reasons" -that have to do with industrial secrets, no one is allowed to audit, scrutinise or check in any manner whether the results reported are accurate or whether or not the process met the minimum requirements in terms of fairness.
So what purpose serves Petkoff's candidature, if not to lend a veneer of legitimacy to an otherwise already decided, and rigged, election? 10 million votes for Chavez, remember? It is also quite telling that high officials from chavismo have expressed joy at Petkoff's participation. What price will Venezuela pay for this adventure of a few selfish and irresponsible politicians, another 6 years of Chavez?
Many times I have said that a candidate whose levels of support are, supposedly, in a league of its own has nothing to fear. Chavez 'won' the recall referendum by a 20% margin, yet his electoral minions never allowed the opposition to scrutinise the vote properly, the utterly negligent international observers present at the time -Carter Centre and OAS- never had the chance to perform the functions expected of them. And I keep reaching the same conclusion, why the steadfast opposition to open up to transparency?
Teodoro Petkoff ladies and gentlemen, accessory in the demise of Venezuela's democracy.

Wednesday, April 12, 2006

Links to Anonymous Pro-Smartmatic Blogs

Yet Another Smartmatic Blog Appears

Smartmatic's anonymous, guerilla PR campaign continues. Here is another pro-Smartmatic website launched in recent days to defend the embattled Venezuelan voting company. These blogs are as shady as the company's origins. Here's the link:

Friday, April 07, 2006

Another Smartmatic Blog Appears From the Ether

These guys are staying busy writing fake blogs about themselves. It's not appropriate behavior for a company that will provide electoral services in the United States. If any IT guy out there can identify who is authoring all of these sites, please blow the whistle. The fate of our democracy depends on it. Here is the latest fake Smartmatic guerilla PR blog:

Thursday, April 06, 2006

New Smartmatic Blogs Appear Out of Nowhere

Who are these bloggers who have come out of the ether to support Smartmatic, all in the last week? Their sudden emergence, anonymous authorship and gushing praise for the Venezuelan company should raise questions about who is in fact authoring the blogs. I'm sure they're all written by the same guy. Here are just a sample:

Nothing Good Can Come of This

From The Miami Herald:

Forget Dubai -- worry about Smartmatic instead
The greater threat to our nation's security comes not from Dubai and its pro-Western government, but from Venezuela, where software engineers with links to the leftist, anti-American regime of Hugo Chávez are programming electronic voting machines that will soon power U.S. elections.
Congress spent two weeks overreacting to news that Dubai Ports World would operate several American ports, including Miami's, but a better target for their hysteria would be the acquisition by Smartmatic International of California-based Sequoia Voting Systems, whose machines serve millions of U.S. voters. That Smartmatic -- which has been accused by Venezuela's opposition of helping Chávez rig elections in his favor -- now controls a major U.S. e-voting firm should give pause to anybody who thinks that replacing our antiquated butterfly ballots and hanging chads will restore Americans' faith in our electoral process.
Consider the lack of confidence Venezuelans have in their voting system. Anti-Chávez groups have such little faith in Smartmatic's machines that they refuse to run candidates in elections anymore as reports surface of fraud and irregularities from Chávez's 2004 victory in a recall referendum. Yet somehow Smartmatic International and its Venezuelan owners were able to purchase Sequoia last year without the deal receiving any scrutiny from federal regulators -- including the Treasury Department's Committee on Foreign Investments in the United States (CFIUS), which is tasked with determining whether foreign takeovers pose security risks.
CFIUS generally investigates such transactions only when the parties voluntarily submit themselves to review -- which Smartmatic did not do. But it retains the authority to initiate an investigation when it suspects a takeover compromises national security.
Smartmatic has a brief but controversial history. The company was started in Caracas during the late 1990s by engineers Antonio Mugica and Alfredo Anzola. They worked out of downtown Caracas providing small-scale technology services to Latin American banks. Despite having no election experience, the tiny company rocketed from obscurity in 2004 after it was awarded a $100 million contract by the Chávez-dominated National Electoral Council to replace Venezuela's electronic voting machines for the recall vote.
When the council announced the deal, it disingenuously described Smartmatic as a Florida company, though Smartmatic's main operations were in Caracas and the firm had incorporated only a small office in Boca Raton. It then emerged that Smartmatic's ''partner'' in the deal, Bizta Corp., also directed by Anzola and Mugica, was partly owned by the Venezuelan government through a series of intermediary shell corporations. Venezuela initially denied its investment but eventually sold its stake.
When the vote finally came, exit polls by New York's Penn, Schoen & Berland Associates showed Chávez had been defeated 59 to 41 percent; however, when official tallies were announced, the numbers flipped to 58-42 in favor of Chávez. Venezuela's electoral council briefly posted machine-by-machine tallies on the Internet but removed them as mathematicians from MIT, Harvard and other universities began questioning suspicious patterns in the results.
Flush with cash from its Venezuelan adventures, Smartmatic International incorporated in Delaware last year and purchased Sequoia, announcing the deal as a merger between two U.S. companies.
Smartmatic says the recall vote was clean and that it is independent of the Chávez government. Responding to my inquiries, Smartmatic-Sequoias sent a written statement: ``Sequoia's products consist only of voting devices and systems, all of which must be federally and state tested and certified prior to use in an election. As Sequoia's products do not have military, defense or national security applications, they do not fall within the parameters of the matters governed by CFIUS.''
In fact, Smartmatic International is owned by a Netherlands corporation, which is in turn owned by a Curacao corporation, which is in turn held by a number of Curacao trusts controlled by proxy holders who represent unnamed investors, almost certainly among them Venezuelans Mugica and Anzola and possibly others.
Why Smartmatic has chosen yet again to abuse the corporate form apparently to conceal the nationality and identity of its true owners is a question that should worry anyone who votes using one of its machines. Congress panicked upon hearing that our ports would be run by an American ally, Dubai, but never asked whether America's actual enemies in Venezuela have been able to acquire influence in our electoral process.
Richard Brand is a second-year law student at New York University and a former staff writer for The Miami Herald.