NY TIMES: Voting Machine Company Submits to Inquiry
By TIM GOLDEN
Officials of a major American voting-machine company that has come under federal scrutiny because of its primary owner’s past business ties to the leftist government of Venezuela said yesterday that the company had voluntarily submitted to a federal investigation into its purchase.
The American company, Sequoia Voting Systems, was bought in March 2005 by the Smartmatic Corporation, a Venezuelan-owned software company whose only previous experience in the voting-machine business had been to overhaul Venezuela’s electoral machinery before a referendum that confirmed Hugo Chávez as president in August 2004.
Brookly McLaughlin, a spokeswoman for the national security body conducting the investigation, the Committee on Foreign Investment in the United States, said she could not comment on which side opened the inquiry or when it began.
But another government official, who requested anonymity because the process is secret, said that Sequoia had submitted to the formal inquiry only in recent weeks, nearly three months after it was first contacted and asked for information.
At a news conference in Washington yesterday, officials of Smartmatic and Sequoia said they were eager to prove they had nothing to hide.
“The acquisition does not pose any national-security risk,” a lawyer for the two companies, Jeffrey P. Bialos, said of its purchase for $16 million from a British company, De La Rue.
But by asking that the committee begin a formal inquiry, Smartmatic also appears to have forced the government’s hand. Such inquiries are limited to 30 days, although they can be followed by more rigorous 45-day investigations if questions remain.
The government official who requested anonymity said several federal agencies had begun examining Smartmatic before the company requested the committee’s review.
Foreign investors in areas like military manufacturing usually submit purchases for the committee’s review before transactions are consummated. But after the political furor over a Dubai company’s approved takeover of operations at six American ports, legislators have pushed the Bush administration to strengthen and expand the reviews.
The government’s interest in Smartmatic stems from questions about the relationship between its principal owners and the government of Venezuela.
The company’s founder and principal owner, Antonio Mugica Rivero, said he and an early partner, Alfredo Anzola, were young software engineers living in South Florida during the recount of the 2004 election and saw a business opportunity in electronic voting machines.
Despite their lack of experience in the field, Smartmatic and Bizta, another small company in which Mr. Mugica, his father and Mr. Anzola were majority shareholders, were chosen in early 2004 to overhaul the Venezuelan election machinery.
Only weeks before, Bizta had received what company officials said was a government loan of some $150,000, in return for 28 percent of its shares. A Venezuelan official, Omar Montilla Castillo, joined its board as the government’s representative. He has been identified in news reports as an elections-systems adviser to President Chávez.
At the news conference and in an interview yesterday, Mr. Mugica said he had never met Mr. Montilla. When asked about the minutes of a Bizta board meeting from Dec. 15, 2003, which indicate that both men were present, he said he had only “a vague recollection” of the event.
“If I met him it was a kind of ‘hello’ handshake,” Mr. Mugica said. “But I don’t remember it.”
Mr. Mugica and other Smartmatic officials noted that the money was repaid to the Venezuelan government after the financing became public, and that the Venezuelan government had no further involvement with the company except as a client.
Mr. Mugica said that Smartmatic acquired Bizta in 2005, even though he, his father and Mr. Anzola still controlled 60 percent of Bizta stock.
Officials of a major American voting-machine company that has come under federal scrutiny because of its primary owner’s past business ties to the leftist government of Venezuela said yesterday that the company had voluntarily submitted to a federal investigation into its purchase.
The American company, Sequoia Voting Systems, was bought in March 2005 by the Smartmatic Corporation, a Venezuelan-owned software company whose only previous experience in the voting-machine business had been to overhaul Venezuela’s electoral machinery before a referendum that confirmed Hugo Chávez as president in August 2004.
Brookly McLaughlin, a spokeswoman for the national security body conducting the investigation, the Committee on Foreign Investment in the United States, said she could not comment on which side opened the inquiry or when it began.
But another government official, who requested anonymity because the process is secret, said that Sequoia had submitted to the formal inquiry only in recent weeks, nearly three months after it was first contacted and asked for information.
At a news conference in Washington yesterday, officials of Smartmatic and Sequoia said they were eager to prove they had nothing to hide.
“The acquisition does not pose any national-security risk,” a lawyer for the two companies, Jeffrey P. Bialos, said of its purchase for $16 million from a British company, De La Rue.
But by asking that the committee begin a formal inquiry, Smartmatic also appears to have forced the government’s hand. Such inquiries are limited to 30 days, although they can be followed by more rigorous 45-day investigations if questions remain.
The government official who requested anonymity said several federal agencies had begun examining Smartmatic before the company requested the committee’s review.
Foreign investors in areas like military manufacturing usually submit purchases for the committee’s review before transactions are consummated. But after the political furor over a Dubai company’s approved takeover of operations at six American ports, legislators have pushed the Bush administration to strengthen and expand the reviews.
The government’s interest in Smartmatic stems from questions about the relationship between its principal owners and the government of Venezuela.
The company’s founder and principal owner, Antonio Mugica Rivero, said he and an early partner, Alfredo Anzola, were young software engineers living in South Florida during the recount of the 2004 election and saw a business opportunity in electronic voting machines.
Despite their lack of experience in the field, Smartmatic and Bizta, another small company in which Mr. Mugica, his father and Mr. Anzola were majority shareholders, were chosen in early 2004 to overhaul the Venezuelan election machinery.
Only weeks before, Bizta had received what company officials said was a government loan of some $150,000, in return for 28 percent of its shares. A Venezuelan official, Omar Montilla Castillo, joined its board as the government’s representative. He has been identified in news reports as an elections-systems adviser to President Chávez.
At the news conference and in an interview yesterday, Mr. Mugica said he had never met Mr. Montilla. When asked about the minutes of a Bizta board meeting from Dec. 15, 2003, which indicate that both men were present, he said he had only “a vague recollection” of the event.
“If I met him it was a kind of ‘hello’ handshake,” Mr. Mugica said. “But I don’t remember it.”
Mr. Mugica and other Smartmatic officials noted that the money was repaid to the Venezuelan government after the financing became public, and that the Venezuelan government had no further involvement with the company except as a client.
Mr. Mugica said that Smartmatic acquired Bizta in 2005, even though he, his father and Mr. Anzola still controlled 60 percent of Bizta stock.
posted by ConcernedVoter06 at 7:33 AM
<< Home