ConcernedVoter06

FORMER VENEZUELA ELECTION OFFICIAL ALLEGES SMARTMATIC VOTE FRAUD

2007-04-05T06:54:00.000-07:00

http://www.atravesdevenezuela.com/html/modules.php?name=News&file=article&sid=108&mode=thread&order=0&thold=0

Enviado el Lunes, 05 marzo a las 06:44:00 por admin

Ex funcionaria del CNE, ofrece pruebas de fraude electoral.

No se auditaron 6.540 máquinas de votación usadas el 3-D equivalentes a 2 millones de voto
Caracas, marzo 4 (Sabrina Segovia M).- Existen documentos que pueden probar que hubo fraude electoral en el comicio presidencial. Seis mil 540 máquinas automatizadas de votación no fueron auditadas, lo que representaría la manipulación de al menos 2 millones de sufragios. Esta acusación la emitió la ex funcionaria del Consejo Nacional Electoral (CNE) con 25 años de trayectoria dentro de esta institución, Ana Mercedes Díaz Cardozo de Guía, abogada y ex directora de Partidos Políticos durante la administración de Francisco Carrasquero.
En una entrevista exclusiva para Notitarde, la especialista electoral, quien advierte que fue amenazada de muerte por el vicepresidente Jorge Rodríguez, decidió romper el silencio y compartir con Venezuela su investigación sobre las irregularidades cometidas por el arbitro electoral.
Todos los documentos y pruebas que da, señalan que fueron extraídos del propio Consejo y de la empresa Smartmatic.
Díaz contó que en el Boletín de Información Número 2 del CNE, publicado el 16 de octubre de 2006, se precisó la ejecución de una auditoría a los componentes de las máquinas de votación SAES3000 y SAES3300.
Hasta ese momento el Poder Electoral poseía 4 mil 500 SAES3300 y 25 mil SAES3000, para un total de 29 mil 500 máquinas automatizadas de votación, ambos modelos se usarían para la elección presidencial. Dichos equipos fueron auditados.
"El boletín informativo es del CNE, ellos mismos dicen que revisaron junto con la oposición 29 mil 500 máquinas de votación, es una declaratoria del CNE, eso no lo inventó nadie, eso lo dijeron ellos."
Sin embargo, en un boletín de Smartmatic, publicado el 23 de junio de 2005, manifiesta haber vendido al CNE 5 mil 500 SAES3300, por lo que da en total 30 mil 500 máquinas y no 29 mil 500 como pregonaba el árbitro, es decir, "ocultó la existencia de mil máquinas."
Otro dato, en el contrato de CNE- Smartmatic firmado el 15 de marzo de 2004 "prueba indubitable" sólo se especificaba la compra de 20 mil SAES3000 y no de 25 mil equipos, es decir, el órgano electoral adquirió discretamente 5 mil máquinas de ese modelo entre 2004-2006.
Estos detalles son importantes pues en la Infraestructura Electoral utilizada el 03 de diciembre de 2006, (documento extraído del CNE), se puntualiza que en la contienda se utilizarían oficialmente 32 mil 331 máquinas automatizadas y según informaciones emitidas por el propio árbitro se evidenció que no se auditaron 2 mil 831 máquinas de sufragio.
Si en la Infraestructura especifica que se usaron 32 mil 331 máquinas pero nada más auditaron 29 mil 500 máquinas, al restar ambos números da 2 mil 831 equipos a los cuales no se les revisó ni el hardware ni el software.
Como si no fuera suficiente, el 25 de octubre de 2006, el CNE suscribió dos nuevos contratos con Smartmatic para adquirir otras 5 mil 540 máquinas SAES3300, tal información se puede leer en un boletín de Smartmatic, fecha 8 de noviembre de 2006, las que se sumarían a las 30 mil máquinas existentes. La abogada subraya que esta última adquisición sería técnicamente imposible de auditar por razones de tiempo.
30 mil máquinas más 5 mil 540 da en total 36 mil 040 equipos, entonces ¿por qué la Infraestructura Electoral puntualiza que nada más hay 32 mil 331 equipos de votación para usar?
La ex funcionaria se plantea esta duda pues si se resta 36 mil 040 y 32 mil 331 da en total 3 mil 709 máquinas que no fueron sometidas a ningún chequeo más las 2 mil 831 sin auditar reportadas por el CNE, eso suma 6 mil 540 máquinas de votación que no fueron observadas ni verificadas por ningún actor político.
"¿Dónde estaban esas máquinas el 3-D?, pueden decirme a mí que eran de repuesto para cambiarlas en caso de emergencia, perfecto, pero todo el mundo tiene que chequear el software, programa y componentes de cada SAES3000 o SAES3300, todos teníamos que saber el número exacto de máquinas compradas. ¿Donde estaban instaladas esas máquinas? Yo no sé si los equipos estaban en Fuerte Tiuna o en Cuba. Todo eso lo que hace es enrarecer y restar confiabilidad al proceso electoral"
Díaz plantea que si cada equipo tiene capacidad de almacenar entre 370 y 400 votos existe la posibilidad real de manipular 2 millones de sufragios.
"Frente a esta incongruencia producida por el propio órgano electoral, en cuanto al número de máquinas de votación adquiridas, las máquinas auditadas y las máquinas a ser utilizadas, resulta imposible tener confianza y credibilidad en los resultados emitidos por máquinas que no han sido auditadas o, peor aún, que no se sabe donde están instaladas"
Ante estas evidencias, la experta comicial subraya que el proceso electoral del 3-D es inconstitucional pues viola el artículo 293 de la Constitución, que dice "los órganos del Poder Electoral garantizan la igualdad, la confiabilidad, transparencia y eficacia de los procesos electorales"; es ilegal pues violenta las normas de la Ley Orgánica del Poder Electoral, en especial su artículo 4 y es ilegítimo pues el CNE no puede, bajo esas circunstancias, certificar los resultados.
Todas estas denuncias y documentos fueron llevadas por ella y Carlos Guyón, capitán retirado y disidente del 4-F, el mismo 03 de diciembre al CNE. Guyón logró entregar la denuncia, pero a Díaz no le permitieron el acceso al organismo. En ese documento se solicitaba la apertura de todas las mesas y conteo de cada papeleta, pues existían rumores de un posible fraude electrónico.
Hay que recordar que en horas de la tarde existían rumores de que Rosales estaba ganando con un 8% de ventaja. Tal información está basada en un e-mail que escribió uno de los hijos del gobernador del Zulia, Hender Manuel Rosales. Pero luego Chávez empezó a tener ventaja. Díaz se pregunta ¿por qué sucedió eso?
Para asegurar los resultados, la abogada pidió la apertura de todas las mesas de votación y así chequear cada voto físico.
Pero ya los rectores habían preparado una estrategia para combatir el uso del voto físico o papeletas. En la Resolución Número 061011-0873 del Consejo, de fecha 11 de octubre de 2006, contentiva del Instructivo sobre el Procedimiento de Auditoría del Sistema Automatizado de Votación y Escrutinio, expresa textualmente " bajo ningún concepto la auditoría se considerará escrutinio, ni forma parte de ese acto... y su finalidad será efectuar un análisis estadístico en el cual se determine si lo hubiere, cualquier patrón irregular o sesgos en el sistema automatizado"
Díaz sostiene que este elemento es un exabrupto electoral pues cada voto físico es en sí una auditoría y "es nada más y nada menos que la verdadera voluntad del elector y no sólo un simple comprobante. Cuando tú abres una máquina en el día de la elección y hay una incongruencia entre lo que dice la máquina y las papeletas, según la resolución eso no significa absolutamente nada, cuando en realidad es precisamente lo más importante. El voto físico es la expresión de la voluntad popular".
En un principio, el proyecto era presentar las denuncias el mismo 3-D. El candidato Rosales diría que en virtud de la no auditabilidad de 6 mil 540 máquinas de votación, él solicitaría la apertura de todas las cajas con los comprobantes.
"No tenía que haber muertos en ese momento. El CNE se iba a negar a abrir la cajas, porque representaba un problema y lo pondríamos contra la espada y la pared. Le habíamos descubierto sus triquiñuelas con las máquinas. Pero nada de eso sucedió, no tuve acceso al Consejo, me trasladé al Comando de Rosales, hubo una reunión con diversos observadores internacionales, pero me sacaron del sitio".
Comenta que en el momento en que un grupo de ciudadanos llamó a Rosales traidor, era porque Ana Díaz y su equipo repartieron copias de los documentos antes mencionados.
Sostiene que cada documento se recogió antes de la elección pero no lo hizo público hasta tanto no se realizara el comicio. "Yo te puedo garantizar que Omar Barboza (coordinador nacional en la campaña de Rosales) lo sabía, pues él estaba en una reunión con Jesús Urdaneta, Carlos Guyón y yo. Le explicamos cada elemento de la situación y le mostramos los documentos."
CACERIA DE BRUJAS
Ana Díaz de Guía sostiene que la situación interna del CNE es muy difícil pues ya han sustituido a muchas personas profesionales y teme por aquellos funcionarios que le dieron documentos en el pasado, pues van a ser presionados.
"Yo tenía 25 años en el CNE. Evidentemente ahora va a comenzar una cacería de brujas para todas aquellas personas que hayan tenido contactos conmigo para, de alguna manera, destituirlos. Eso me preocupa enormemente, pues las personas no tienen la culpa, pero eso es lo que va a pasar. La infraestructura que yo tengo, el CD que yo tengo me lo dio la gente dentro del Consejo."
Señala que el proceso electoral de 2006 estaba pendiente de cada una de las etapas del comicio y como una hormiguita se dedicó a recolectar cada dato sobre esta contienda. Visitaba el Consejo, se reunía con personas, viajaba al exterior, todo el tiempo de bajo perfil.
INFORMES UNIVERSITARIOS COMPLICADOS
Su estudio se diferencia de otros por el acceso a las fuentes, la comprensión de las pruebas y la veracidad de los documentos.
"He tenido acceso a informes de universitarios, me parecen extraordinarios, muy buenos, pero la diferencia entre sus estudios y mi investigación es el tipo de pruebas. Estas emanan del CNE, no pueden ser desvirtuados por ellos, son accesibles para todo el mundo. Escribí un libro sobre estas pruebas que se llama Debemos Cobrar, que se bautizó en Florida hace dos semanas"
Como especialista electoral con 25 años de experiencia, comenta que está acostumbrada a leer estudios complicados, en los que hay proyecciones estadísticas y análisis de números.
"Hay que tener unos grados más de preparación para entrarle al tema. Mi estudio es muy sencillo, es como la piedra que destruyó a Goliat. No nos compliquemos la vida, la gente quiere darle una apariencia de dificultad a algo que no lo tiene."
LUCENA TIENE UN COMPROMISO GRANDE
Ana Díaz precisa que la actual presidenta del Poder Electoral tiene un compromiso muy grande con este gobierno.
"Ella entró en el 97 o 98, cuando comenzó la oleada de chavistas y tomaron la mitad del CNE. Tal toma fue una exigencia de Chávez para que cuidaran el proceso del 98."
La funcionaria afirma que Lucena es una buena persona, pero " tiene un compromiso ideológico muy grande que va más allá de sus deberes como funcionario electoral, eso es lo grave en ella. Cuando una persona es funcionario electoral, tienen su corazoncito, pero uno trabaja para cuidar el proceso de todo el mundo y no para un sector."
Recalca que Tibisay Lucena "desafortunadamente" está comprometida con el proyecto de Chávez y no es totalmente imparcial.
La especialista electoral cree que esta profesional culminará su carrera en una embajada. "Depende como se mueva esta matriz de opinión con relación a las pruebas, irá a una embajada, pues el gobierno no puede dejarla afuera, no pueden correr el riesgo de que diga o suelte alguna cosa que al gobierno no le conviene. Te quito tu puesto, pero te doy un trabajo bueno para que no me ataques."
LA DESIGNACION INMORAL DE UN VICEPRESIDENTE
Díaz explicó que la designación de Jorge Rodríguez como Vicepresidente y de Francisco Carrasquero como magistrado del Tribunal Supremo de Justicia es inmoral.
"Es una cosa tan grosera, tan inmoral. En toda la historia del CNE nadie que fue presidente del Consejo había formado parte del gobierno. Es una cuestión de ética y principios, por lo que la legalidad y la legitimidad de todas las actuaciones de estas administraciones quedaron bajo dudas razonables."
UNA OPOSICION INGENUA
Díaz se pregunta que si existieron tantos partidos políticos de oposición, los cuales tenían acceso a todas las áreas del CNE ¿por qué no recolectaron estas pruebas?
"En Venezuela desafortunadamente, no nos ubicamos, la pelea es contra Hugo Chávez y no importa quien ayude, lo importante es que nos ayudemos. Las pruebas que recolecté las puede conseguir cualquier técnico. Mucha gente dentro de la oposición decía: " si yo no tengo las pruebas no digo nada". Hubo gente que conoció esta documentación, como la Iglesia Católica, partidos y Súmate."
En el pasado 2 de diciembre tenía que sostener una reunión en el Comando de Rosales para explicar el problema de las máquinas " pero nunca me llamaron. Si hay fraude, lo vamos a decir, me dijeron; ellos pensaron que no había fraude estúpidamente, la oposición actuó ingenuamente, o no sé que sucedió".
CONSPIRACION IMPERIALISTA, OTRA EXCUSA
Al difundirse estas informaciones, algunos señalan que el resultado será acusar a la abogada de mentirosa , intentando desprestigiarla, pero ella manifiesta que no le importa la opinión de la administración actual.
"Me imagino que el gobierno empezará a hablar de una conspiración imperialista y toda esa cantidad de estupideces que vive diciendo, nadie se las cree. Recolecté datos, fui a reuniones en Venezuela, no hubo nada irregular, tengo mi pasaporte de que entré y salí del país en diferentes momentos. Aquí hay es un estudio profesional, técnico sobre la presidencial".
Recalca que toda la investigación está protegida y cualquiera puede verificarlo en Internet.
"El problema que tiene el gobierno de Chávez es que no tiene como desmentir las pruebas, fíjate. Ellos pueden decir que no usaron las máquinas, no importa, aunque sí utilizaron unas máquinas. El problema es que te lo callaste. El problema es que no las auditaste, el problema es que eso viola normas constitucionales, legales y principios electorales. Ese es el punto."
Manifiesta que no son las pruebas de Ana Mercedes Díaz Cardozo de Guía " sino que son las pruebas de Venezuela. Todo aquel que quiera hacer uso de ellas, lo puede hacer."
¿DE DONDE SALIO ANA?
Esta abogada con 25 años de experiencia en el mundo electoral es muy conocida dentro del extinto Consejo Supremo Electoral y en el actual Consejo Nacional Electoral
Tiene un postgrado en Derecho Administrativo. Comenzó a trabajar en el CNE el 01 de julio de 1979, trabajó en el área de Registro, delegación de Distrito Federal.
Cuando se graduó de abogado se fue a la Consultoría Jurídica del organismo, representó al CSE como abogado en la Corte Primera y en el Tribunal Supremo de Justicia.
Posteriormente en 1991 la nombraron Sub- directora general de Partidos Políticos. Enfrentó la crisis del 98 e ideó la primera elección indígena que hubo en Venezuela.
Estuvo de permiso no remunerado entre 2002 y 2003. Entró en la administración de Chávez en agosto de 2003 y se incorporó como Director General de Partidos Políticos.
"Entre los meses noviembre y diciembre yo no tenía nada que ver con el Referendo y me dedicaba a la preparación de las elecciones de agosto. En enero de 2004 un funcionario del Consejo me invitó a formar parte en el Comité Técnico Superior (CTS), encargado de validar o no las firmas para el Referendo."
Hay que recordar que había 5 equipos de los cuales 3 eran del gobierno y 2 de la oposición y las decisiones se tomaban por mayoría simple.
"En ese momento me preguntaba que si no estaba de acuerdo con las decisiones de la mayoría podría escribir mis planteamientos en la planilla. Eso provocó una discusión de tal magnitud, que ahí empezó Cristo a padecer."
Recuerda que una de las irregularidades observadas por ella era que las planillas donde se plasmaban las firmas tenían unos seriales que nada más conocían ciertos funcionarios.
"Si se recogían firmas en una planilla de diputados y eran rúbricas para solicitar la revocatoria al Presidente, eso te anulaba las rúbricas, si me das un puñado de planillas y yo no sé cual es su función, las relleno pues todas en apariencia son iguales, esa irregularidad podría anular 300 mil firmas, yo me opuse".
Mientas las discusiones dentro del Comité continuaban se acercaba la jubilación de Ana Díaz. " El 01 de julio de 2004 cumplí 25 años de servicio; los directores y rectores no entendían por que alguien de estar tan cerca de la jubilación vivía protestando, chavistas amigos míos me decían "quédate callada". Y no lo hice"
Recordó que las firmas planas eran una invención del CNE y el CTS, se rehusó a anular las firmas "la orden de Chávez era que no había referendo. Lo que trataban Carrasquero, Rodríguez y Battaglini era evitar el referendo, pero se les cayó. Ellos son vulnerables, ellos pierden, ellos no son infalibles, la trampa sale. Hubo tanto alboroto por la tensión de las firmas, que decidieron llevar las firmas a reparo"
Ante su actitud guerrera en ese Comité, Francisco Carrasquero la sustituye, pierde su jubilación y Jorge Rodríguez la amenaza de muerte.
"Cuando Carrasquero dijo que habían 800 mil firmas para reparo en lugar de anularlas, para mí, era un triunfo y así fuimos a referendo".
MIEDO Y DINERO
En este momento lo que sobra es dinero y miedo, sentencia la autora del libro Debemos Cobrar. Reitera que decidió difundir estas pruebas con la carga que conlleva. Ella no necesita asilarse pues es residente permanente de Estados Unidos
"Hago esta labor porque me salió el palito más corto, el trabajo más duro, desgraciadamente soy funcionaria electoral, lo llevo en la sangre, es mi vida. El temor le ganó a Rosales. Tenemos que quitarnos la camisa de fuerza, si la gente se hace la sorda y ciega le está haciendo el juego a Chávez. El proceso electoral está viciado. Chávez no ganó, es un usurpador, no podemos callarnos"
Finalmente la abogado asegura "Cuando alguien quiere algo, encuentra el camino y cuando no quiere, encuentra la excusa, tenemos que despertar y salir de la pesadilla"

QUESTIONABLE MACHINES

2007-04-04T12:01:00.000-07:00

Peer-Reviewed Statistical Report Says 2004 Smartmatic Vote in Venezuela Was Fraud

El Universal

Caracas, viernes 23 de marzo, 2007

http://english.eluniversal.com/2007/03/23/en_ing_art_questionable-machine_23A848009.shtml

25% statistically proven irregularities during the Recall Referendum show that electronic elections have flaws. The opposition and observers better get up to speed regarding the new technology.
ISABEL GARCIA NEVETTEL UNIVERSAL
Three years after the fact, the recall referendum is news again thanks to an article written by the International Statistical Review (ISR) based on a research study titled, "A statistical focus for evaluating referendum process results: the 2004 Venezuelan Recall Referendum" ("Un enfoque estadístico para evaluar resultados de procesos referendarios: el referendo revocatorio venezolano de 2004,") which statistically analyses referendum results and uses Venezuela as its reference. The authors, more than wishing to claim fraud, though they assure that there were significant irregularities with the official results, want to call attention to the importance of being up to date with the technological aspects of the electronic electoral process.
The Venezuelan opposition as well as the international observers have made a monumental error up to now which is being technologically unprepared for the changes related to an electronic election, says María Mercedes Febres Cordero, a specialist in mathematics and co-author of the study. "Traditional observers by themselves are no longer good enough. They only evaluate if there is freedom of the press, if the voting centers are operational, among other things which are important too, but they do not have the expertise to do the type of auditing that is required now-a-days," insists Febres Cordero.
Elections of the future, todayElectronic elections are a relatively new phenomenon on the global scene. According to Febres Cordero, only a dozen countries hold electronic elections, which leaves a lot to be learned to guarantee a clean and just process.
"Now-a-days, the democratic process is legitimized by info-elections or electoral process associated with information technology which can be very vulnerable. The problem is that there are not any citizens, inside as well as outside the country, that will truly assume the responsibility, and though political watchdogs have tried to have elections monitored, it is impossible to have clean elections based on an electronic process without any controls."
Febres Cordero insists that the electoral observation process needs to be updated, and a technical component must be added to its monitoring scope.
While political observers contribute to promote democratic and transparent election processes, try to help solve conflicts between the political parties involved, and defend free speech and human rights, the technical component of the group would be in charge of ensuring the transparency of the electronic electoral process, participate in technical auditing process according to their specialty, strengthen security mechanisms for the processed information, and audit the results with statistical confidence. This technical component would have to be made-up of specialists, personnel specifically trained in this area.
According to Febres Cordero's vision, by introducing the technical component into the electoral observation team, a number of problems would be avoided, including manipulating votes by wire or wireless means, introducing virtual votes, and the inference of intermediate agents in the voting centers and counting rooms. "I am not trying to say that it was even the Government that manipulated the results, that is not important, but that the system is highly vulnerable. The system can be manipulated by intermediate people. They do not even have to be in Venezuela, they only need to have access to the communication passwords. This is something that can happen in Venezuela, and in any country that holds electronic elections."
The disadvantage of this type of elections is that they imply an enormous risk, explains Febres Cordero. To use an electronic platform you need to have "passwords" so that you can communicate between the electoral machines and the counting center. These can be infiltrated in order to introduce any kind of interference or manipulation of the results by third parties. In the blink of an eye the system can be tampered with and millions of votes introduced that can make the auditing process a real nightmare. In an electronic electoral process, the citizen's role of the electoral witness has been eliminated.
Despite the disadvantages, Febres Cordero assures that this type of system has its advantages too: the process is simple, fast when it comes to announcing results, and there is less possibility of error in totaling up the votes.
Proven flawAccording to Febres Cordero, the electronic electoral system flaws are more than just simple speculation. In the study she did along with Bernardo Márquez, Febres Cordero clearly identifies the irregularities which occurred during the presidential recall referendum. "What we did was to analyze the whole country, all the parishes, all the electoral centers, and all the completed ballot records, the almost ten million votes. Then we divided the electoral centers into three groups: coherent, intermediate coherency, and not coherent."
The centers classified as coherent were those where the ballots reflected the general voting tendency of the center. "In a center that has three voting machines, for example, one of the candidates registers 56% of the vote; you would expect that each one of the machines in this center would register results similar to the percentage result of the center, which is to say, 57%, 56%, 55%, explains Febres Cordero. In a center classified intermediate coherency, the percentages registered by the machines vary a bit more from the percentages registered by the center. And in not coherent centers, the machine percentages significantly differ from the percentages the center registered; which is to say that if one of the candidates registered an average of 33% of the vote, the percentage of the ballots registered between machines could go from 70% to 15% between machines with regard to the 33% percentage votes obtained by one candidate in a particular center.
These variations reflected by the different electoral centers are quite illuminating because the machines were assigned randomly, by using the person's identity number, and not according to political affiliation, therefore it is statistically improbably that the percentage of ballots registered by a voting machine vary much from the general average of the center.
According to the study done by Febres Cordero and Márquez, the percentage of coherent centers was 20%, while the non coherent centers made up 25% of the total. The rest of the centers showed an intermediate coherency tendency. Based on these results, both researches drew the final conclusion: "the irregularities observed were consistently detected in numerous voting centers, and the magnitude of the irregularities implies that the official results do not reflect the voters' intentions with statistical certainty." In other words, the official results from the recall referendum are not to be trusted.
Febres Cordero and Márquez then took the percentage of regular votes and made a different calculation. According to their calculations, the "yes" vote was getting between 52% and 56% of the votes. "No marketing study uses 20% of the population, nor do surveys. They only use 2% or 3% of the population. In other words, this is a completely significant group of coherent votes, and out of these votes you do get that the "yes" vote was winning by 56%," assures Febres Cordero.
However, irregularities allowed for a different result to be totaled, says Febres Cordero: "When you work up the graph concerning how the coherency levels are related using the study we are proposing, you see that as the incoherency level increases, the "yes" vote drops, and that cannot be random."
A serious studyFebres Cordero and Márquez's study was published in the ISR magazine, an informative publication issued by the very recognized International Statistical Institute, established in 1885, headquartered in Holland. This institute serves as a consultant to the UN Economic and Social Council (Ecosoc) as well as to the Unesco. In order to publish an article in this review, the authors have to present a statistical analysis which is then analyzed by at least four of the institute's specialists. The authors do not know who it is in charge of reviewing their work. After having checked the statistical analysis, which can take up to a year, the article is then published in the review. In Febres Cordero and Márquez' case, the reviewing process took a little more than six months to complete.
igarcia@eluniversal.com

EL NUEVO: Bajo lupa federal firma que facilita máquinas de votar a Venezuela

2007-03-04T21:44:00.000-08:00

Posted on Thu, Nov. 30, 2006

CASTO OCANDO
El Nuevo Herald
La firma de máquinas de votación Smartmatic, con una sede corporativa en Boca Ratón, está en el ojo de dos investigaciones federales desconocidas hasta ahora y centradas en temas que abarcan desde supuesta evasión fiscal en los Estados Unidos hasta presuntos pagos en Venezuela de comisiones millonarias no declaradas, indicaron documentos y testimonios.
Las pesquisas se añaden a otra que el Departamento del Tesoro abrió a la firma a mediados de este año.
Dos fuentes familiarizadas con las operaciones de la empresa confirmaron a El Nuevo Herald que agentes del Departamento de Rentas Internas (IRS) y la Oficina Federal de Investigaciones (FBI) las interrogaron extensamente sobre las supuestas irregularidades.
Aparentemente las investigaciones, iniciadas en el 2005, comenzaron luego que documentos que mostraban presuntas actividades financieras ilegales de la empresa se filtraron a las agencias federales mencionadas.
Smartmatic es una firma cuyos dueños son ciudadanos venezolanos, y que el año pasado adquirió Sequoia Voting Systems, de California, a través de la cual amplió su penetración en el mercado electoral de Estados Unidos. Sequoia, que no es objeto de investigación federal, provee máquinas electrónicas de votación en el Distrito de Columbia y 16 estados, incluyendo el condado Palm Beach, en Florida. Por otra parte, Smartmatic se ha convertido en el principal abastecedor de tecnología electoral del Consejo Nacional Electoral (CNE) de Venezuela, y tendrá a su cargo las elecciones presidenciales del próximo domingo 3 de diciembre.
Según un dossier de los papeles relacionados con la indagatoria federal, a los que tuvo acceso El Nuevo Herald, la firma presuntemente pagó una multimillonaria comisión a un conocido ex militar venezolano para obtener un contrato de $90 millones con el CNE para automatizar la votación para el Referéndum Revocatorio de agosto del 2004.
Las pesquisas federales también tienen como objetivo determinar si la firma dejó de pagar o no al fisco estadounidense más de $12 millones en impuestos en los últimos dos años, incluyendo unos $4 millones que supuestamente transfirió a la casa matriz del holding en Barbados, de los fondos obtenidos por el segundo contrato que obtuvo con el CNE para las elecciones regionales del 2004 en Venezuela.
En una declaración, Smartmatic afirmó que los señalamientos de presuntas irregularidades son ''alegaciones sin fundamento'' de ex empleados despedidos por la firma, y negó cualquier ilegalidad en sus operaciones corporativas.
''Recientemente hemos llegado a creer que dos ex empleados de Smartmatic están haciendo alegaciones sin fundamento sobre la compañía y parecen estar actuando de forma inconsistente con acuerdos de separación y confidencialidad con la compañía'', expresó la declaración.
Las dos indagaciones federales, iniciadas en Washington, el sur de la Florida y Caracas, tratan de ver si el complejo esquema de compañías creadas por Smartmatic en Curazao, Holanda, Barbados y en el estado de Delaware, supuestamente contribuyó a que la firma evadiera impuestos o si, por el contrario, las operaciones financieras fueron transparentes y legales.
Según los documentos, Smartmatic realizó siete pagos a Morris Loyo, un capitán retirado de la Fuerza Aérea Venezolana con amplias conexiones en el gobierno chavista antes de realizarse el referéndum revocatorio, los cuales aparentemente no fueron reportados al IRS.
Luego supuestamente hubo otros dos pagos a Loyo posteriores al evento electoral que sí fueron declarados, y que formaban parte de un contrato entre Smartmatic y el ex militar. En el trato se estipulaba una comisión de ventas de $1.5 millones por haber ayudado a obtener el contrato de poco más de $90 millones para el referéndum.
En total, la firma de Boca Ratón pagó a Loyo $4,128,850 a través de nueve transferencias a una cuenta del ex militar en el Banco Hapoalim B. M. en Nueva York, indican los papeles.
''En la declaración de impuestos de Smartmatic correspondientes al 2004, sólo aparece declarado como comisiones de venta un total de $1.5 millones al señor Loyo, cuando en realidad [éste] recibió por lo menos $2.6 millones adicionales en pagos no declarados al IRS'', dijo una fuente familiarizada con esta indagación.
A esto, Smartmatic respondió que Loyo trabajó para la firma como ``lobista/vendedor y contratista independiente para ayudar a asegurar contratos electorales en Venezuela, de la misma forma que muchos vendedores norteamericanos emplean a cabilderos estatales y vendedores para que ayuden a conseguir contratos''.
El FBI investiga, además, si la empresa revisó a fondo el pasado y las vinculaciones políticas del ex militar, así como su presunta cercanía a personeros del gobierno chavista, como exige la Ley de Prácticas Corruptas en el Extranjero (FCPA).
En cuanto a este tema, la firma afirmó que aplica una ''robusta política'' para combatir la corrupción en sus actividades en el extranjero, como lo establece la FCPA.
El Nuevo Herald trató de obtener un comentario de Loyo sobre estos pagos, pero no recibió respuesta a un mensaje dejado en su correo de voz en las Residencias Caracas Palace, el lugar donde vive el ex militar según constató la administración del complejo residencial. El ex capitán tampoco contestó llamadas que El Nuevo Herald hizo a su celular.
Por otra parte, el FBI procesa denuncias de amenazas de muerte presuntamente proferidas por el presidente de Smartmatic, Antonio Mugica, a empleados y ex empleados de la empresa que cuestionaron prácticas administrativas que ellos consideraron irregulares, conoció El Nuevo Herald.
Pero Mugica negó categóricamente, en una conferencia telefónica con El Nuevo Herald, haber amenazado de muerte a ''algún empleado'' de la firma de elecciones.
Las denuncias alegan que el presidente de Smartmatic habría advertido a por lo menos un ex empleado sobre el ''peligro'' de que se filtrasen documentos internos, así como de sus supuestas influencias en la Disip, la policía política del gobierno chavista.
Leonardo Riera, un empleado administrativo de Smartmatic hasta poco después del referéndum, confirmó en una entrevista con El Nuevo Herald que había recibido amenazas de Mugica y que presentó su denuncia ante el FBI a mediados del año pasado porque temía represalias.
''Sí, he sido amenazado de muerte, y lo he denunciado ante las autoridades federales, con las cuales he colaborado activamente en las investigaciones'', aseveró Riera.
Otra persona, la cual pidió el anonimato por temor a represalias, manifestó que Mugica lo había amenazado en la oficina de Smartmatic en Boca Ratón a principios del 2005. La fuente confió a El Nuevo Herald que el presidente de la firma también le hizo una advertencia sobre su aparente influencia en la Disip. Esta persona dijo que poco después denunció al presunto hecho ante el FBI.
Como es usual en estos casos, el FBI y el Departamento de Justicia declinaron hacer comentarios sobre las investigaciones.
''No he hecho amenazas [de muerte] ni ahora ni nunca a ninguno de mis empleados. Todos los que me conocen, la mayoría de los empleados que me conocen, saben que esto no está absolutamente en mi naturaleza'', aseguró Mugica.
''No sé si esto es relevante o no, pero lo uso como un ejemplo: puedo decirle que soy vegetariano, y una de las principales razones por las cuales ni siquiera como pescado es porque no creo que siquiera está justificado matar a un pez para [usarlo como] alimento. Ir en contra de una persona es algo impensable [para mí]'', acotó Mugica.
El IRS indaga también si se produjo un supuesto fraude fiscal en dos auditorías de la corporación realizadas en el 2004 por una firma de contabilidad de Miami.
Documentos de agencias federales a los que tuvo acceso El Nuevo Herald indican que la firma Morrison, Brown, Argiz & Farra, LLP, certificó dos auditorías aparentemente contradictorias de las finanzas de Smartmatic durante 2004.
Según la primera auditoría, titulada ''Smartmatic LLC (A Wholly-Owned Subsidiary of Smartmatic International Corp.) Financial Statements'', del 31 de diciembre del 2004, la firma debía pagar un total de $4,073,809 en impuestos al IRS sobre los ingresos obtenidos de un segundo contrato de $26 millones con el CNE de Venezuela. Este informe fue enviado a los departamentos electorales de la Ciudad de Chicago y el Condado Cook, en Illinois, y al del estado de Michigan, entre otros.
No obstante, en una segunda auditoría, titulada ''Smartmatic International Corporation and Subsidiary (A Wholly-Owned Subsidiary of Smartmatic International Holdings, B.V.), Consolidated Financial Statements'', con la misma fecha que la del párrafo anterior, la cifra a pagar en impuestos aparece como $479,653. Igualmente, este informe fue distribuido a los departamentos de elecciones antes mencionados.
Entonces, entre las dos auditorías hay una diferencia de $3.6 millones. De acuerdo con la indagación federal, el cambio de los montos a pagar en impuestos se produjo luego de que se firmara un Acuerdo de Servicio entre Smartmatic International Corporation, registrada en Barbados como la Casa Matriz, y Smartmatic LLC, registrada en el estado de Delaware. El Acuerdo se firmó el 25 de marzo de 2005, después que tuvieron lugar las operaciones por las cuales se estaba pagando impuestos.
La respuesta de la firma sobre el tema fue directa: ''Ya sea en el 2004 o en cualquier otro año, Smartmatic siempre ha pagado todos sus impuestos debidos y adeudados en las jurisdicciones donde opera. Al presentar declaraciones de impuestos del 2004 y de otros años, Smartmatic siempre ha recibido el consejo de los mejores profesionales, incluyendo firmas legales y de contabilidad'', precisó la declaración.
''Hemos provisto y revelado absolutamente todas nuestras transacciones'', agregó Mugica.
Smartmatic ha declarado al IRS un total cercano a los $97 millones en contratos recibidos en el 2004 ''por trabajo electoral realizado fuera de los Estados Unidos, y por entidades no estadounidenses de Smartmatic'', indicó la declaración.
Un cuestionario enviado por El Nuevo Herald a Morrison, Brown, Argiz & Farra no fue respondido. Varias llamadas realizadas a las oficinas de la firma en la avenida Brickell tampoco fueron devueltas.
Ellie Michaud, una vocera del departamento de investigaciones criminales del IRS para el sur de la Florida, declinó hacer comentarios sobre el caso.
ocasto@herald.com

Ignoring Chavez's Plan

2007-02-20T06:23:00.000-08:00

February 20, 2007 Edition > Section: Opinion > Printer-Friendly Version

BY MICHAEL ROWAN AND DOUG SCHOENFebruary 20, 2007URL: http://www.nysun.com/article/48925

Hugo Chavez may have lost both the recall referendum in 2004 and the December 2006 presidential election, according to studies conducted by a distinguished multidisciplinary team in Caracas, Venezuela. The team includes the rector of Universidad Simon Bolivar, Frederick Malpica, and a former rector of the National Electoral Council, Alfredo Weil.
Astonishing as it may seem to Americans who believe the contention by Mr. Chavez that he won both elections by a landslide — 58% to 42% in the recall and 61% to 39% in the presidential election — the studies show that since 2003, Mr. Chavez has added 4.4 million favorable names to the voter list and "migrated" 2.6 million unfavorable voters to places where it was difficult or impossible for them to vote.
None of these additions or migrations to the voter-register has been independently audited in Venezuela. Instead, the votes have been electronically counted by Chavez cronies. So when Mr. Chavez announces a landslide, there has been no way to prove otherwise, even though exit polls and other data have consistently shown that half the voters of Venezuela or more oppose Mr. Chavez.
On the basis of this fraudulent manipulation, Mr. Chavez has claimed a national mandate for all of the following, which we clarify for Americans as if President Bush had done so in America. He:
• won all 435 seats in the House and all 100 in the Senate, and packed the Supreme Court with nine sycophants that never ruled against him;
• asked his rubber-stamp Congress to let him legislate unilaterally including amending the Constitution, and 100% of the members of Congress voted for that;
• decreed under these powers that he can run for re-election to the presidency for life;
• plans to decree that cities and states will no longer be governed by elected mayors and governors, but by people's committees named by him;
• owned or controlled all but a few TV and radio stations that either cover his endless speeches averaging 40 hours a week or risk losing their broadcast licenses;
• created one political party and denied the rights of citizenship to recalcitrant members of opposition parties;
• took over the Federal Reserve and spent the national Treasury as if it were a personal checking account;
• funded his campaign with government money and publicly and repeatedly threatened government workers to vote for him or be fired;
• dictated wages, prices, interest rates, profits, and currency exchange rates under the economic theory that he knows best;
• created an army reserve commanded personally by him that was 10 times the size of the existing military;
• nationalized the telephone and electric utilities along with thousands of private enterprises on the theory that collectives are better than private enterprises;
• put military henchmen loyal only to him in charge of government and civil institutions that they have no qualifications to run;
• declared that schools would submit to a curriculum that rewrites national history as he sees it, and mandated military indoctrination for all children;
• dictated the purpose and occupancy for private homes, apartment houses, and properties under the threat of confiscation if owners did not comply;
• prosecuted human rights and voter-rights leaders for treason, which is punishable by 16 years in prison;
• jailed individuals for five years who voiced opinions on TV he disagreed with;
• looked the other way as thousands of his police and military worked the murder, kidnapping, theft, drug, and money-laundering trades with impunity;
• began considering declaring a national religion with him as its spiritual leader;
• changed the way unemployment and poverty are calculated when the international standards of measurement proved embarrassing to his false claims of having solved those problems;
• ran an off-budget slush fund that rivals the size of the official government budget;
• increased the size of a corrupt and inefficient bureaucracy so grandly that he now has at least one employee in half the families of the country;
• traveled the world lavishly preaching about ending poverty, welfare, and theft — the three main characteristics of his government;
• advertised his model of government — with the highest inflation rate and highest murder rate in Latin America, and one of the worst human rights records — as the hope of the world.
We are not making this up. Mr. Chavez did — or is doing — all of that and more. But some have said that he is really a good guy who has been slandered and misunderstood. We need more dialogue with him, they say. He's an elected president of a sovereign nation and we should respect that, they also say.
What is it about Mr. Chavez that they don't get? What does Mr. Chavez have to do to make them see him as he really is? If calling Mr. Bush "the Devil" and America "the Evil Empire" is all someone has to do to gain acceptance from those who oppose American policy, why didn't Pol Pot, Muammar Gadhafi, and Robert Mugabe qualify?
President Carter endorsed the Chavez counts without any verifiable paper ballot count or audit. Why? And why does he continue to support Mr. Chavez? Why do members of Congress from 17 states look the other way as Mr. Chavez delivers subsidized oil to households in their districts?
We believe Mr. Chavez is given a wide berth everywhere because he's got an oil supply second only to Saudi Arabia. He is using America's oil market — or lack of oil production — to get Americans to ignore what he's up to.
Mr. Schoen is a former principal in Penn Schoen & Berland, which conducted exit polls in the 2004 recall referendum and in the 2006 presidential election. Mr. Rowan is a free-lance columnist and the author of "Getting Over Chavez and Poverty."
February 20, 2007 Edition > Section: Opinion > Printer-Friendly Version

SMARTMATIC RESPONDS TO HERALD

2007-01-20T09:43:00.000-08:00

Foreign governments not involved in U.S. voting

Re the Jan. 8 editorial Sale could ease doubt about elections: A Miami Herald story in October reported that Smartmatic Corp. voluntarily submitted information to the U.S. Committee on Foreign Investment in the United States. The editorial uses the word ``resisted.''
Smartmatic has provided the media documents detailing the company's ownership structure -- 97 percent of Smartmatic is owned by its four founders -- Antonio Mugica Rivero, a citizen of Spain and Venezuela, Roger Pinate and Alfredo Anzola, both Venezuelan citizens, and Jorge Massa, a citizen of France and Venezuela. The remaining stock is held by Smartmatic's senior executives and the founders' family members.
The Oct. 28 story U.S. digs for vote-machine links to Hugo Chávez says that business records obtained by The Miami Herald in Willemstad's commercial registry provide no evidence of any Venezuelan government official or agency as director, associate, employee or proxy in Smartmatic.
Most important, the idea that foreigners could somehow influence the U.S. voting process is untrue and ignores the numerous safeguards and stringent regulations in place to ensure fair and accurate elections. Sequoia Voting Systems' election equipment and software have been tested and qualified by federal Independent Testing Authorities and certified by individual states.
ANTONIO MUGICA, CEO and president, Smartmatic Corp., Boca Raton
JACK A. BLAINE, president, Sequoia Voting Systems, Boca Raton

Herald Editors: PROBE OF VOTE-EQUIPMENT COMPANY IN NATIONAL INTEREST

2007-01-19T12:19:00.000-08:00

Posted on Mon, Jan. 08, 2007
Sale could ease doubt about elections
OUR OPINION: PROBE OF VOTE-EQUIPMENT COMPANY IN NATIONAL INTEREST
The pending sale of Smartmatic Corp.'s subsidiary, Sequoia Voting Systems Co., should ease doubts voters may have about possible foreign influence in U.S. elections. A U.S. Treasury panel that was investigating Smartmatic regarding national-security concerns said that it will ''closely monitor'' the sale of Sequoia. This should help assure Americans that no hostile government can meddle in U.S Elections.
Smartmatic purchased Sequoia, a leading voting-equipment vendor, in 2005. The company has been under a cloud since the Committee on Foreign Investment in the United States, or CFIUS, began a national-security investigation last fall. The concern was that the Venezuela, headed by President Hugo Chávez, who is known for anti-U.S. antics, might have undue influence in Smartmatic. Given the growing distrust of electronic-voting systems and the fear of vote manipulation, careful review of Smartmatic was justified.
Bribery probe
Smartmatic initially resisted the CFIUS investigation. Later, The Wall Street Journal reported that the Justice Department had undertaken a different investigation of Smartmatic. This investigation was related to possible bribes and tax evasion in Smartmatic's sale of voting equipment to Venezuela's government for use in its 2004 presidential recall election.
Antonio Mujica, Smartmatic's CEO and founder, is a Spanish-Venezuelan dual citizen. He and other company officials repeatedly have denied any connection to the Venezuelan government and all allegations of bribery or tax evasion.
Unnamed investors
Smartmatic's ownership structure is so convoluted that it is virtually impossible to verify all its owners. Parent company Smartmatic International is owned by a Netherlands company, which is owned by Curacao trusts, which in turn, are controlled by unnamed investors.
The Venezuelan government once had a stake in a company closely linked to Smartmatic. Venezuela invested in Bizta, which is owned by two of Smartmatic's main owners, including Mr. Mujica. Bizta provides software for Smartmatic's voting system and joined Smartmatic in selling that system to the Chávez government for the 2004 recall election. Venezuela sold its stake in Bizta after The Miami Herald reported on the investment, which prompted complaints that the Chávez government shouldn't have any interest in machines that would determine his stay in office.
U.S. Rep Carolyn Maloney, D-N.Y., who initiated the CFIUS probe, says that Smartmatic ''could not overcome the cloud of doubt'' about its ownership of Sequoia. CFIUS was right to take decisive action to protect national security and the integrity of U.S. elections.

Herald: Sale ends machine flap

2007-01-19T12:18:00.000-08:00

Posted on Fri, Dec. 22, 2006
VOTING MACHINES

Sale ends machine flap
Smartmatic -- the South Florida-based voting-machine company that was under investigation for possible links to the Venezuelan government -- will sell the U.S. subsidiary that provides electronic machines in Florida and other states.
By CASEY WOODS
cwoods@MiamiHerald.com
A federal investigation into possible secret Venezuelan government involvement in a South Florida-based electronic voting machine company has been closed after Smartmatic announced on Thursday that it will sell the subsidiary that sparked the probe.
A Treasury-led panel began the inquiry earlier this year because of concerns that Smartmatic, which owns Sequoia Voting Systems Co., could pose a threat to U.S. national security by giving the left-wing government of Venezuelan President Hugo Chávez a way to influence elections.
Sequoia, one of the nation's leading suppliers of touch-screen voting machines, provides machines to the nation's capital and dozens of counties in 16 states, including Florida counties such as Hillsborough, Palm Beach, Indian River, and Pinellas.
Smartmatic representatives, who say the company voluntarily submitted to the probe, said the sale of Sequoia and the end of the investigation will allow both companies to grow without a cloud of suspicion hanging over their operations.
''We think Sequoia is a great company with the best product out there, and it is going to become the number one voting vendor in the U.S.,'' said Smartmatic CEO Antonio Mugica. ``It would be [a mistake] for it not to realize its full potential because of this distraction about ownership.''
ALLEGATION
Even with the sale of Sequoia, Smartmatic's dealings with the federal government may not be over.
Earlier this month, the company contacted the Justice Department to deny allegations, first reported in El Nuevo Herald, that its owners paid a bribe to obtain the contract to supply voting machines to the Venezuelan government. Company representatives also disputed allegations that it failed to pay U.S. income taxes.
The company, with offices in Boca Raton and incorporated in Delaware, has not been notified that it is the target of a criminal investigation, said Jeff Bialos, a Washington, D.C. attorney for Smartmatic.
''The company hasn't been subpoenaed and all the underlying activity was associated with legal advice at the time,'' he said. ``The company believes there is no basis in the allegations.''
The Justice Department has refused to comment on the matter.
Mugica and other Smartmatic representatives have categorically denied that the company has any connections to Chávez, a harsh critic of the Bush administration.
`CLOSELY MONITOR'
Smartmatic is withdrawing from the investigation by the Treasury department's Committee on Foreign Investments in the United States.
A CFIUS committee spokeswoman confirmed the probe would be closed.
''Though the CFIUS process had not yet concluded, Smartmatic has decided to sell its ownership of Sequoia, as the companies have said,'' spokeswoman Brookly McLaughlin said in a written statement. ``CFIUS has therefore agreed to allow the company to withdraw from the CFIUS process. CFIUS will closely monitor the sale process.''
Smartmatic, which purchased Sequoia in 2005, is majority-controlled by Mugica, a dual Spanish-Venezuelan citizen.
The company drew attention from Chávez critics after The Miami Herald revealed in 2004 that the Venezuelan government owned 28 percent of Bizta, a software development company founded and operated by Mugica and another Venezuelan, Alfredo Anzola. Bizta repurchased those shares after the article was published.
Smartmatic representatives call the arrangement a loan, and say the company had to ''pledge'' the shares to the government as part of the deal but that the loan was later paid off.
In 2004, Smartmatic partnered with Bizta and Venezuelan telecommunications giant CANTV to land a $91 million contract to provide electronic voting machines for Venezuelan elections.
Smartmatic has a convoluted corporate structure, involving dozens of proxy owners, that makes it difficult to independently determine whether there is any Venezuelan government connection.
It has a paper trail leading from Curacao to Amsterdam to Delaware and Boca Raton as well as Oakland, Calif.
REACTION
A U.S. congresswoman, who wrote a letter to CFIUS raising concerns about the Smartmatic-Sequoia deal before CFIUS launched the review, said that doubts still remain despite the company's decision to sell the subsidiary and end the investigation.
''In my opinion, Smartmatic's reported action shows that the company could not or was unwilling to get beyond the doubts surrounding this deal and that the CFIUS review was important,'' said Rep. Carolyn Maloney, D-N.Y.
9/11 EFFECT
Smartmatic representatives say the company fell victim to changing attitudes toward foreign investment in sensitive industries, as evidenced by the flap over the sale of major U.S. port operations to a Dubai company. After that deal ignited a political firestorm, Dubai Ports World agreed to sell the operations to an American company.
''The environment for foreign investors has changed markedly in the post-9/11, post-Dubai Ports world,'' Bialos said. ``There is much more focus on foreign investment in critical infrastructure.''

WSJ: Smartmatic to Sell Sequoia

2007-01-19T12:14:00.000-08:00

Smartmatic to Shed U.S. Unit,End Probe Into Venezuelan Links
By BOB DAVIS
December 22, 2006; Page A6
WASHINGTON -- Voting-machine company Smartmatic Corp. said it would sell its U.S. subsidiary to end a review by the Committee on Foreign Investment in the U.S. into whether Smartmatic is partially owned by the Venezuelan government.
Smartmatic, owned by Venezuelan entrepreneurs who split their time between Caracas and Boca Raton, Fla., portrayed itself as the latest victim of a U.S. protectionist response to foreign investment in sensitive industries.
Earlier this year, a company owned by the government of Dubai, a Gulf emirate that is part of the United Arab Emirates, drew opposition in Congress and some media outlets with plans to buy a company that runs commercial operations at several U.S. ports. The company later sold the port-operations business."
Given the current climate of the United States marketplace, with so much public debate over foreign ownership of firms in an area that is viewed as critical U.S. infrastructure -- election technology -- we feel it is in both companies' best interests to move forward as separate entities with separate ownership," Smartmatic said. The company said it plans to sell Sequoia Voting Systems Inc., headquartered in Oakland, Calif., which it purchased in early 2005 for $16 million.
The Committee on Foreign Investment, known as the CFIUS, reviews foreign acquisitions to see if they pose national-security concerns. Normally, such reviews are conducted before deals close. The Smartmatic acquisition drew attention earlier this year because of concerns that the government run by Venezuelan President Hugo Chávez, an opponent of U.S. policy, owns a stake in the company.
Since its purchase by Smartmatic, Sequoia's sales have risen sharply to a projected $200 million in 2006, said Smartmatic's chief executive, Anthony Mugica. He said the firm has a "healthy" profit but didn't provide a specific figure. Nevertheless, the CFIUS investigation, as well as a separate Justice Department probe into whether Smartmatic had paid bribes in Venezuela, had become a "distraction" for senior management, Mr. Mugica said.
With the 2008 election on the horizon, Mr. Mugica said, "it would be an extremely big mistake to not capitalize on the opportunity [of selling voting-machine equipment] by having a handicap, even if it was only a fantasy or a myth about Sequoia."Sequoia voting machines were used in 16 states and the District of Colombia in 2006. Smartmatic, which has revenue of about $100 million, focuses on Venezuela and other markets outside the U.S. After selling Sequoia, Mr. Mugica said, he hoped Smartmatic would work with Sequoia on projects in the U.S., though Smartmatic wouldn't take an equity stake.
The proposed sale may dim the spotlight on the Justice Department probe and make it easier to resolve.
Among the issues the department is looking at are whether Smartmatic paid bribes to Venezuelan officials to win an election contract in 2004 and failed to pay taxes owed in the U.S. Smartmatic said it is cooperating with that probe and that the Justice Department hasn't issued any subpoenas to Smartmatic employees.
Jeffrey Bialos, a lawyer for Smartmatic, said the Justice Department investigation didn't play into its sales decision. Rather, he said, the attitude in the U.S. to foreign acquisitions had hardened since the Sept. 11, 2001, terror attacks.A spokeswoman for the Treasury, which takes the lead on matters regarding the CFIUS, said the committee agreed to end the Smartmatic review but added that "CFIUS will closely monitor the sale process."
Smartmatic came to prominence in 2004 when its machines were used in an election to recall President Chávez, which Mr. Chávez won handily -- and which the Venezuelan opposition said was riddled with fraud. Smartmatic put together a consortium to conduct the recall elections, including a company called Bizta Corp., in which Smartmatic owners had a large stake. For a time, the Venezuelan government had a 28% stake in Bizta in exchange for a loan.
Bizta paid off the loan in 2004, and Smartmatic bought the company the following year. But accusations of Chávez government control of Smartmatic never ended, especially since Smartmatic scrapped a simple corporate structure, in which it was based in the U.S. with a Venezuelan subsidiary, for a far more complex arrangement. The company said it made the change for tax reasons, but critics, including Rep. Carolyn Maloney (D., N.Y.) and TV journalist Lou Dobbs, pounded the company for alleged links to the Chávez regime.
Write to Bob Davis at bob.davis@wsj.com1

U.S. Authorities Probe How Smartmatic Won Venezuela Election Pact

2006-12-03T00:01:00.000-08:00

From the WS-Jrnl.

WASHINGTON -- Federal investigators are looking into whether Smartmatic Corp., a voting-machine company whose equipment is used widely in the U.S. and abroad, paid bribes to win a Venezuela election contract in 2004.
Smartmatic's actions already are under a separate investigation by the Committee on Foreign Investment in the U.S., which reviews foreign acquisitions to see if they pose national-security concerns.
In 2005, Smartmatic, which is owned by Venezuelan investors who split their time between Caracas and Boca Raton, Fla., purchased a U.S. voting-machine company, Sequoia Voting Systems Inc.
Cfius is looking at whether that acquisition should be reversed on national-security grounds.
At the same time, the Justice Department has been conducting a probe of Smartmatic for possible violations of the Foreign Corrupt Practices Act and recently started looking at possible tax evasion as well, said two individuals familiar with the case. The Justice Department has informed Cfius representatives from U.S. agencies about their inquiry, these people said. Jeffrey Bialos, an attorney for Smartmatic, said yesterday the Justice Department told the company it was looking into its actions, but that Smartmatic wasn't a target of an investigation.
Smartmatic employees haven't been subpoenaed in the inquiry, Mr. Bialos added. That suggests that the probe is at an early stage. "The company believes it conducted itself properly and within the law," Mr. Bialos said.
A Justice Department spokeswoman declined to comment. Smartmatic has drawn attention because of concerns that the government of Venezuelan President Hugo Chavez, an opponent of U.S. policies, has a stake in the company.
That is a focus of the Cfius review. In 2004, Smartmatic's machines were used in an election to recall President Chavez, which Mr. Chavez won handily -- and which members of the Venezuelan opposition say was riddled with fraud. Smartmatic machines will be used Sunday in Venezuela's presidential election.
The company said it is the victim of false allegations made by two former executives, whom the company declined to name. Smartmatic said it would shortly send the two former employees a letter to "cease and desist their activities," which Smartmatic said violated agreements they made with the company. News of the Justice Department probe was reported earlier by el Nuevo Herald, a Spanish-language newspaper in Miami.
Essentially, the Justice Department is looking into whether Smartmatic got its start in Venezuela by bribing officials and then improperly avoiding its tax liability in the U.S. The company says it paid $1.5 million to a Venezuelan consultant who is close to the Chavez government and helped to win Smartmatic business.
The allegation being investigated is that Smartmatic actually paid as much as $4 million to the consultant, then deleted a substantial portion of those payments from its corporate records to hide the extent of its payments to a friend of the Chavez regime.
Antonio Mugica, Smartmatic's chief executive, said the company had budgeted a larger amount for the consultant than it ended up paying him, thus explaining the difference between the two amounts. The tax question dates to late 2004 when Smartmatic scrapped a simple corporate structure, under which it was based in the U.S. with a Venezuelan subsidiary.
It adopted a complex offshore structure, with headquarters in the Netherlands Antilles; a main subsidiary in the Netherlands; and a variety of subsidiaries in the U.S., Barbados, Venezuela and Mexico. That raised the question of where to pay taxes on $25 million in revenue from a contract to supply voting machines for Venezuelan regional elections: the U.S. or a lower-tax jurisdiction.
Smartmatic paid taxes in Barbados, which the company said was proper because one of its international companies signed the deal.
"The taxes due and owed are to Barbados authorities," said Mr. Mugica, who added that the company had consulted legal counsel and accounting firms on the issue.
Mr. Mugica said the company hasn't thus far been harmed by publicity about the probes. Customers "welcome the fact" that the company is trying to clear up allegations concerning its actions, he said.

Smartmatic denies tax, bribery allegations

2006-12-02T12:53:00.000-08:00

http://www.miami.com/mld/miamiherald/news/16145697.htm?template=contentModules/printstory.jsp

Posted on Sat, Dec. 02, 2006
VOTING MACHINES

A Boca Raton company owned by Venezuelans denied allegations it evaded U.S. taxes and paid a bribe to secure a contract in Venezuela to supply electronic voting machines.
BY ALFONSO CHARDY AND JAY WEAVER
achardy@MiamiHerald.com
Smartmatic, an international company with offices in Boca Raton, has contacted the Justice Department to deny allegations that its Venezuelan owners paid a bribe to secure a $91 million contract to supply electronic voting machines in Venezuela, an attorney for the firm said Friday.
''We have informally told the Justice Department that there is no basis for these allegations,'' said Jeffrey Bialos, a Washington, D.C. attorney retained by Smartmatic.
He said Justice officials told the company this fall that it was not the target of a criminal investigation, nor has it received any subpoenas.
The company, incorporated in Delaware, also denied allegations that it failed to pay U.S. income taxes.
Smartmatic's denials mark yet another chapter in the convoluted saga of the Boca Raton firm that last year bought Sequoia Voting Systems of Oakland, Calif., one of the nation's leading suppliers of electronic voting machines. Sequoia machines operate in Washington, D.C. and 16 states, including four counties in Florida: Palm Beach, Indian River, Hillsborough and Pinellas. Smartmatic machines will be used in Sunday's presidential election in Venezuela.
Smartmatic also is being investigated by a Treasury-led panel over whether the government of Venezuelan President Hugo Chávez, increasingly at odds with President Bush, is a secret business partner. Smartmatic has denied any link to the Chávez government.
In another development, Rep. Carolyn Maloney, D-N.Y., who helped spark the Smartmatic probe by the Treasury-led Committee on Foreign Investment in the United States, sent a letter Thursday to Treasury Secretary Henry Paulson Jr. to urge his agency to publicize its findings as soon as the review is completed.
The Wall Street Journal reported Friday that the Justice Department has been probing Smartmatic for possible violations of the Foreign Corrupt Practices Act and possible tax evasion. A Justice Department spokesman on Friday refused to comment.
El Nuevo Herald reported Thursday that agents from the Internal Revenue Service and the Federal Bureau of Investigation are investigating allegations involving tax evasion, an excessive commission to a lobbyist in Caracas and alleged death threats by Smartmatic President Antonio Mugica.
In a statement sent to El Nuevo Herald, a copy of which the company sent Friday to The Miami Herald, Smartmatic said Mugica ``has never threatened any employee.''
The statement said the company has concluded that the allegations came from two former employees who ``appear to be acting in a manner inconsistent with their separation and confidentiality agreements.''
Bialos said Smartmatic sent the ex-employees -- a chief financial officer and comptroller -- ''cease and desist'' letters, reminding them of the confidential nature of their ''voluntary termination'' agreements. He said Smartmatic would take legal action, if necessary, but was not attempting to stop them from talking with authorities.
''The company's policy is one of full and open disclosure,'' Bialos said.
Smartmatic raised suspicions among Chávez's critics after The Miami Herald revealed in May 2004 that two of its main owners, Mugica and Alfredo Anzola, also owned Bizta Corp. -- a small software company in Caracas in which the Venezuelan government had a 28 percent ownership stake.
The disclosure sparked concern among Chávez's political opponents because Bizta, Smartmatic and Venezuelan telephone giant CANTV had won the $91 million contract to supply electronic voting machines before the 2004 referendum that Chávez won. Just before the referendum took place, Bizta announced it would buy back the government shares.
Concern resurfaced after Smartmatic acquired Sequoia last year and Maloney asked the Treasury-led group to investigate. The Miami Herald reported in October that the interagency panel had begun a full-fledged investigation into whether the Chávez government played a behind-the-scenes role in Smartmatic. Smartmatic later confirmed that it had ''voluntarily submitted'' to the review.
Brookly McLaughlin, a Treasury spokeswoman, said Friday there was nothing new to report on the investigation.
The panel determines whether a particular foreign investment ''threatens to impair the national security of the United States.'' The panel has an initial 30 days to review a transaction but can extend the probe 45 more days if at least one member of the committee determines that a particular investment threatens to impair national security. Though no one would say whether the probe is now in the 45-day stage, all indications are that it is. The Miami Herald reported on the original review in July.
According to procedures, the panel can recommend that the president suspend or prohibit the investment in question or offer another recommendation or none at all.
El Nuevo Herald said Thursday that federal investigators were reviewing Smartmatic payments to Morris Loyo, a retired Venezuelan air force captain with ''ample connections'' to the Chávez government, as commissions for helping to obtain the voting machine contract.
Smartmatic confirmed employing Loyo ''as a lobbyist/salesperson and independent contractor to assist in securing election contracts in Venezuela'' but would not say how much he was paid.

REP. MALONEY: Treasury Urged to Make Public the Results of CFIUS Investigation of Smartmatic

2006-12-01T20:46:00.000-08:00

Press Release
For Immediate Release
December 01, 2006
Contact: Afshin Mohamadi
202-225-7944

Treasury Urged to Make Public the Results of CFIUS Investigation of Smartmatic

Rep. Maloney cites need to reassure public about U.S. voting system

WASHINGTON, DC – The Member of Congress who first highlighted the need for an investigation of a deal involving voting machine manufacturer Smartmatic is urging the Department of Treasury to make the results of the investigation public when they are finalized (letter to Treasury). Smartmatic, a company with Venezuelan roots, announced shortly before November’s elections that it was indeed undergoing a Committee on Foreign Investment in the United States investigation related to its purchase of Sequoia Voting Systems in 2005.
Rep. Carolyn Maloney (NY-14) wrote this week to Treasury Secretary Henry Paulson to point out the public unease about electronic voting, due to numerous glitches on Election Day and press stories about the Smartmatic investigation. It has also been reported this week that Smartmatic is the subject of an ongoing Department of Justice investigation into the possibility that the company bribed the Venezuelan government for contracts and may have committed tax fraud.
CFIUS investigations can result in no action if the Committee finds no potential problems, a presidentially-mandated break up of the deal if the Committee has serious concerns, or various levels of mitigation if the Committee believes that there are some issues that need to be addressed. Maloney says that making public the results of the CFIUS investigation would boost public confidence in the government’s awareness of the American voting system.
“Let’s face it, after all of the glitches and disturbing stories we see each Election Day, electronic voting has become synonymous with anxiety and uncertainty,” said Maloney. “The best way our government can reassure the American people that it has total awareness and control of our voting machines is to publicize the steps it is taking to ensure the integrity of our voting system.
“The Smartmatic purchase of Sequoia may well get a clean bill of health, and for the integrity of recent elections, I hope it does. There are many possible outcomes, from an approval to a presidentially-mandated divestiture to a mitigation agreement addressing certain issues. No matter what, the public should be alerted when this case is put to bed and informed about how it was resolved. This is especially true in light of the news that Smartmatic is also the subject of a separate government investigation related to bribery and tax fraud charges. I hope Smartmatic will release the results voluntarily, and if it doesn’t, I hope the Treasury will prod them to do it.”
Background
In May, Maloney first raised questions about Smartmatic with then-Treasury Secretary Jack Snow, inquiring whether the deal for Sequoia had undergone a CFIUS investigation (http://maloney.house.gov/index.php?option=com_content&task=view&id=1095&Itemid=61).
In July, the Treasury acknowledged that it had initially contacted Smartmatic, although a CFIUS investigation was not underway at the time. In early October, Maloney wrote to Paulson to apprise him of the lingering questions surrounding Smartmatic (http://maloney.house.gov/documents/financial/acquisitions/20061006ElectionsCFIUS_paulson.pdf).
In late October, Smartmatic announced that it was undergoing a CFIUS investigation (http://maloney.house.gov/index.php?option=com_content&task=view&id=1225&Itemid=61).

EL NUEVO: SMARTMATIC INVESTIGATED BY IRS, FBI AND CFIUS

2006-11-30T20:52:00.000-08:00

http://www.miami.com/mld/elnuevo/news/world/venezuela/16126388.htm?template=contentModules/printstory.jsp

Posted on Thu, Nov. 30, 2006
Bajo lupa federal firma que facilita máquinas de votar a Venezuela
CASTO OCANDO
El Nuevo Herald
La firma de máquinas de votación Smartmatic, con una sede corporativa en Boca Ratón, está en el ojo de dos investigaciones federales desconocidas hasta ahora y centradas en temas que abarcan desde supuesta evasión fiscal en los Estados Unidos hasta presuntos pagos en Venezuela de comisiones millonarias no declaradas, indicaron documentos y testimonios.
Las pesquisas se añaden a otra que el Departamento del Tesoro abrió a la firma a mediados de este año.
Dos fuentes familiarizadas con las operaciones de la empresa confirmaron a El Nuevo Herald que agentes del Departamento de Rentas Internas (IRS) y la Oficina Federal de Investigaciones (FBI) las interrogaron extensamente sobre las supuestas irregularidades.
Aparentemente las investigaciones, iniciadas en el 2005, comenzaron luego que documentos que mostraban presuntas actividades financieras ilegales de la empresa se filtraron a las agencias federales mencionadas.
Smartmatic es una firma cuyos dueños son ciudadanos venezolanos, y que el año pasado adquirió Sequoia Voting Systems, de California, a través de la cual amplió su penetración en el mercado electoral de Estados Unidos. Sequoia, que no es objeto de investigación federal, provee máquinas electrónicas de votación en el Distrito de Columbia y 16 estados, incluyendo el condado Palm Beach, en Florida. Por otra parte, Smartmatic se ha convertido en el principal abastecedor de tecnología electoral del Consejo Nacional Electoral (CNE) de Venezuela, y tendrá a su cargo las elecciones presidenciales del próximo domingo 3 de diciembre.
Según un dossier de los papeles relacionados con la indagatoria federal, a los que tuvo acceso El Nuevo Herald, la firma presuntemente pagó una multimillonaria comisión a un conocido ex militar venezolano para obtener un contrato de $90 millones con el CNE para automatizar la votación para el Referéndum Revocatorio de agosto del 2004.
Las pesquisas federales también tienen como objetivo determinar si la firma dejó de pagar o no al fisco estadounidense más de $12 millones en impuestos en los últimos dos años, incluyendo unos $4 millones que supuestamente transfirió a la casa matriz del holding en Barbados, de los fondos obtenidos por el segundo contrato que obtuvo con el CNE para las elecciones regionales del 2004 en Venezuela.
En una declaración, Smartmatic afirmó que los señalamientos de presuntas irregularidades son ''alegaciones sin fundamento'' de ex empleados despedidos por la firma, y negó cualquier ilegalidad en sus operaciones corporativas.
''Recientemente hemos llegado a creer que dos ex empleados de Smartmatic están haciendo alegaciones sin fundamento sobre la compañía y parecen estar actuando de forma inconsistente con acuerdos de separación y confidencialidad con la compañía'', expresó la declaración.
Las dos indagaciones federales, iniciadas en Washington, el sur de la Florida y Caracas, tratan de ver si el complejo esquema de compañías creadas por Smartmatic en Curazao, Holanda, Barbados y en el estado de Delaware, supuestamente contribuyó a que la firma evadiera impuestos o si, por el contrario, las operaciones financieras fueron transparentes y legales.
Según los documentos, Smartmatic realizó siete pagos a Morris Loyo, un capitán retirado de la Fuerza Aérea Venezolana con amplias conexiones en el gobierno chavista antes de realizarse el referéndum revocatorio, los cuales aparentemente no fueron reportados al IRS.
Luego supuestamente hubo otros dos pagos a Loyo posteriores al evento electoral que sí fueron declarados, y que formaban parte de un contrato entre Smartmatic y el ex militar. En el trato se estipulaba una comisión de ventas de $1.5 millones por haber ayudado a obtener el contrato de poco más de $90 millones para el referéndum.
En total, la firma de Boca Ratón pagó a Loyo $4,128,850 a través de nueve transferencias a una cuenta del ex militar en el Banco Hapoalim B. M. en Nueva York, indican los papeles.
''En la declaración de impuestos de Smartmatic correspondientes al 2004, sólo aparece declarado como comisiones de venta un total de $1.5 millones al señor Loyo, cuando en realidad [éste] recibió por lo menos $2.6 millones adicionales en pagos no declarados al IRS'', dijo una fuente familiarizada con esta indagación.
A esto, Smartmatic respondió que Loyo trabajó para la firma como ``lobista/vendedor y contratista independiente para ayudar a asegurar contratos electorales en Venezuela, de la misma forma que muchos vendedores norteamericanos emplean a cabilderos estatales y vendedores para que ayuden a conseguir contratos''.
El FBI investiga, además, si la empresa revisó a fondo el pasado y las vinculaciones políticas del ex militar, así como su presunta cercanía a personeros del gobierno chavista, como exige la Ley de Prácticas Corruptas en el Extranjero (FCPA).
En cuanto a este tema, la firma afirmó que aplica una ''robusta política'' para combatir la corrupción en sus actividades en el extranjero, como lo establece la FCPA.
El Nuevo Herald trató de obtener un comentario de Loyo sobre estos pagos, pero no recibió respuesta a un mensaje dejado en su correo de voz en las Residencias Caracas Palace, el lugar donde vive el ex militar según constató la administración del complejo residencial. El ex capitán tampoco contestó llamadas que El Nuevo Herald hizo a su celular.
Por otra parte, el FBI procesa denuncias de amenazas de muerte presuntamente proferidas por el presidente de Smartmatic, Antonio Mugica, a empleados y ex empleados de la empresa que cuestionaron prácticas administrativas que ellos consideraron irregulares, conoció El Nuevo Herald.
Pero Mugica negó categóricamente, en una conferencia telefónica con El Nuevo Herald, haber amenazado de muerte a ''algún empleado'' de la firma de elecciones.
Las denuncias alegan que el presidente de Smartmatic habría advertido a por lo menos un ex empleado sobre el ''peligro'' de que se filtrasen documentos internos, así como de sus supuestas influencias en la Disip, la policía política del gobierno chavista.
Leonardo Riera, un empleado administrativo de Smartmatic hasta poco después del referéndum, confirmó en una entrevista con El Nuevo Herald que había recibido amenazas de Mugica y que presentó su denuncia ante el FBI a mediados del año pasado porque temía represalias.
''Sí, he sido amenazado de muerte, y lo he denunciado ante las autoridades federales, con las cuales he colaborado activamente en las investigaciones'', aseveró Riera.
Otra persona, la cual pidió el anonimato por temor a represalias, manifestó que Mugica lo había amenazado en la oficina de Smartmatic en Boca Ratón a principios del 2005. La fuente confió a El Nuevo Herald que el presidente de la firma también le hizo una advertencia sobre su aparente influencia en la Disip. Esta persona dijo que poco después denunció al presunto hecho ante el FBI.
Como es usual en estos casos, el FBI y el Departamento de Justicia declinaron hacer comentarios sobre las investigaciones.
''No he hecho amenazas [de muerte] ni ahora ni nunca a ninguno de mis empleados. Todos los que me conocen, la mayoría de los empleados que me conocen, saben que esto no está absolutamente en mi naturaleza'', aseguró Mugica.
''No sé si esto es relevante o no, pero lo uso como un ejemplo: puedo decirle que soy vegetariano, y una de las principales razones por las cuales ni siquiera como pescado es porque no creo que siquiera está justificado matar a un pez para [usarlo como] alimento. Ir en contra de una persona es algo impensable [para mí]'', acotó Mugica.
El IRS indaga también si se produjo un supuesto fraude fiscal en dos auditorías de la corporación realizadas en el 2004 por una firma de contabilidad de Miami.
Documentos de agencias federales a los que tuvo acceso El Nuevo Herald indican que la firma Morrison, Brown, Argiz & Farra, LLP, certificó dos auditorías aparentemente contradictorias de las finanzas de Smartmatic durante 2004.
Según la primera auditoría, titulada ''Smartmatic LLC (A Wholly-Owned Subsidiary of Smartmatic International Corp.) Financial Statements'', del 31 de diciembre del 2004, la firma debía pagar un total de $4,073,809 en impuestos al IRS sobre los ingresos obtenidos de un segundo contrato de $26 millones con el CNE de Venezuela. Este informe fue enviado a los departamentos electorales de la Ciudad de Chicago y el Condado Cook, en Illinois, y al del estado de Michigan, entre otros.
No obstante, en una segunda auditoría, titulada ''Smartmatic International Corporation and Subsidiary (A Wholly-Owned Subsidiary of Smartmatic International Holdings, B.V.), Consolidated Financial Statements'', con la misma fecha que la del párrafo anterior, la cifra a pagar en impuestos aparece como $479,653. Igualmente, este informe fue distribuido a los departamentos de elecciones antes mencionados.
Entonces, entre las dos auditorías hay una diferencia de $3.6 millones. De acuerdo con la indagación federal, el cambio de los montos a pagar en impuestos se produjo luego de que se firmara un Acuerdo de Servicio entre Smartmatic International Corporation, registrada en Barbados como la Casa Matriz, y Smartmatic LLC, registrada en el estado de Delaware. El Acuerdo se firmó el 25 de marzo de 2005, después que tuvieron lugar las operaciones por las cuales se estaba pagando impuestos.
La respuesta de la firma sobre el tema fue directa: ''Ya sea en el 2004 o en cualquier otro año, Smartmatic siempre ha pagado todos sus impuestos debidos y adeudados en las jurisdicciones donde opera. Al presentar declaraciones de impuestos del 2004 y de otros años, Smartmatic siempre ha recibido el consejo de los mejores profesionales, incluyendo firmas legales y de contabilidad'', precisó la declaración.
''Hemos provisto y revelado absolutamente todas nuestras transacciones'', agregó Mugica.
Smartmatic ha declarado al IRS un total cercano a los $97 millones en contratos recibidos en el 2004 ''por trabajo electoral realizado fuera de los Estados Unidos, y por entidades no estadounidenses de Smartmatic'', indicó la declaración.
Un cuestionario enviado por El Nuevo Herald a Morrison, Brown, Argiz & Farra no fue respondido. Varias llamadas realizadas a las oficinas de la firma en la avenida Brickell tampoco fueron devueltas.
Ellie Michaud, una vocera del departamento de investigaciones criminales del IRS para el sur de la Florida, declinó hacer comentarios sobre el caso.

DEMOCRATS.COM: Is the Devil in the Details?

2006-11-05T08:54:00.000-08:00

Posted by Chip

http://www.democrats.com/node/10808

Is the election integrity of 17 states compromised by their use of voting machines that could have ties to Venezuelan President Hugo Chavez?
Sequoia, third largest electronic voting machine vendor in the US, sold to Venezuela's Smartmatic on March 8, 2005. Twenty months later, and barely more than a week before the 2006 mid-term elections, Sequoia and Smartmatic "voluntarily submitted a notice to the U.S. Committee on Foreign Investment in the United States (CFIUS) to allow the U.S. Government to review Smartmatic's acquisition of Sequoia."
According to its website, “Smartmatic is the device networking company. We envision a world where everything will be connected. And we're making it happen...here and now.” The company uses "Device-networking applications" (which) "share common functionality in areas like device and device network management; remote device monitoring and servicing; and delivery of value added services based on device networking applications." We've all heard of six degrees among humans, but frankly, the idea of our voting equipment being connected and remotely operable is more disconcerting than comforting.
It's not just connectivity that's disconcerting, however. In Venezuela, a technician named Leopoldo Gonzalez, using a program downloaded from the Internet, demonstrated that Smartmatic machines operate by keeping a sequence of the votes cast along with the voter's identity, preventing a transparent process for maintaining vote secrecy.
In May, 2006, NY Democratic Congressional Representative Carolyn B. Maloney asked Treasury Secretary John Snow whether the Sequoia-Smartmatic deal was either reviewed by the Treasury Department or vetted through the Committee on Foreign Investments in the US (CFIUS).
“Just as the Dubai ports deal was a priority security issue, any potential foreign influence on our elections system is vital to our national security and deserves at least a look,” said Maloney. “It doesn’t seem that the deal for Sequoia was vetted by our government, and I want to know why.”
In 1993 the Byrd amendment made one criteria for CFIUS investigation that "the acquirer is controlled by or acting on behalf of a foreign government." The history of Smartmatic raises this issue as Bizta, a start-up company that was folded into Smartmatic, received $200,000 in start-up funds from the Venezuelan Finance Ministry in exchange for a 28% stake and a seat on the company's board. And, according to Congresswoman Maloney's second letter to Treasury Secretary Snow on October 6, 2005, "Smartmatic shared a founder, officers, directors, and a principal place of business with Bizta."
Smartmatic provided the voting machines on which the votes were cast in Chavez's 2004 recall election, subsequently declared legitimate despite the opposition's claims of vote rigging. The official audit was reviewed by American election experts, one of whom found the audit badly flawed. “They did it all wrong,” one of the authors of the study, Avi Rubin, a professor of computer science at Johns Hopkins University, said in an interview. Dr. Rubin's work with Bev Harris is shown in HBO's currently showing documentary "Hacked Democracy."
International relations between the countries' and their two presidents have been more strained since President Chavez told the United Nations: "And the devil came here yesterday. Yesterday the devil came here. Right here." [crosses himself] "And it smells of sulfur still today."

Investor's Business Daily: Hugo's Revenge

2006-11-03T20:24:00.000-08:00

Posted 11/3/2006

Elections: If missing smart-cards and multiple ballot-casting buttons aren't enough trouble from electronic voting machines, the one complication we don't need is a foreign predator at the controls.

Think it can't happen? Well, it already has, with Smartmatic, an electronic voting firm that owes its presence in U.S. markets to Venezuelan leader Hugo Chavez's abundant cash.

Until 2004, Smartmatic was a little-known startup in Boca Raton, Fla., run by two 30-year-old Venezuelan engineers who claimed their only motivation was to prevent another 2000 Florida hanging-chad controversy. They were worth at most $2 million and operated out of one of their father's houses in Boca Raton.

They had a sudden change of fortune after Chavez got involved. The two Venezuelans, Antonio Mujica and Alfredo Anzola, won gigantic contracts from Venezuela's government for Chavez's recall referendum in 2004. It was a referendum he declared he would win no matter what. And, given the fraud charged in the aftermath, he apparently did.

Mathematicians Ricardo Hausmann of Harvard and Roberto Rigobon of MIT, who studied the referendum, declared it fraudulent with 99% certainty, pointing to manipulation of the Smartmatic software in the counting room, where two-way electronic communication seemed to take place as the votes were tallied.

Shortly after that, Smartmatic bought up U.S.-based Sequoia Voting Systems for $16 million, flush with $120 million in Venezuelan cash. They made sure to thank their biggest client.
They took out a front page ad in the New York Times specifically touting the Venezuela referendum, "free of hanging chads," something that doubled as spin control for Chavez as a firestorm of controversy over fraud swirled in Caracas.

What they didn't say was that something much worse than hanging chads happened in Venezuela — a total loss of voter confidence. At the next Smartmatic election in Caracas, in December 2005, 82% of voters stayed home.

Now that the U.S. Committee on Foreign Investment is looking into the Venezuelan government's involvement in U.S. elections, the voting machine company's executives seem to be distancing themselves from that fiasco. Sequoia's CEO Jack Blaine declared Monday that "Sequoia designs voting systems. It does not manage elections and it does not count votes."
Maybe so. But Smartmatic, mostly through its Sequoia subsidiary, operates in 20 states, according to Smartmatic's Web site (the Sequoia site says 16). And with 33% of Americans forced into electronic voting, millions will have no choice but to use the machines.

If U.S. e-voting goes badly, Americans will avoid voting, like Venezuelans. With many hotly disputed congressional races that are bound to be close, even minor manipulation would be disastrous.

We know which side Hugo Chavez is on in this election. The specter of foreign control over our voting apparatus demands utmost scrutiny by federal regulators. If not, American voters someday may be as cynical about their democracy as Venezuelans.

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NY TIMES: Voting Machine Company Submits to Inquiry

2006-11-01T07:33:00.000-08:00

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.

NY TIMES: U.S. Investigates Voting Machines’ Venezuela Ties

2006-10-31T08:31:00.000-08:00

October 29, 2006
U.S. Investigates Voting Machines’ Venezuela Ties
By TIM GOLDEN
The federal government is investigating the takeover last year of a leading American manufacturer of electronic voting systems by a small software company that has been linked to the leftist Venezuelan government of President Hugo Chávez.
The inquiry is focusing on the Venezuelan owners of the software company, the Smartmatic Corporation, and is trying to determine whether the government in Caracas has any control or influence over the firm’s operations, government officials and others familiar with the investigation said.
The inquiry on the eve of the midterm elections is being conducted by the Committee on Foreign Investment in the United States, or Cfius, the same panel of 12 government agencies that reviewed the abortive attempt by a company in Dubai to take over operations at six American ports earlier this year.
The committee’s formal inquiry into Smartmatic and its subsidiary, Sequoia Voting Systems of Oakland, Calif., was first reported Saturday in The Miami Herald.
Officials of both Smartmatic and the Venezuelan government strongly denied yesterday that President Chávez’s administration, which has been bitterly at odds with Washington, has any role in Smartmatic.
“The government of Venezuela doesn’t have anything to do with the company aside from contracting it for our electoral process,” the Venezuelan ambassador in Washington, Bernardo Alvarez, said last night.
Smartmatic was a little-known firm with no experience in voting technology before it was chosen by the Venezuelan authorities to replace the country’s elections machinery ahead of a contentious referendum that confirmed Mr. Chávez as president in August 2004.
Seven months before that voting contract was awarded, a Venezuelan government financing agency invested more than $200,000 into a smaller technology company, owned by some of the same people as Smartmatic, that joined with Smartmatic as a minor partner in the bid.
In return, the government agency was given a 28 percent stake in the smaller company and a seat on its board, which was occupied by a senior government official who had previously advised Mr. Chávez on elections technology. But Venezuelan officials later insisted that the money was merely a small-business loan and that it was repaid before the referendum.
With a windfall of some $120 million from its first three contracts with Venezuela, Smartmatic then bought the much larger and more established Sequoia Voting Systems, which now has voting equipment installed in 17 states and the District of Columbia.
Since its takeover by Smartmatic in March 2005, Sequoia has worked aggressively to market its voting machines in Latin America and other developing countries. “The goal is to create the world’s leader in electronic voting solutions,” said Mitch Stoller, a company spokesman.
But the role of the young Venezuelan engineers who founded Smartmatic has become less visible in public documents as the company has been restructured into an elaborate web of offshore companies and foreign trusts.
“The government should know who owns our voting machines; that is a national security concern,” said Representative Carolyn B. Maloney, Democrat of New York, who asked the Bush administration in May to review the Sequoia takeover.
“There seems to have been an obvious effort to obscure the ownership of the company,” Ms. Maloney said of Smartmatic in a telephone interview yesterday. “The Cfius process, if it is moving forward, can determine that.”
The concern over Smartmatic’s purchase of Sequoia comes amid rising unease about the security of touch-screen voting machines and other electronic elections systems.
Government officials familiar with the Smartmatic inquiry said they doubted that even if the Chávez government was some kind of secret partner in the company, it would try to influence elections in the United States. But some of them speculated that the purchase of Sequoia could help Smartmatic sell its products in Latin America and other developing countries, where safeguards against fraud are weaker.
A spokeswoman for the Treasury Department, which oversees the foreign investment committee, said she could not comment on whether the panel was conducting a formal investigation.
“Cfius has been in contact with the company,” said the spokeswoman, Brookly McLaughlin, citing discussions that were first disclosed in July. “It is important that the process is conducted in a professional and nonpolitical manner.”
The committee has wide authority to review foreign investments in the United States that might have national security implications. In practice, though, it has focused mainly on foreign acquisitions of defense companies and other investments in traditional security realms.
Since the political furor over the Dubai ports deal, members of Congress from both parties have sought to widen the purview of such reviews to incorporate other emerging national security concerns.
In late July, the House and the Senate overwhelmingly approved legislation to expand the committee’s scope, give a greater role to the office of the director of national intelligence and strengthen Congressional oversight of the review process.
But the Bush administration opposed major changes, and Congressional leaders did not act to reconcile the two bills before Congress adjourned.
Foreigners seeking to buy American companies in areas like defense manufacturing typically seek the committee’s review themselves before going ahead with a purchase. Legal experts said it would be highly unusual for the panel to investigate a transaction like the Sequoia takeover, and even more unusual for the panel to try to nullify the transaction so long after it was completed.
It is unclear, moreover, what the government would need to uncover about the Sequoia sale to take such an action.
The investment committee’s review typically involves an initial 30-day examination of any transactions that might pose a threat to national security, including a collective assessment from the intelligence community. Should concerns remain, one of the agencies involved can request an additional and more rigorous 45-day investigation.
In the case of the ports deal, the transaction was approved by the investment committee. But the Dubai company later abandoned the deal, agreeing to sell out to an American company after a barrage of criticism by legislators from both parties who said the administration had not adequately reviewed the deal or informed Congress about its implications.
The concerns about possible ties between the owners of Smartmatic and the Chávez government have been well known to United States foreign-policy officials since before the 2004 recall election in which Mr. Chávez, a strong ally of President Fidel Castro of Cuba, won by an official margin of nearly 20 percent.
Opposition leaders asserted that the balloting had been rigged. But a statistical analysis of the distribution of the vote by American experts in electronic voting security showed that the result did not fit the pattern of irregularities that the opposition had claimed.
At the same time, the official audit of the vote by the Venezuelan election authorities was badly flawed, one of the American experts said. “They did it all wrong,” one of the authors of the study, Avi Rubin, a professor of computer science at Johns Hopkins University, said in an interview.
Opposition members of Venezuela’s electoral council had also protested that they were excluded from the bidding process in which Smartmatic and a smaller company, the Bizta Corporation, were selected to replace a $120 million system that had been built by Election Systems and Software of Omaha.
Smartmatic was then a fledgling technology start-up. Its registered address was the Boca Raton, Fla., home of the father of one of the two young Venezuelan engineers who were its principal officers, Antonio Mugica and Alfredo Anzola, and it had a one-room office with a single secretary.
The company claimed to have only two going ventures, small contracts for secure communications software that a Smartmatic spokesman said had a total value of about $2 million.
At that point, Bizta amounted to even less. Company documents, first reported in 2004 by The Herald, showed the firm to be virtually dormant until it received the $200,000 investment from a fund controlled by the Venezuelan Finance Ministry, which took a 28 percent stake in return.
Weeks before Bizta and Smartmatic won the referendum contract, the government also placed a senior official of the Science Ministry, Omar Montilla, on Bizta’s board, alongside Mr. Mugica and Mr. Anzola. Mr. Montilla, The Herald reported, had acted as an adviser to Mr. Chávez on elections technology.
More recent corporate documents show that before and after Smartmatic’s purchase of Sequoia from a British-owned firm, the company was reorganized in an array of holding companies based in Delaware (Smartmatic International), the Netherlands (Smartmatic International Holding, B.V.), and Curaçao (Smartmatic International Group, N.V.). The firm’s ownership was further shielded in two Curaçao trusts.
Mr. Stoller, the Smartmatic spokesman, said that the reorganization was done simply to help expand the company’s international operations, and that it had not tried to hide its ownership, which he said was more than 75 percent in the hands of Mr. Mugica and his family.
“No foreign government or entity, including Venezuela, has ever held any stake in Smartmatic,” Mr. Stoller said. “Smartmatic has always been a privately held company, and despite that, we’ve been fully transparent about the ownership of the corporation.”
Mr. Stoller emphasized that Bizta was a separate company and said the shares the Venezuelan government received in it were “the guarantee for a loan.”
Mr. Stoller also described concerns about the security of Sequoia’s electronic systems as unfounded, given their certification by federal and state election agencies.
But after a municipal primary election in Chicago in March, Sequoia voting machines were blamed for a series of delays and irregularities. Smartmatic’s new president, Jack A. Blaine, acknowledged in a public hearing that Smartmatic workers had been flown up from Venezuela to help with the vote.
Some problems with the election were later blamed on a software component, which transmits the voting results to a central computer, that was developed in Venezuela.
Simon Romero contributed reporting from Caracas, Venezuela.

HERALD: U.S. digs for vote-machine links to Hugo Chávez

2006-10-28T21:05:00.000-07:00

Posted on Sat, Oct. 28, 2006
U.S. digs for vote-machine links to Hugo Chávez

BY ALFONSO CHARDY
achardy@MiamiHerald.com
In the debate about the reliability of electronic voting technology, the South Florida parent company of one of the nation's leading suppliers of touch-screen voting machines is drawing special scrutiny from the U.S. government.
Federal officials are investigating whether Smartmatic, owner of Oakland, Calif.-based Sequoia Voting Systems, is secretly controlled by Venezuelan President Hugo Chávez, according to two people familiar with the probe.
In July, a Treasury Department spokeswoman disclosed that a Treasury-led panel had contacted Smartmatic, and a company representative said his firm was ''in discussions'' with the panel. At the time, those discussions were informal. The government has now upgraded to a formal investigation, the two sources said.
Sequoia's electronic voting machines operate in 17 states. In Florida, the machines are used in four counties: Palm Beach, Indian River, Pinellas and Hillsborough.
Miami-Dade and Broward use other technology.
Concerns about Smartmatic are keen on the eve of the Nov. 7 election, given fears that someone with unauthorized access to the electronic system could create electoral chaos. Some critics believe that if the Venezuelan government is involved, Smartmatic could be a ''Trojan horse'' designed to advance Chavez's anti-American agenda.
However, officials in all four Florida counties using Sequoia said they were satisfied with the machines and were not concerned about allegations of a Chávez connection because company officials told them the Venezuelan government had no stake in the company.
''We are very satisfied,'' said Kathy Adams, spokeswoman for the Palm Beach County supervisor of elections.
The probe stems from a May 4 letter to the Treasury Department by Rep. Carolyn Maloney, D-N.Y., raising concerns about Smartmatic's purchase of Sequoia last year. Maloney said she was disturbed by a 2004 article in The Miami Herald revealing that the Venezuelan government owned 28 percent of Bizta -- a company operated by two of the same people who own Smartmatic. Bizta bought back those shares after the article appeared, and Smartmatic now characterizes the deal as a loan.
Bizta and Smartmatic had partnered with Venezuelan telephone giant CANTV to win a $91 million contract to supply electronic voting machines for Venezuelan elections, including the controversial 2004 referendum Chávez won.
Smartmatic categorically denies any link to the Chávez regime. ''Smartmatic is a privately held corporation, and no foreign government or entity -- including Venezuela -- has ever held an ownership stake in the company,'' Mitch Stoller, a company spokesman, said in an e-mail to The Miami Herald.
Botched municipal elections involving Sequoia machines in Chicago in March added to the suspicions.
When the Chicago City Council grilled Sequoia executive Jack Blaine in April, he revealed that some Venezuelans had provided technical support during the election and that some of the glitches could be traced to a component developed in Venezuela to print and transmit results to a central tabulation computer.
The Chicago Board of Election Commissioners is withholding further payment to Sequoia until after the Nov. 7 election.
Sequoia machines in Florida do not use the component involved in the Chicago problems, however.
The Smartmatic investigation is being conducted by the Treasury-led Committee on Foreign Investment in the United States, CFIUS -- which determines whether deals involving foreign investors compromise national security.
Neither CFIUS nor Smartmatic confirmed the investigation, but they did not dispute it. The two people familiar with the probe asked that their names not be published because they were not authorized to speak about it.
Brookly McLaughlin, a Treasury spokeswoman, said she could not comment. Stoller, the Smartmatic spokesman, said in an e-mail: ``We have been in contact with CFIUS staff and will provide additional information as appropriate and as requested.''
Determining whether there really is a hidden connection to Chávez or anyone in his government is difficult because of Smartmatic's complex, though legal, corporate structure.
Smartmatic's corporate papers, obtained in Curac¸ao by The Miami Herald, reveal a convoluted trail of companies incorporated abroad and operating through dozens of proxy holders -- a structure seemingly designed to cloak the true owners.
The founders and principal owners of Smartmatic are Antonio Mugica and Alfredo Anzola. They are also the founders and owners of Bizta -- the company the Venezuelan government once partly owned.
Though both men come from wealthy families, a decidedly anti-Chávez sector, their reluctance to provide specific details about ownership has continued to fuel suspicions about the company.
Adding to the suspicions was a recent statement from the Venezuela Information Office about Smartmatic, which Chávez critics viewed as corroboration the company is linked to the government in Caracas.
But Eric Wingerter of the Venezuela Information Office in Washington said the ''fact sheet'' was, rather, aimed at rebutting critics' allegations that the Chávez government controls the company.
Ostensibly, the company's umbrella corporation, Smartmatic International Group, is housed inside a bank building on a scenic boulevard in Willemstad's busy Punda financial district. But all the people contacted either at the building or at the addresses of company proxy holders refused to talk to a reporter in Curac¸ao.
However, business records obtained by The Miami Herald in Willemstad's commercial registry provide no evidence of any Venezuelan government official or agency as director, associate, employee or proxy. What the records do show is the circuitous ownership structure with a paper trail leading from Willemstad to Amsterdam to Caracas to Delaware and then to Boca Raton and Oakland, Calif.
Stoller said the arrangement is standard for multinational companies.
But experts in offshore financial services say the Curac¸ao arrangement is largely designed to conceal and protect the true owners and assets of a company.
Cárlos A. Souffront, a partner and expert on offshore jurisdictions at the Miami-based law firm of Tew Cardenas, said companies often choose offshore havens to avoid paying high taxes and disclosing owners' identities or to protect assets and avoid scrutiny and oversight under post-9/11 U.S. regulations.
Stoller said the company is 97 percent owned by the four Venezuelan founders -- two of them dual citizens: Mugica (Spanish and Venezuelan), Anzola, Roger Piñate and Jorge Massa (French and Venezuelan). The remainder of the company, Stoller said, is owned ``by employees of Smartmatic (past and present) and family and acquaintances of the founders.''
Stoller did not identify any of them, and their names are not listed in records obtained by The Miami Herald.
The four top owners have not said whether they support or oppose Chávez.
Curac¸ao records show that Smartmatic International Group has three statutory directors: Piñate and two companies -- Curac¸ao Corporation Co. and Netherlands Antilles Corporation Co.
Piñate was also identified by Sequoia's Blaine as among the Venezuelans who helped deliver technology ''support'' during the glitch-plagued Chicago elections.
Curac¸ao business records also show that the two statutory director companies have 28 ''proxy holders,'' all employees of Curac¸ao International Trust Co.
CITCO is an old Dutch financial services firm based in the building Smartmatic lists as its Curac¸ao address. CITCO specializes in financial services for wealthy clients who seek confidentiality.
Smartmatic's Amsterdam address is also CITCO.
Anzola and Mugica, the main founders, are childhood friends. Anzola's father, Alfredo Anzola Mendez, wrote a column for the anti-Chávez Caracas newspaper Tal Cual.

2006-10-28T11:01:00.000-07:00

Texas Herald-Zeitung: Venezuela Controls U.S. Elections

2006-10-25T17:14:00.000-07:00

Who controls U.S. elections?
By R. Edward MooreThe Herald-Zeitung
Published October 20, 2006

Harvard University and Princeton University, in a joint study, have found that a hacker, given 30 seconds alone with an electronic voting machine, can plant a virus on that machine.

When the infected machine’s votes are downloaded at the end of the day, the virus infects the main computer and thus determines the election results giving victory to whomever the hacker desires. How? Using a key available over the internet for less than $3 the hacker opens the voting machine up and replaces a chip. The replacement chip has the virus code on it. The code for the virus and how to put it on the chip is available on the internet. It is all simple, low-level computer technology.

But it gets worse.

Why hack when you can control the company that makes and services the machines?

Hugo Chavez in control of electronic voting machines in America? True.

A Venezuelan company called Smartmatic International, parent of Sequoia Voting Systems, now provides electronic voting machines for millions of Americans.

Smartmatic started as a small software company in Caracas, Venezuela during the late 1990s. Despite having no election experience, the small company was awarded a $100 million contract by the Chávez-dominated National Electoral Council to replace Venezuela’s electronic voting machines for the Chavez recall vote. The one Jimmy Carter endorsed.

Smartmatic in America is still owned/controlled by the Venezuelan government through a complicated series of shell corporations.

Exit polls of the Chavez recall election, by New York’s Penn, Schoen & Berland Associates, showed Chávez had been defeated 59 to 41 percent. But when official tallies were announced, the numbers changed to 58-42 in favor of Chávez. Using data from Venezuela's electoral council, mathematicians from MIT and Harvard found suspicious patterns in the machine-by-machine results. Now Smartmatic has set up offices in America and has been selling the same electronic voting machines used in the Venezuelan elections to many states in America.

California, New York and Chicago and 19 other states use Smartmatic machines.In states that use Smartmatic machines, Smartmatic company technicians not only prepare the machines right before the elections, they also tally the final vote. That means Venezuelans will have direct control of the election outcomes in many states in this next election.

“Just as the Dubai ports deal was a priority security issue, any potential foreign influence on our elections system is vital to our national security and deserves at least a look,” said Congresswoman Carolyn B. Maloney.

So what about the national security concerns over a company owned and controlled by an anti-American government having direct control over American election outcomes?

Call your congressman and senator and get things changed now, before it is a long-distance call to Caracas. Call your New Braunfels City councilperson and county commissioner and tell them you don’t want the all-electronic machines — with no paper record — they are going to use here in the next election.

Speak up while you still can.

CHICAGO TRIBUNE: VENEZUELA-DESIGNED SOFTWARE SOURCE OF VOTE GLITCH

2006-10-19T20:31:00.000-07:00

Tribune reports that the Smartmatic-Sequoia Voting Systems HAAT component is responsible for recent election glitches. Software for the HAAT was designed in Venezuela, according to City Hall.

http://www.chicagotribune.com/news/nationworld/chi-0610190125oct19,1,5787819.story
CAMPAIGN COVERAGE '06
Voting glitches feared on Nov. 7
More races, bigger turnout will test new machines

By John McCormick
Tribune staff reporter
October 19, 2006

With the November election just weeks away, Chicago and Cook County officials have yet to fix some of the problems that led to a virtual meltdown of the new electronic voting system used in the spring primary.

Twice as many voters are likely to head for the polls on Nov. 7, where they will face new voting procedures and test the training of election workers who were often baffled by the machinery in March.

The most likely stumbling block for a smooth election remains a small device that is supposed to consolidate totals from two voting systems and transmit the results downtown via cellular technology. In the spring, many judges couldn't get it to work.

And it will still be possible for workers to accidentally fry vote totals if they forget to disconnect the power from ballot scanners before data cartridges are removed at the end of the night."We don't want you to erase any of the memory," warned Gail Weisberg, Cook County's equipment manager coordinator, during a training class last week in Hoffman Estates.

Election officials have boosted training and demanded many fixes to the machinery and software since March, when they were humiliated by confusion and delayed results.

The possible snags are unlikely to throw an election--there are paper backup systems at most every turn--but they could again slow results from some of the nearly 5,000 precincts.

While they suggest major improvements have been made, officials say politicians, voters and the media should never expect the new system to operate as quickly as when paper ballots were used and 90 percent of precincts typically reported results within an hour of polls closing."Will it be better than the primary? Absolutely," said Tom Leach, a spokesman for the Chicago Board of Election Commissioners.

The experience here this year with electronic voting was one of the earliest, and also one of the most troubled. But problems were also seen in Ohio, Maryland and elsewhere.The snafu potential will be even greater in November, when the battle for Congress and other close races hangs in the balance. It is estimated that more than 80 percent of voters nationwide will use electronic voting machines, with a third of all precincts using the technology for the first time.

The changes were required by the federal government after problems in the 2000 presidential election with punch-card ballots and antiquated voting machines in Florida and elsewhere.

To satisfy a new requirement that the visually impaired and others with disabilities be able to vote unassisted, Chicago and Cook County purchased touch screens with audio prompts for each polling place.

Dual system in each precinctBut because those machines were expensive, officials also purchased cheaper optical scan readers for paper ballots, creating a dual system in each precinct.

This dual system, at a cost of more than $50 million, requires hardware and software to blend the vote tallies from both platforms into one result per precinct.

But the system, the first major hardware change here in more than two decades, buckled under the pressure in its debut, when poorly trained election judges failed to properly deal with ballot jams, locked-up computer screens and other issues.

As roughly 25,000 Chicago and suburban Cook election judges are trained, city and county officials are working through the recommendations contained in a 26-page report that deconstructed the primary's problems.

The report, prepared by a Florida-based consulting firm at a cost of more than $90,000, found one of the biggest issues was a device that is designed, among other things, to merge totals from the two voting systems.

The Hybrid, Activator, Accumulator & Transmitter (HAAT) machine was capable of erasing results from data cartridges if it wasn't first turned off before the cartridges were loaded. Large numbers of election judges were also unable to follow a complex series of instructions to get the machine to transmit results.

Mostly operator error"Most of the inability of the HAAT devices to successfully transmit data on election night was due to operator error," the Freeman, Craft, McGregor Group wrote in its report.

Still, as the latest version of the HAAT was approved by the State Board of Elections at an emergency meeting Friday, there was testimony that even those who regularly work with election equipment could not get it to function properly."

I followed the steps and the steps didn't take me to where I needed to be," said Dianne Felts, the state board's director of voting systems and standards.Felts said that in one round of testing, 16 of 19 precincts failed to properly consolidate in the HAAT because there were differing versions of software installed in the machines. "It was easily remedied, but it was another human error," she said.

Felts also encouraged Chicago and Cook County officials to calibrate the touch screen machines once they are set up in the polls because she found some where it was possible to accidentally check one candidate's name when intending to check another.

Election officials say they plan to calibrate the equipment at warehouses before it is shipped and that the machines can be calibrated again at the polls.

The frontline of defense against such equipment problems will be a specially trained group of poll workers. Cook County is calling them "equipment managers," while Chicago will have "polling place administrators."

The specialists will receive about 10 hours of training, triple what typical election judges receive. They will also be paid more: $500 versus $150.

The county is giving the extra training to about 1,600 election judges, one for each polling place. The city, meanwhile, will give the weighty responsibility to roughly 2,100 college students, the only group allowed to apply for the jobs. "We figured they had the time to devote to this," Leach said.

Election judges say they welcome the presence of an on-site technology specialist."I think it will work a little better, if that person is there," said Phyllis Pepper, a South Side resident and election judge since 1996.

Most of the changes since March should go mostly unnoticed by voters, with a couple exceptions.Voters will be asked to shade in an arrow next to a candidate's names instead of marking an "X." In March, too many of the other marks failed to be read by optical scanners.Voters will also receive two ballots, instead of one as in the primary. The second ballot is needed because there are so many judges running for retention.

Preventing scanner jams

Despite the higher volume of ballots, officials promise fewer jams in optical scanners because the ballots will be shipped in cellophane, rather than having perforations for tearing off a tablet, something that created scanner jams in March.Another major improvement is the elimination of doubling up on equipment.

In March, multiple precincts that shared a polling place also shared a HAAT, resulting in a traffic jam at the end of the night.

Cook County Clerk David Orr predicted that "most" of the precinct transmissions would be successful.On election night, California-based Sequoia Voting Systems, the equipment manufacturer, plans to have as many as 75 people here, including the company's president, to help work through any equipment failures or issues that may arise.

The outcome here is important for the company's reputation because the combined Chicago and Cook County contracts are its biggest in the nation.

mccormickj@tribune.com
Copyright © 2006, Chicago Tribune

Smartmatic Sequoia Voting Systems Misuses Brennan Center's Report on Voting Technology

2006-09-25T07:59:00.000-07:00

Sequoia Voting Systems, a manufacturer of electronic voting equipment, has wrongfully used the Brennan Center’s report on voting machines to promote its Direct Record Electronic ('DRE') Voting System. T

he Machinery of Democracy: Usability of Voting Systems is a comprehensive study that calls attention to potential problems with the usability of new electronic voting technology, and provides recommendations to improve the systems.

The Brennan Center does not rate or endorse any voting systems or products. The report, in fact, finds Sequoia’s data incomparable to other electronic voting equipment because of the unique ballot system used only in Nevada. Click here to read The Machinery of Democracy: Usability of Voting Systems.

Here is the original misleading Smartmatic-Sequoia Press Release:

SEQUOIA VOTING SYSTEMS' AVC EDGE RECEIVES BEST RATING IN NEW BRENNAN CENTER REPORT ON USABILITY
FOR IMMEDIATE RELEASE
Michelle M. Shafer, 800.347.4702
mshafer@sequoiavote.com

SEQUOIA VOTING SYSTEMS' AVC EDGE RECEIVES BEST RATING IN NEW BRENNAN CENTER REPORT ON USABILITY

Used in Nevada for 2004 Presidential election, Sequoia's DRE with VVPAT produces lowest residual vote rate of all voting systems

Full-Faced DRE most secure, reliable, accessible and accurate
voting solution for New York

NEW YORK, NY, September 20, 2006 - Sequoia Voting Systems' AVC Edge, a touch screen Direct Record Electronic (DRE) voting system, received the top usability rating of any voting machine in the Brennan Center for Justice at New York University School of Law's recent report. The Center's report compared the residual vote rate (total undervotes and overvotes) of various voting systems. Sequoia's AVC Edge, which was used statewide in Nevada for the 2004 presidential election, produced a residual vote rate of 0.3% - significantly lower than all other comparable systems.
"The Brennan Center report affirms that the AVC Edge has the lowest residual vote rate of any voting system - something Nevadans already knew and New Yorkers and the rest of the country should strongly consider when choosing their voting technology," said Jack Blaine, President of Sequoia Voting Systems.
The Brennan Center report compiled and analyzed data for each major voting system used in the 2004 presidential election. Central-Count Optical Scan systems, (voters mark a paper ballot that is scanned by a computer at a central location) and Precinct Count Optical Scan (voters mark a paper ballot that is scanned at the precinct) produced a residual vote rate of 1.7% and 0.7% respectively.
In addition, Sequoia's touch screen DREs can be used by all voters, including voters with accessibility challenges, meeting the Help America Vote Act (HAVA) Section 301 requirement for the placement of one accessible voting machine in every polling place. As a result, Sequoia's DREs allow all voters to use the same system.
"For the first time, thanks to Sequoia's touch screen DRE, many voters with accessibility challenges can now cast their ballots privately and independently - finally leveling the field and allowing all citizens to vote in an equal manner," added Jack Blaine.
Moreover, for jurisdictions requiring a full-faced ballot, Sequoia has designed the Advantage Plus Touch Screen, its newest DRE.
"In states like New York, where voters have used full-faced ballots for decades, they will surely be more comfortable with full-faced DREs, a proven system that mirrors the lever voting experience. The Advantage Plus Touch Screen has all the features that made the AVC Edge so successful - plus a full-faced ballot to provide voters a seamless transition from their existing system," said Jack Blaine.
In fact, history shows that voters who are accustomed to full-faced ballots may find the switch to full-faced DRE ballots easier and more seamless. For example, in Ocean County, New Jersey, a jurisdiction which shares New York's history of using a full-faced ballot, voters prefer the full-faced DRE system to all other options.
"When we transitioned away from the lever machine, we chose a paper-based ballot system, but after years of using the lever machine, voters found it confusing and difficult to use. Then we switched to the full-faced DRE and it's been smooth sailing for our voters ever since," said Ocean County Clerk Carl W. Block.
In addition, Sequoia will bring more than 1,000 jobs to New York State if selected to provide DRE voting systems. Sequoia's DRE equipment is manufactured in Tioga County (Harvard Manufacturing) and Suffolk County (Jaco Electronics), and 75% of all components included in the manufacture of Sequoia DREs come directly from suppliers throughout New York. In the Empire State since 1892, Sequoia has a long and rich history of providing jobs and top quality service to New Yorkers.

Additional Facts about full-faced DREs

Ø Security: DREs with a voter verified paper trail provide the highest level of security - permitting rapid and thorough audits to verify electronic results.
Ø Stand-alone System: None of Sequoia's DREs are networked or connected to the Internet - making each machine ultra secure.
Ø Multilingual: DREs allow citizens to vote in their primary language (as allowable by law in each jurisdiction), reducing confusion and errors with a simple and easy-to-use ballot.
Ø Tested Technology: With a 20+ year track record, DRE systems are a proven technology for secure, reliable, accessible and accurate elections.

# # # #

About Sequoia Voting Systems (www.sequoiavote.com)
Sequoia Voting Systems is an American company, based in Oakland, California with a 100-year history of providing accurate, reliable, state-of-the-art voting solutions dating back to the nation's first lever-based mechanical voting equipment in the 1890s. Sequoia provides election technology, services and support to state and local governments including precinct-based optical scan ballot readers, high-speed central count optical scan ballot readers, ballot layout and printing services, and full-face and paginating electronic voting equipment with optional printers that produce voter verifiable paper records. The company has hundreds of customers throughout 20 states and the District of Columbia.

Sequoia has been providing electronic voting equipment for twenty-five years and leads the industry with our AVC Advantage full-face push button electronic voting system and the AVC Edge touchscreen system. For more information, please visit www.sequoiavote.com

IBD: Chicago Dems Praised for Probing Smartmatic Chavez Link

2006-09-22T07:47:00.000-07:00

http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=243730519120606&view=1Much

TOO COZY WITH CHAVEZ

FROM INVESTOR'S BUSINESS DAILY

Posted 9/21/2006

Politics: It's good to see Democrats put country above politics, as many did in repudiating Hugo Chavez's lunatic attacks on our president. But too many are still in the thug's debt and must dissociate with more than words.

That's important because Chavez's crazed speeches this week, declaring President Bush "the devil," leave the scent of political blood in the water for plenty of Democrats.They know their own anti-Bush ravings could come back to haunt them on Nov. 7, given the enormous wave of public revulsion at Chavez's words in the U.S.

After all, potential GOP TV ads featuring Democrats' own attacks on Bush, back to back with Chavez's words, as the Felipe Calderon team did in Mexico's election, could ensure that Democrats pay a high political price for their past words.

Thus, Rep. Charles Rangel, D-N.Y., made a politically savvy but still commendable defense of the U.S. in response to Chavez's attack: "Don't come to my country and attack my president."

But Democrats who've been cozying up to the Venezuelan dictator in the past few years are the ones who deserve the spotlight.They have, like Rep. Bill Delahunt, D-Mass., Sen. Lincoln Chafee, R-R.I., and Sen. Bill Nelson, D-Fla., gone on junkets to Venezuela to admire Chavez's "revolution" in his dog and pony shows.

Worse, they've willingly gotten themselves into Chavez's political debt by accepting subsidized heating oil for their supposedly underserved residents. Rangel had nothing but praise for Chavez in February upon taking low-cost heating oil for his Harlem district.But none have been as involved with Chavez as Delahunt, who brokered Chavez's cheap-oil program. He called Chavez's attack "silly," but then told the Boston Globe it was all Bush's fault.

Rep. Jose Serrano, D-N.Y., Sen. Jack Reed, D-R.I., and Rep. Ed Markey, D-Mass., all helped with deals for 40 million gallons of cheap oil via Venezuelan-owned Citgo, which claims to have "helped 181,000" households. It now says it will double that.Disturbingly, the U.S. Energy Department's Sam Bodman dismissed this Chavez oil program as "corporate philanthropy."

It doesn't look like that when we see these same friends-of-Chavez congressmen vote against every single offshore drilling bill and proposed natural gas pipeline when those bills come up in Congress. Chavez desperately wants high oil prices, and to see pro-Chavez congressmen voting against bills that would cut energy prices not just for the poor but for everyone is, frankly, suspicious.

These actions contrast sharply with those of Chicago Democrats who told Chavez to beat it with his offer of $4 million in cheap transport fuel, and then started probing Chavez's bid to penetrate their city's electoral apparatus through voting machine contracts.

For Chavez, it's obvious that Congress' cheap-oil Democrats will accept political favors from literally anyone — even a foreign dictator — which certainly puffs up his sense of power. That emboldens him to step up aggressive actions against the U.S., like his recent alliance with nuclear wannabe Iran and his purchase of advanced jet fighters from Russia that menace us directly. The Venezuelan dictator vows to drive oil prices as high as $100 a barrel if the U.S. takes action against Iran. That cheap oil game isn't about helping the poor — just some very gullible Democrats.

New York Observer: Lou Dobbs Praises Maloney on Smartmatic - Sequoia Venezuela Warning

2006-07-26T13:13:00.000-07:00

Dobbs Likes Maloney
Grumpy Lou Dobbs dislikes plenty of people, but apparently Carolyn Maloney isn't one of them. A Maloney aide brought to our attention the following exchange on Dobbs' CNN program Tuesday night about the use of Venezuelan-produced Smartmatic voting machines in American elections. (Maloney has urged caution about the machines and pressed the issue in Congress.)
Lou Dobbs: ...I think we have to give just extraordinary credit to Congresswoman Carolyn Maloney. She focused on this issue, she brought it to the attention of the public, and our hats are off to her. She's just doing a wonderful job here.
Kitty Pilgrim: She's been very vigilant, and until this came to light publicly, there was really no -- absolutely no acknowledgment that there was a problem with this.
Lou Dobbs: It is nice to see our elected officials, when it does... rarely happen, doing their job, and again, our compliments and commendation to Congresswoman Maloney.
--Jason Horowitz

Financial Times: Smartmatic-Sequoia Venezuela Deal Stirs CFIUS Interest

2006-07-23T21:23:00.000-07:00

Venezuela deal in US stirs Cfius interest
By Stephanie Kirchgaessner in New York
Financial Times
The takeover last year of a California-based voting machine company by a group with ties to Venezuela has caught the attention of the Treasury-chaired committee that investigates deals on national security grounds.
The revelation that the committee on foreign investment, or Cfius, has shown interest in the deal – and could initiate a retroactive review – underscores how dramatically the vetting process for foreign takeovers has changed following the furore earlier this year over the approval by the Bush administration of the sale of five US port terminals to a Dubai-controlled company.
The Treasury Department said it had made contact with Smartmatic, a private Delaware-incorporated subsidiary of a Dutch company that is controlled by Antonio Mugica, a Venezuelan citizen, but declined to comment on whether Cfius was reviewing the deal.
In the years before the Dubai controversy put Cfius at the centre of a political storm, the panel, comprising 12 government agencies, generally reviewed transactions involving sensitive defence technology. But the uproar over the approval of the Dubai deal, which ultimately scuppered it, has prompted the administration to take a tougher approach, in part because it is fighting off attempts in Congress to give lawmakers more oversight of Cfius.
The Treasury said it had taken steps to get Congress more involved, including notifying congressional committees once investigations of deals are closed, giving the director of national intelligence a greater role, and by giving only "Senate-confirmed officials" the ability to sign off on Cfius cases.
"There have been a number of changes in Cfius. It is a much more difficult regulatory environment than it was six months ago," says David Marchick, an attorney with Covington Burling who handles Cfius cases.
Todd Malan, who heads the Organisation for International Investment, which represents US subsidiaries of foreign companies, said of the Smartmatic takeover of Sequoia, the California-based company, that he could not recall another instance when Cfius had contacted a company after a transaction was complete but that it was sign of a more flexible approach to defining "national security".
"To me, all this adds up to the fact that elected policy- makers should have confidence that things are happening outside the legislative context," Mr Malan said.
The Treasury declined to say what spurred its interest in the Smartmatic deal but it was the subject of a letter to John Snow, then Treasury secretary, last May from New York congresswoman Carolyn Maloney, who has backed a House proposal to tweak the Cfius process.
Smartmatic said there was "absolutely no ownership" by the Venezuelan government and that the deal had no "military, defence or national security applications".
Copyright The Financial Times Ltd. All rights reserved.

URL: http://msnbc.msn.com/id/14001689/

VoteTrustUSA: Federal Committee To Investigate Sequoia-Smartmatic Ownership

2006-07-16T11:49:00.000-07:00

http://www.votetrustusa.org/index.php?option=com_content&task=view&id=1509&Itemid=51

By Warren Stewart, VoteTrustUSA
July 16, 2006
Responding to a request from Rep. Carolyn Maloney (D-NY, pictured at right), the Committee on Foreign Investments in the United States (CFIUS) has opened an investigation into whether the foreign ownership of Sequoia Voting Systems compromises national security. Smartmatic, whose majority owners once had links to the Venzuelan government, acquired Sequoia last year. Earlier this year CFIUS, a 12-agency panel chaired by the Treasury Department, approved a bid by a Dubai company to buy several U.S. port operations, a deal that was subsequently terminated after questions were raised in Congress and in the media.The ranking member of the subcommittee on Domestic and International Monetary Policy, Trade and Technology, which has jurisdiction over CFIUS, Maloney sent a letter on May 4, stating that she wanted to ensure the Smartmatic deal had received federal scrutiny. Maloney was quoted in a recent syndicated article "as you can imagine, having a foreign government investing in or owning a company that supplies voting machines for U.S. elections could raise concerns over the integrity of elections conducted with those machines."In a press release that accompanied her letter to CFIUS Maloney wrote:
Smartmatic was first the subject of controversy in 2004 when the Hugo Chavez-led Venezuelan government selected it to provide the voting machines system for the presidential recall election, even though it would be the company’s first time providing machines for an election. Smartmatic teamed up with a Venezuelan software company, Bitza, which at the time was 28% owned by Chavez’s government. More recently, a Chicago city alderman questioned the possible ties between Sequoia and the Venezuelan government when that company’s machines were used in the March 2006 Chicago primaries.According to the article cited above, Brookly McLaughlin, a CFIUS spokeswoman, said she could not comment on whether the committee cleared the purchase. McLaughlin also declined to confirm or deny whether the committee is investigating Smartmatic's purchase of Sequoia. She said she could only say that CFIUS "has been in contact" with Smartmatic.

Critics chip away at Sequoia's roots: Fears arise because e-voting machine maker's owners are Venezuelan

2006-07-16T11:39:00.000-07:00

Inside Bay Area:

http://www.insidebayarea.com/dailyreview/localnews/ci_3952315

Article Last Updated: 6/18/2006 02:51 AM

By Ian Hoffman, STAFF WRITERInside Bay Area
For three years, the nation's two largest suppliers of voting machinery have driven feverishly for sales and shown the symptoms of overextension — missed deliveries, faulty equipment and breach-of-contract lawsuits.
Until recently, the supplier running a close third, Sequoia Voting Systems, kept a lower profile than competitors Diebold and Election Systems & Software while quietly snapping up sales of voting systems on both coasts, all of Nevada and Louisiana, and Chicago and Cook County, Ill.
With a $13.3 million contract signed Friday by Alameda County, Oakland-based Sequoia arguably became the dominant voting-system maker in California, having signed up more counties than any other company.
But a controversy regarding Sequoia's foreign ownership could upset its quiet, sell-what-you-can service strategy.
Politicians in the Windy City and CNN newsman Lou Dobbs suggested recently that the federal government was derelict in not having investigated Sequoia and its acquisition last year by Smartmatic, a Boca Raton, Fla., firm largely owned by Venezuelan businessmen.
After Chicago and Cook County were plagued with delays this spring in tallying votes for a primary, city alderman Edward Burke suggested Sequoia's voting machines were part of a conspiracy by Venezuelan President Hugo Chavez to manipulate U.S. elections.
"We may have stumbled across what could be (an) international conspiracy to subvert the electoral process in the United States of America," Burke told reporters.
"Tell me a single, solitary reason there is to trace ownership through three shell corporations to the Curacao Islands and its roots to Venezuela, where they have already been involved with the dictator of Venezuela, who Defense Secretary (Donald) Rumsfeld says is an enemy of the United States."
Soon after, editorial writers at Investors Business Daily warned that "we might just get ambushed ... if the Venezuelan government ends up controlling our elections."
In late May, the U.S. Treasury Department requested Sequoia and Smartmatic documents on the transaction, as a potential preliminary to review by the Committee on Foreign Investment in the United States, a process typically reserved for defense firms.
A few days later, CNN's Dobbs opened fire on electronic voting and Sequoia in particular as "an outright threat to our democracy."
Next to a television logo reading "Democracy for Sale," Dobbs said, "We know what we're dealing with, and it is a dysfunctional government that is trying to render our elections precisely the same."
The indignation has taken Sequoia executives by surprise, partly because the company has been foreign-owned for 24 years. The firm's roots go back to 1890.
In the early 1980s, Sequoia was sold to the Irish printing conglomerate Jefferson Smurfit, which sold it to De La Rue, a British banking technology and currency printing house.
Sequoia lost money in 2004, and De La Rue sold it to Smartmatic Co. of Boca Raton for $16 million in cash. Smartmatic in turn is owned by holding companies based in the Netherlands and in Curacao. The lead investors are four founders, led by Antonio Mugica and his father, who have Spanish and Venezuelan citizenship.
Smartmatic was a virtual unknown until 2004, when as part of a consortium it won a $91 million contract to supply voting machines for the recall referendum against Venezuelan President Hugo Chavez. Another firm in the consortium, Bizta, had some of the same investors and had obtained a loan from the Venezuelan government secured by a 28 percent equity stake.
News of the Venezuelan government's stake in Bizta sparked protest, and according to Smartmatic officials, Bizta paid off the loan before the election.
Smartmatic purchased Sequoia a year later, and executives of both companies say neither has ties to the Venezuelan government.
Sequoia executives say the purchase by Smartmatic, another voting company, has been a good fit and brought fresh development money that Sequoia rarely saw under De La Rue.
"It is a wonderful and healthy partnership, and I couldn't be happier," said Howard Cramer, Sequoia's vice president of sales.
The firm employs 150; slightly more than half are in Oakland.
Elections officials in the Chicago area say most of their problems in the March primary sprang from shifting to a new voting system of three electronic components, after decades of voting on punchcards.
Harvard "Larry" Lomax, registrar of voters in Clark County, Nev., has been using Sequoia equipment since 1998. When Sequoia first introduced backup records or paper trails for its touch-screens, Lomax was the first head of elections in a large urban county to try them.
He said the foreign ownership issue is "ridiculous."
"I just think that's political posturing on those people's part," Lomax said. "The product hasn't changed, the reliability hasn't changed. We run the elections. It isn't like someone in Venezuela can decide to do something and just do it."
Given the uproar following China's bid for Unocal and Dubai Ports' aborted management of several Northeast U.S. ports, Sequoia's Cramer listened for a broader outcry.
What he's heard is "zero," he said.
"There is no market interest in this topic," he said. "It's a non sequitur. It's as though it doesn't exist."
Critics of electronic voting say a more relevant matter than ownership is an industry penchant for secrecy and the lack of scrutiny for voting machines.
"You care less about them if the system is patently transparent and you can tell whether it's honest," said Doug Jones, a computer science professor and voting systems examiner in Iowa. "If we had sufficient transparency in our elections systems, the devil himself could build our voting systems and we could still hold honest elections."
Contact Ian Hoffman at ihoffman@angnewspapers.com.

Hugo, you aren't the boss of us

2006-07-16T11:35:00.000-07:00

By Joel Engelhardt
Palm Beach Post Columnist
Tuesday, June 20, 2006
In Chicago, aldermen usually try to avoid hearings into fraud, not lead them. But when the subject is vote-counting, that's another matter.
Alderman Edward Burke didn't like how long it took to count votes - more than two days - after the city's March primaries. He organized hearings and learned that the company that supplied Chicago with its voting machines, Sequoia Voting Systems Inc., is owned by Venezuelans.
"We may have stumbled across what could be (an) international conspiracy to subvert the electoral process in the United States of America," Alderman Burke declared. "I am saying the potential for tampering with the American electoral process where presidential elections can be determined by just one state exists here."
Uh-oh. Venezuelans in charge of America's elections. Venezuela is the nation whose leftist president, Hugo Chávez, keeps thumbing his nose at the Bush administration while playing nice with Fidel Castro. If he's in charge of Sequoia, which doesn't supply equipment just for Chicago's elections but supplies 52,000 touch-screen voting machines throughout the nation - including those in Palm Beach, Indian River, Hillsborough and Pinellas counties - that's something to be concerned about.
Unless Mr. Chávez nationalizes the privately held company, however, he is no more in control of Sequoia than President Bush is in charge of Wendy's.
What raised Alderman Burke's suspicion was the circuitous trail that led to the new owners of the 100-year-old company. Sequoia was acquired in 2005 by Smartmatic Corp., a private company based in Boca Raton but owned by Venezuelan investors through a series of holding companies in Europe and the Caribbean, the Los Angeles Times reported.
"Tell me a single solitary reason there is to trace ownership through three shell corporations to the Curacao Islands and its roots to Venezuela," Alderman Burke said. When a Chicago alderman sees an investment cloaked like that, he normally takes notes, not umbrage. Despite his long tenure on the Chicago City Council - he has served since 1969 - Alderman Burke didn't like this corporate shell game.
Venezuelan ownership explained why Venezuelan technicians could be found in restricted counting areas on election night. Results were delayed primarily by failures in remote reporting. More confusion came about because Chicago, unlike Palm Beach County, wasn't satisfied with a single voting system to replace its now-discredited punch-card ballots. The city known for the Election Day battle cry "Vote early and often," gave voters more than one choice.
As if elections aren't hard enough, the city's 2,604 polling places were outfitted with both touch-screen machines (accompanied by printers to create a paper trail) and optical-scan, fill-in-the-bubble ballots. Voters weren't encouraged by Chicago politicians to cast two votes - one on each system - as far as I know. But poll workers didn't know all the subtleties of the new hardware. Many had nothing more than a poorly written manual to go by. Some had been trained by videotape. Most didn't touch the equipment until Election Day.
Alderman Burke started an investigation. He found a smoking gun linking Sequoia to Hugo Chávez. A software company owned by the new owners, Sequoia admits, took a $150,000 loan from the Venezuelan equivalent of the U.S. Small Business Administration. The loan gave the government a temporary ownership position, but it was repaid within a year. That didn't stop Alderman Burke from reminding Chicagoans that Hugo Chávez has been declared by no less than Defense Secretary Donald Rumsfeld "an enemy of the United States."
It's bad enough to be an election equipment maker these days without being linked to Hugo Chávez. Every complaint about any kind of voting system indicts all. It's not too great a leap to the day that Hugo Chávez is blamed for poor screen illumination at King's Point.
Alderman Burke's outrage is easy to understand. After all, in Chicago, counting votes is a time-honored tradition of the city's politicians. No Chicago alderman worth his salt is going to stand for handing that power off to foreigners.

Find this article at: http://www.palmbeachpost.com/opinion/content/opinion/epaper/2006/06/20/m12a_engelhardtcol_0620.html

Panel scrutinizes Smartmatic's ties to Venezuela

2006-07-14T23:02:00.000-07:00

http://www.kansascity.com/mld/kansascity/news/nation/15042765.htm?template=contentModules/printstory.jsp

July 15, 2006

By Alfonso Chardy
McClatchy Newspapers
(MCT)
A U.S. Treasury-led panel that investigates whether U.S. companies with ties to foreign investors compromise national security has contacted the Boca Raton, Fla., parent company of a voting machine supplier whose top executives once had links to the Venezuelan government.
The company, Smartmatic, last year acquired Sequoia Voting Systems, a well-known supplier of electronic voting equipment in 16 states. Palm Beach and Hillsborough counties are among those that use Sequoia's electronic voting machines. Smartmatic was a partner in a consortium that supplied electronic voting machines used in the controversial referendum President Hugo Chavez won in 2004.
Sequoia has also come under fire in Chicago, where glitches in voting tabulations in a recent election, coupled by the company's admission that its technology support staff is comprised of Venezuelan nationals, raised concern among some city council members who grilled the company's president, Jack Blaine.
"The history of the company that was hired to run this election is no stranger to scandal, not the least of which involves its ties to Venezuela and the claims of its partnership with political corruption in that country," said Alderman Edward Burke at an April 7 Chicago City Council meeting where Blaine was questioned.
Neither Smartmatic nor the Committee on Foreign Investments in the United States, CFIUS, said why Smartmatic had been contacted. But earlier this year Rep. Carolyn Maloney, D-N.Y., asked Treasury whether the committee had cleared Smartmatic's purchase of California-based Sequoia.
Rep. Maloney echoed the concerns of anti-Chavez critics, suggesting in her May 4 letter to Treasury that CFIUS should review the transaction and determine whether the company is a tool of the Chavez government to influence U.S. elections.
"As you can imagine, having a foreign government investing in or owning a company that supplies voting machines for U.S. elections could raise concerns over the integrity of elections conducted with those machines," Maloney wrote.
Mitch Stoller, a Smartmatic spokesman, said the company did not seek CFIUS review of the transaction because it was not considered to have military, defense or national security implications. Before the purchase, Sequoia was already foreign owned. Its prior owner was De La Rue of Britain.
"Smartmatic is an independent company and no foreign government or entity - including Venezuela - has ever held an ownership stake in Smartmatic," Stoller said
Smartmatic's principal executives are from Venezuela, but the Venezuelan government did not invest in the company. Rather, the government invested in Bizta Corp., which provided software used by Smartmatic, The Miami Herald revealed in 2004.
CFIUS, which includes several federal agencies, emerged from obscurity earlier this year when it approved a bid by a Dubai company to buy several U.S. port operations. The public uproar and congressional questioning eventually scuttled the deal.
Maloney, the ranking Democrat on the subcommittee on Domestic and International Monetary Policy, Trade and Technology, which has jurisdiction over CFIUS, said in her letter to Treasury that she wanted to ensure the Smartmatic deal had received federal scrutiny.
"I would have concerns if this transaction was done outside the CFIUS process, a process that was put in place to appropriately examine these types of foreign investment."
CFIUS is a 12-agency panel chaired by Treasury and includes the departments of State, Defense and Homeland Security.
Brookly McLaughlin, a CFIUS spokeswoman, said she could not comment on whether the committee cleared the purchase. McLaughlin also declined to confirm or deny whether the committee is investigating Smartmatic's purchase of Sequoia. She said she could only say that CFIUS "has been in contact" with Smartmatic.
Smartmatic is owned by Smartmatic International Holding B.V. in Amsterdam, Stoller said. Blaine, Sequoia's president, told the Chicago City Council that the Amsterdam outfit is owned by Smartmatic International Group, N.V. of Curacao.
Bizta was owned by the same Venezuelan nationals who control Smartmatic, Antonio Mugica Rivero and Alfredo Anzola Jaumotte, childhood friends and engineering school graduates.
Anzola's father, Alfredo Anzola Mendez, was a prominent opposition member and a columnist in the anti-Chavez Caracas newspaper Tal Cual. "I'm anti-Chavez by conviction," he said in a 2004 interview at his home in an exclusive Caracas neighborhood.
The Venezuelan government's investment in Bizta gave the Caracas government 28 percent ownership of the company. The Venezuelan government agency that made the investment, a venture capital fund, said it had nothing to do with the referendum and that it was a bid to promote a promising small company.
In February 2004, the National Electoral Council in Caracas, awarded Bizta and partners Smartmatic and CANTV, Venezuela's publicly held phone company, a $91 million contract to develop new voting machines. But shortly before the referendum, Bizta announced that it was buying back the Venezuelan government's shares.
---
© 2006, The Miami Herald.

Ballot Firm's Ties to Venezuela Criticized

2006-06-04T08:17:00.000-07:00

http://www.latimes.com/business/la-fi-sequoia3jun03,0,3756305.story?page=2&coll=la-home-business
From the Los Angeles Times

Some American officials worry that Sequoia Voting Systems' foreign link could compromise the integrity of the U.S. election process.
By Marc Lifsher
Times Staff Writer
June 3, 2006
An Oakland company that provides electronic voting machines in California and 19 other states is drawing scrutiny over its acquisition last year by a group of Venezuelan investors with past business ties to the government of President Hugo Chavez.
Voters in 20 California counties Tuesday will use voting machines provided by Sequoia Voting Systems, the country's oldest maker of election equipment.
Sequoia's ownership has barely caused a ripple in California, but it has prompted elected officials in Chicago and New York to raise questions about possible foreign influence in U.S. elections.Rep. Carolyn B. Maloney (D-N.Y.) last month wrote U.S. Treasury Secretary John W. Snow asking whether the Bush administration had weighed the national security implications of "a company with possible ties to the Venezuelan government" selling touch-screen voting machines for U.S. elections.
The concerns echo the resistance that greeted Chinese efforts last year to buy El Segundo-based oil company Unocal Corp. and the more recent failed attempt by a company in Dubai to acquire U.S. port operations.
"Just as the Dubai ports deal was a priority security issue, any potential foreign influence on our elections system is vital to our national security and deserves at least a look," said Maloney, who is concerned that voting machines supplied by Sequoia could be especially vulnerable to fraud because of the company's foreign ownership.
A spokeswoman for the Treasury Department, which evaluates foreign acquisitions of U.S.-based companies, said officials were looking into Maloney's query but declined to comment further.
Sequoia, founded in Jamestown, N.Y., in the late 1890s, was acquired in March 2005 by Smartmatic Corp., a private company owned by Venezuelan investors through a series of holding companies based in Europe and the Caribbean. Sequoia's previous owner was the British firm De La Rue, best known for printing currencies for dozens of foreign governments.
Smartmatic emerged from obscurity the year before when it won a $100-million contract to supply touch-screen voting machines for an ultimately unsuccessful recall effort against Chavez in 2004.
Before the election, Smartmatic was part of a consortium that included a software company partly owned by a Venezuelan government agency.
Jack Blaine, president of Sequoia and Smartmatic, said his companies had no current ties to the Venezuelan government.
"Whether in the U.S. or Venezuela, the world of politics can be a breeding ground for unfounded conspiracy theories, and in such an environment, the facts about our company and its proven voting solutions can easily become lost," he said. International observers found no evidence of voter fraud in the recall election.
In the last several years, Sequoia has signed contracts to provide electronic voting equipment to more than a third of California's 58 counties — including Riverside and San Bernardino but not Los Angeles — and 245 other local governments across the country. The company markets optical scanners, which electronically tabulate ballots marked by voters, and touch-screen machines, on which votes are recorded using technology similar to that found in automated teller machines.
Concerns about Smartmatic's offshore ownership are fueling broader worries that computerized voting systems are vulnerable to hackers and political manipulation.
"Anything that further erodes the public's confidence in the integrity of our system of counting votes is troublesome," said Rich Hasen, a specialist in voting law at Loyola Law School in Los Angeles.
The situation isn't helped by the current strained relations between the United States and Chavez, who refers to President Bush as "Mr. Dangerous" and is a key figure in the growing leftist challenge to U.S. influence in Latin America.
Indeed, the Bush administration has shown some interest in Sequoia's ownership. Latin America experts at the State Department asked Richard Brand, a former reporter who covered the Chavez recall election, to brief them last month about Sequoia's role in the balloting, Brand said. A State Department spokesman declined to comment.
Chicago Alderman Edward Burke cited Sequoia's Venezuelan ownership in his complaint about the company's performance during March primary elections in his city and surrounding Cook County. Problems with merging results from two new types of voting machines supplied by Sequoia led to a days-long delay in posting final results.
Burke, who chaired an investigation into the incident, said he was bothered by reports that Venezuelan technicians and engineers "were in the Chicago tabulating rooms counting votes" on election night. Sequoia President Blaine said the Venezuelans were providing assistance to local election officials unfamiliar with the new voting machines.
Burke contends that Sequoia's complex ownership "is designed to make it difficult to learn who the real controlling interests are.
"Sequoia's parent company, Boca Raton, Fla.-based Smartmatic, is controlled by Smartmatic International Holdings of Amsterdam. The holding company is owned by Smartmatic International Group of Curacao in the Dutch Antilles, a string of Caribbean islands near the Venezuelan coast.
Antonio Mujica, a citizen of Venezuela and Spain who lives in Caracas, Venezuela, founded the parent company in 2000 and, along with his family, owns a 75% stake.
The company's Venezuelan owners made "extra efforts to make it appear that Smartmatic is purely a [U.S.] company," said Lowell Finley, co-director of Voter Action, an electronic voting watchdog group in Berkeley.
According to corporate filings, Smartmatic listed its principal officers, all Venezuelans, as living at one Boca Raton address "when there's been direct confirmation that they live and work the vast majority of the time in Caracas," Finley said.
Blaine said his companies had "always been open" about their ownership. He said the corporate structure was based on that of other offshore holding companies such as Royal Dutch Shell and "many other leading businesses with significant international operations."
Stories about Smartmatic's connections to the Venezuelan government emerged just a few months after Omaha, Neb.-based Election Systems & Software Inc. failed to win a contract to refurbish 6,000 voting machines it had sold to a pre-Chavez government in Caracas.
John Groh, Election Systems international president, said he was bedeviled throughout the lengthy negotiations by questions from Chavez administration officials about rumors that his company had links to the CIA.
California election officials who use Sequoia's voting machines said they were not concerned about the company's background. They said they were confident that federal and state technical certification processes would find software security glitches before they became problems or threatened election results.
Riverside was the first county in the nation to switch to all-touch-screen voting when it deployed Sequoia terminals for the November 2000 presidential election, Registrar of Voters Barbara Dunmore said.
"Since then," she added, "we've had 36 successful elections."Jesse Durazo, the Santa Clara County registrar of voters, also said he didn't have a problem with Sequoia's equipment or its owners.
Sequoia "was owned by a British firm and is now owned by a Venezuelan firm," he said, "but on our level it's transparent."

VoteTrustUSA Calls For Inquiry into Sequoia-Smartmatic Ownership

2006-06-01T20:13:00.000-07:00

www.votetrustusa.com

By VoteTrustUSA
May 31, 2006

Election Watchdog Group backs Congressional call for Inquiry into Voting Machine Company’s Foreign Ownership

Third Largest Voting Machine Producer may be tied to Venezuelan Government; Citizens’ Group, Congresswoman call for inquiry Citing national security concerns, the non-profit public integrity group

VoteTrustUSA.org voiced support for Congresswoman Carolyn Maloney’s call to investigate the ownership of Sequoia Voting Systems. A leading producer of computerized voting systems used in the U.S., Sequoia was purchased by the Venezuelan-owned Smartmatic International last year. In 2004, Smartmatic partnered with Bizta, a company owned partially by the Venezuelan Government of Hugo Chavez.
In the March Chicago primary, over a dozen Venezuelan nationals were present in the tabulation room, to ‘support’ the computation of the results according to testimony of Jack Blaine, Smartmatic President and CEO at a recent Chicago City Council hearing.
“Control of our election system must be considered a national security issue. The American voter deserves to know who is programming the software that will count their votes,” said Joan Krawitz, Executive Director of VoteTrustUSA.org.
“The manufacturers of e-voting systems claim the software code as their ‘proprietary intellectual property’, preventing any independent examination. It is intolerable that a foreign-owned company with possible ties to a foreign government should be able to purchase that kind of power over our electoral system without any government oversight or investigation.”
“Just as the Dubai ports deal was a priority security issue, any potential foreign influence on our elections system is vital to our national security and deserves at least a look,” said Congresswoman Maloney. “It doesn’t seem that the deal for Sequoia was vetted by our government, and I want to know why.”
Representative Maloney has questioned whether the sale of Sequoia to Smartmatic was reviewed by the Department of Treasury or vetted in the Committee on Foreign Investments in the United States (CFIUS) process.

SMARTMATIC-SEQUOIA VOTING LOSES CONTRACT DUE TO VENEZUELA TIES?

2006-05-11T00:03:00.000-07:00

Waukesha County split on voting firm
Equipment vendor owned by citizen of Venezuela

http://www.jsonline.com/story/index.aspx?id=422768

By SCOTT WILLIAMS

swilliams@journalsentinel.com
Posted: May 11, 2006
Elections in Waukesha County could become more cumbersome and costly because of disagreement emerging from a $600,000 effort to make voting easier for people with disabilities, officials have suggested.
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The fear is based partly on concerns among some local officials that an equipment vendor, approved by the state and recommended by the county clerk, is owned by an individual from Venezuela.
Officials in Menomonee Falls and Mukwonago are among those considering breaking ranks with the rest of the county to steer clear of products made by Sequoia Voting Systems, based in Oakland, Calif. Sequoia spokeswoman Michelle Shafer said the firm's parent company, Smartmatic Corp., is owned by a citizen of Venezuela, a South American nation whose leftist president is allied with Cuban dictator Fidel Castro.
Shafer said the Venezuelan government, led by controversial President Hugo Chavez, has no role in the company, but the ownership question has dogged the company elsewhere in recent months.
"We've addressed these questions before," she said. "There's a lot of misinformation."
Wisconsin state election officials say Sequoia passed rigorous federal screening before being certified by the state as one of four vendors qualified to supply new equipment for voters with disabilities. Under federal law, the technology offering touch-screen ballots and other options must be available in all polling places by September.
Mukwonago Village President James Wagner called it "an oxymoron" to purchase equipment for democratic elections from a company associated with a communist-leaning country.
"That just kind of seems a little strange," Wagner said.
Mukwonago village trustees will consider the issue soon, after a recent decision in Menomonee Falls to authorize purchase of voting machines from a Sequoia competitor. Menomonee Falls Trustee Jim Jeskewitz said concerns about the vendor's Venezuelan ownership were raised by the village clerk, along with other questions about Sequoia's track record and costs.
"It just doesn't seem to fit," Jeskewitz said.
Other vendors certified by the state include Election Systems & Software of Omaha, Neb., Diebold Election Systems of Allen, Texas, and Vote-PAD Inc. of Port Ludlow, Wash.
Each municipality is getting federal funding to equip polling places for disabled voters. Under the Help America Vote Act, the funding is equal to $6,000 per polling place, which totals $600,000 in Waukesha County.
Kyle Richmond, spokesman for the State Elections Board, said the state would not get involved in "political questions" about Sequoia, noting that officials have heard some concerns from within Waukesha County.
Richmond said state officials believe an individual county will function best if all municipalities purchase the same type of machines.
Administering elections could become difficult and expensive if different technologies are in place, he said.
Waukesha County Clerk Kathy Nickolaus said her office called together municipal clerks to examine and discuss the different technologies.
Out of 35 cities, towns and villages in the county, 29 agreed to go with Sequoia, she said.
"We could stay as one," she said. "That was the whole intent."

SMARTMATIC DRAWS CONGRESSIONAL INQUIRY FOR VENEZUELA LINKS

2006-05-09T14:26:00.000-07:00

http://www.miami.com/mld/miamiherald/news/state/14532912.htm?template=contentModules/printstory.jsp

Posted on Tue, May. 09, 2006
Voting machine sale in questionA Boca Raton company's purchase of a supplier of voting machines worried some because of the companies' past ties with Venezuela's government.
BY PABLO BACHELET
pbachelet@MiamiHerald.com
WASHINGTON - A member of Congress has asked the Bush administration if it reviewed the purchase of a U.S. supplier of voting equipment by a Boca Raton company that once had controversial connections to the Venezuelan government.
Rep. Carolyn Maloney, a New York Democrat, wrote to Treasury Secretary John Snow, asking whether the Committee on Foreign Investments in the United States (CFIUS) had cleared last year's purchase of the California-based Sequoia Voting Systems by the Smartmatic Corp.
The transaction drew little scrutiny until Sequoia-supplied equipment for a March 21 election in Chicago was marred by technical glitches and delays. One local official suggested Venezuela was trying to infiltrate the U.S. electoral system.
The Smartmatic machines have been controversial in Venezuela, where they were first used in a 2004 recall referendum handily won by leftist President Hugo Chávez. The opposition cried fraud, but several independent checks of the results turned up no evidence of manipulation.
''As you can imagine, having a foreign government investing in or owning a company that supplies voting machines for U.S. elections could raise concerns over the integrity of elections conducted with those machines,'' Maloney said in the letter.
Michelle Shafer, a Sequoia-Smartmatic spokeswoman, said the Venezuelan government no longer has an investment in the company and that the CFIUS review was unnecessary. Maloney is a ranking member on the subcommittee on Domestic and International Monetary Policy, Trade and Technology, which has jurisdiction over CFIUS, the U.S. government entity that can probe foreign purchases.
Smartmatic purchased Sequoia in March last year. Smartmatic's controlling shareholder and CEO, Antonio Mugica, is a dual Venezuelan-Spanish national. He and another partner, Alfredo Anzola, also control Bizta, which received a $150,000 investment from the Venezuelan government in return for a 28 percent stake in the software company. The government sold its stake before the recall referendum, and after the Miami Herald reported the investment, which sparked complaints that the Chávez government had a stake in the machines that were to count the votes for and against him.

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

2006-04-30T12:54:00.000-07:00

This piece is from the pro-Chavez website www.vheadline.com.

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.

SMARTMATIC ON THE DEFENSE: CHICAGO TRIBUNE

2006-04-28T08:57:00.000-07:00

http://www.chicagotribune.com/news/local/northwest/chi-0604270319apr27,1,1287757.story?coll=chi-newslocalnorthwest-hed

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

mccormickj@tribune.com

Copyright © 2006, Chicago Tribune

America...Will This Be Us Soon?

2006-04-22T16:56:00.000-07:00

Hat Tip to:
www.vcrisis.com

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.

Links to Anonymous Pro-Smartmatic Blogs

2006-04-12T18:19:00.000-07:00

We'll keep watching for new ones...

http://voterawareness.livejournal.com/

http://smartmatic.blogster.com/e-voting_smartmatic.html

http://smartmatic.myblog.com/

http://evote-smartmatic.blogspot.com/

http://smartmatic-eyes.blogspot.com/

http://smartmatic.blogspot.com/

Yet Another Smartmatic Blog Appears

2006-04-12T17:50:00.000-07:00

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:

http://voterawareness.livejournal.com/

Another Smartmatic Blog Appears From the Ether

2006-04-07T20:16:00.000-07:00

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:

http://smartmatic.blogster.com/e-voting_smartmatic.html

New Smartmatic Blogs Appear Out of Nowhere

2006-04-06T16:08:00.000-07:00

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:

http://smartmatic.myblog.com/

http://evote-smartmatic.blogspot.com/

http://smartmatic-eyes.blogspot.com/

http://smartmatic.blogspot.com/

Nothing Good Can Come of This

2006-04-06T15:11:00.000-07:00

From The Miami Herald:

http://www.miami.com/mld/miamiherald/news/opinion/14194451.htm

ELECTRONIC VOTING
Forget Dubai -- worry about Smartmatic instead
BY RICHARD BRAND
rmb381@nyu.edu
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.