Alfonso Chardy, Writer for The Miami Herald, reported in his article “U.S. Digs For Vote-Machine Links To Hugo Chavez,” in The Miami Herald on Saturday, Oct. 28, 2006:
“Federal officials are investigating whether Smartmatic, owner of Oakland, California-based Sequoia Voting Systems, is secretly controlled by Venezuelan President Hugo Chavez, according to two people familiar with the probe…
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 Chavez won. Smartmatic categorically denies any link to the Chavez regime.
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, by they did not dispute it…
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.”
Oct. 28, 2006 Alfonso Chardy
Tim Golden, Investigative Reporter for The New York Times, explained in his Sunday, Oct. 29, 2006 article “U.S. Investigates Voting Machines’ Venezuela Ties”:
“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 Chavez… The inquiry on the eve of the midterm election 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…
Officials of both Smartmatic and the Venezuelan government strongly denied yesterday that President Chavez’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 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. Chavez as president in August 2004… Its registered address was the Boca Raton, Florida, home of the father of one of the two you Venezuelan engineers who were its prinicipal officers, Antonio Mugica and Alfredo Anzola…
At that point, Bizta [a separate company that partnered with Smartmatic for the Venezuela election and is also owned by Mugica and Anzola] 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. Chavez on elections technology…
‘No foreign government or entity, including Venezuela, has ever held any stake in Smartmatic,’ Smartmatic spokesman 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.”
Oct. 29, 2006 Tim Golden
Sequoia Voting Systems put out a press release on Sunday, Oct. 29, 2006 titled “Smartmatic and Sequoia Voting Systems Announce Voluntary CFIUS Filing,” to clarify the investigation of their parent company, Smartmatic:
“Sequoia Voting Systems, Inc. (“Sequoia”) and its parent, the Smartmatic Corporation (“Smartmatic”), today announced that, contrary to reports, the companies have voluntarily submitted a notice to the U.S. Committee on Foreign Investment in the United States (CFIUS). The companies have filed voluntarily in order to allow the U.S. Government to review Smartmatic’s acquisition of Sequoia.
‘No foreign government or entity – including Venezuela – has ever held an ownership stake in Smartmatic, and we have voluntarily filed with CFIUS to put to rest the baseless but persistent rumors about our ownership,’ said Antonio Mugica, Chief Executive Officer, Smartmatic…
As part of the CFIUS process, Smartmatic and Sequoia have voluntarily provided significant information to CFIUS on all aspects of the two firms’ businesses and ownership and the security and integrity of Sequoia’s voting solutions.
‘As a company, we sought out a CFIUS review because we are confident it will clear the air so we can focus on what we do best – making the world’s most secure and auditable voting solutions,’ added Antonio Mugica.”
Oct. 29, 2006 Sequoia Voting Systems
U.S. Representative Carolyn Maloney (D-NY), who was the first person to ask the U.S. government to review Smartmatic’s acquisition of Sequoia Voting Systems, offered her thoughts on the investigation in her press release “Smartmatic Announces It Is Undergoing CFIUS Review” from Monday, Oct. 30, 2006:
“Smartmatic, the company that bought major electronic voting machine maker Sequoia Voting Systems last year, stated publicly yesterday in a press report and today at a press conference that it is voluntarily undergoing a review by the Committee on Foreign Investment in the United States. Rep. Carolyn Maloney (NY-14), who wrote the Department of the Treasury in May to ask if CFIUS had reviewed the Smartmatic deal to buy Sequoia, today expressed satisfaction about the reported CFIUS review.
‘Smartmatic says that it is undergoing a CFIUS review, and I am glad it is happening,’ said Maloney. ‘I am glad that our government will get the answers to any questions about this sale. This helps maintain confidence in our electoral system, and I hope Americans will go to the polls and vote on November 7.’
‘As the ranking member of the subcommittee with jurisdiction over CFIUS, it has been clear to me that national security issues under CFIUS’s umbrella should absolutely include deals involving our electoral system. What could be more fundamental to our democracy and the stability of our country? I will continue to push for the scope of national security issues considered by CFIUS to include cases such as this. I will also continue to push for a strengthening of the CFIUS process, which Congress needs to complete before it adjourns.’”
Oct. 30, 2006 Carolyn Maloney
- Is It Appropriate for Private Electronic Voting Machine Manufacturers to Facilitate Public Elections?
- Could Electronic Voting Machine Software Be Programmed to Alter the Outcome of an Election?
- What Are the Stages of Testing Electronic Voting Machines?