Tuesday, March 9, 2010

Another Update on the Diebold Menace from Garland Favorito

This Guy never Quits,

We just got the latest missive from the fine folks over at Voter Georgia on the ongoing saga of the Diebold mess we got from Cathy Cox, you remember, the mess that Karen Handel said she'd fix but never did. It turns out that the DoJ has now decided that the deal between ES&S and Diebold/Premier is a no go. Looks like there were some concerns about one firm selling voting machines controlling 70% of the US voting machine market, not to mention the well documented problems the Diebold equipment has in just counting your freakin' vote.

Here's a copy of the email from Garland:

From: Garland Favorito [mailto:garlandf@msn.com]
Sent: Tuesday, March 09, 2010 10:32 AM
Subject: FW: DOJ Anti-trust requires ES&S to sell off Diebold assets from merger

VoterGA Supporters
The U.S. Dept. of Justice has just concluded that ES&S must divest itself of the Premier Elections Systems division that it recently purchased from Diebold. The deal would have allowed a single vendor to count nearly 70% of the votes in America, many of those on unverifiable electronic voting equipment.

The history of these two companies is fascinating in that they used to be the same company run by two brothers, Todd and Bob Urosevich. That company was Omaha based, DataMark Systems which was later renamed American Information Systems. The companies were eventually split with Todd taking control of ES&S while Bob took control of Global Election Systems. Bob sold Global to Diebold, whose CEO was Walden (Wally) O’Dell, just before Georgia signed a contract to purchase the machines. After years of intense national scrutiny and ridicule Diebold recently spun its acquisition off into Premier Election Systems and then sold it to ES&S for about 20% of the original purchase price underneath the Justice Dept radar.

Special thanks to Bev Harris of Black Box Voting who has reported much of hits over the years and who led this charge by filing the initial complaint that led several states to join the effort. Also thanks to Brad Friedman who stayed on top of this and some many other elections issues as well as Susan Somach of the Georgia Voting Rights Coalition who prompted me to send this out within an hour after I got it from Brad. As previously reported by Bev Harris, Georgia’s former Elections Director Kathy Rogers, who went to work for Diebold, was on the protected list as part of the merger agreement.

404 664-4044

By Brad Friedman on 3/8/2010 6:02PM
The Department of Justice's Anti-trust division has determined that the purchase of Premier Election Solutions, Diebold Inc.'s recently renamed e-voting division, by Election Systems & Software, Inc. (ES&S) has resulted in a voting machine monopoly. The DoJ and nine states who have joined in a lawsuit, are suing to require ES&S to divest of the assets gained in the bargain-basement priced purchase of Diebold's e-voting outfit last September.

The merger with Diebold/Premier, their second largest competitor, had given ES&S, a private corporation which had already controlled some 50% of U.S. elections their electronic voting systems, a full 70% control of the votes cast in this country. The acquisition had been opposed by election integrity organizations, Hart Intercivic (a much smaller Austin-based competitor), the New York Times editorial board, U.S. Sen. Chuck Schumer (D-NY) in his capacity as chairman of the Senate Rules Committee and was being investigated by 14 different states along with the DoJ's anti-trust division...

A settlement has been struck, pending approval by a federal judge, between the DOJ, nine states and ES&S requiring that the private company find a DoJ-approved purchaser of the Diebold/Premier assets. Prior to the $5 million sale to ES&S, Diebold had been searching for a buyer for a number of years, even as they faced investigations by the SEC and the DoJ, share-holder class action suits, and a number of legal battles with states and country jurisdictions around the country after voting systems were found to have failed or in violation of federal and state standards. Diebold purchased the election division from Global Election Systems in 2002 for the price of $25 million.

The proposed settlement, signed by the DoJ, ES&S and representatives of state attorney generals in Arizona, Colorado, Florida, Maine, Maryland, Massachusetts, New Mexico, Tennessee and Washington has been posted here [PDF].

An AP report on the potential lawsuit by the DoJ last week noted that "As a privately held company, ES&S issues no financial reports. It didn't tell the Justice Department about the Diebold deal because the transaction wasn't big enough to trigger the federal law that requires the government to be informed of big mergers before they are completed."

The article added that a Congressional Research Service report found the merger had given ES&S "a presence in 90 percent of the states" making it the "sole source" for election systems in "at least 20", given them "a market share three or more times that of its closest competitor".

AP's coverage of today's news can be found here.

The DoJ-ordered unwinding of the merger, however, will do little to ensure the accuracy or ability of citizens to oversee their own elections run on unobservable, easily manipulated, oft-failed electronic voting systems which use secret software made by private corporations to count votes in our public elections.

Just one recent example of the dangers of easily manipulated e-voting systems made by ES&S, Diebold and others, can be found in the current federal trial, now ongoing in Clay County, KY, of six top election officials who are alleged, as we reported last week, to have manipulated election results by flipping votes on ES&S voting machines, without the knowledge of voters, as part of a decades-long election rigging scheme.

UPDATE: The DoJ's announcement of the requirement and proposed settlement: http://www.justice.gov/opa/pr/2010/March/10-at-235.html

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