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Diebold Weighs Strategy for Voting Unit •
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E-Voting on Trial in Columbus, Ohio: The Squire Case
By Victoria Parks and Paddy Shaffer
The Free Press
Tuesday 27 February 2007
The Squire v. Geer case is more than just a mere election challenge lawsuit;
the reliability of electronic voting was on trial last week in a small courtroom
in Franklin County, Ohio. Voting rights activists see the issues before the
court as going to the heart of democracy itself and whether or not election
results obtained through the computerized voting machines can be trusted.
Former Franklin County Judge Carol Squire is contesting the victory of her
opponent, Chris Geer in a challenge that has shed new light on the problems
with e-voting machines.
Franklin County Board of Election's Chief Elections Officer Karen Cotton
told the court that in an audit of the Squire/Geer race she was unable to balance
the audit books, and could not state why. She said multiple staffers of both
parties spent the previous Saturday, a full two months after the initial audit,
conducting a hand recount of some books that were called into question in the
Squire challenge. Cotton conceded that critics claim"our elections are
all whacked up," referring to accusations about election irregularities.
Percy Squire, representing his wife, Judge Squire, noted that the public count
does not balance even after last Saturday's new audit.
In a December 2006, an independent audit conducted by voting rights activists
trained in signature count audits, found that 86% of 206 Franklin County precincts
would not balance with certified results. Most of these were off by significant
margins when comparing poll book data and signatures to machine totals.
The Franklin County Board of Elections (BOE) has no plausible explanation for
these discrepancies other than to say that their error rate is better than most
counties in Ohio. In earlier testimony, Squire questioned the Republican Director
of the Franklin County Board of Elections, Matt Damshroder, who stated that
the BOE has no written policy to protect the poll books and has nothing in writing
that he can show the court. Damshroder further testified that the BOE, in preparation
for this litigation, did go through the books again and claimed they matched
his earlier totals. This seems to contradict Cotton's later statements made
under oath. The county prosecutor objected to Squire's request that Damshroder
count poll books before the court. Damshroder said he would comply with the
court ruling that he count poll books.
Vice President of ES&S Software Development Gary Weber's inability to answer
a simple yes or no question drew audible laughter as Squire restated the same
question before a stumbling witness and bemused Cuyahoga County magistrate Joel
Sacco. Squire pressed the witness regarding upgrades of ES&S software being
used in tandem last November. Squire brought into question whether or not the
vendor's sequential Unity software upgrades as used together, were in fact legally
certified at the time by the State of Ohio as required by law. Weber buckled
under questioning on more than one occasion and contradicted himself to statements
made in earlier deposition, according to attorney Squire.
Electronic elections expert and Harvard Fellow, Dr. Rebecca Mercuri parsed
questions from assistant prosecutor Nick Soulas, carefully answering his technical
questions. She concluded there is "significant evidence that there is no
way to conclude that the vote tally as provided is correct." Mercuri reiterated
that because of the lack of complete data sets, accurate vote totals could not
be assumed. Mercuri referred to numerous "egregious disparities" in
last November's election.
Squire asked "Based on your experience in elections as you testified
earlier in Bush v Gore and in countless other political contests around the
country, can you quantify to what extent you view the issues and problems that
you encountered in this election versus what you've seen elsewhere?"
Mercuri emphatically replied, that "the issues and problems I've
seen in this election far outstrip any of the times and issues that I have seen,
even those in Bush v Gore. In most of these instances there was one problem,
or one set of problems. But in this, it cuts across the methodology used for
the recount, the quantity of ballots that were supposed to have been counted,
that were not counted, the methods by which things were impounded, the lack
of certification of the voting system...it is so broad, it is beyond any type
of experience I have had in it's nature of multiple types of things that
seem to have blatant disregard of the admonitions of the rules and the procedures
that were supposed to have been prescribed, including those things the county
was warned about."
Mercuri also noted that the Board of Elections failed to count 3% of the absentee
ballots. She testified that they only manually recounted 2072 absentee votes
instead of the 2700 as legally required.
Records show many machines ran out of poll tape on Election Day. Independent
auditors found several separated machine poll tape summary reports that were
run more than three weeks after the election, and some were found with torn
ends. This led auditors to question the accuracy of poll tape machine totals
that were matched with a separated summary report. In a deposition, County Prosecutor
Patrick Piccininni alluded to the fact that poll tape may have been "loaded
backwards."
One Election Observer noted that some voting machines ran out of tape but continued
recording votes on Election Day. This fact seems to contradict testimony from
ES&S' account service manager Jerry Amick, who claimed under oath that the
machines are designed to shut down when they run out of poll tape. Records indicate,
that in fact numerous ES&S voting machines continued to operate on Election
Day in Franklin County despite running out of poll tape. Questions persist that
poll tapes may have been installed incorrectly or perhaps tore inside the machines.
In which case, the machine would continue to operate despite not producing a
paper trail. Amick also squarely laid the responsibility with the Secretary
of State for making sure successive upgrades of the company's software are,
in fact, certified for use in Ohio's elections.
In recent months successful hacking demonstrations by Princeton, Johns Hopkins
University, and other independent software experts, have put electronic voting
under public scrutiny and have raised eyebrows among public officials. Consensus
among the experts has not been good for the vendors. Incidents as the electronic
voting debacle in Florida's 13th district - where eighteen thousand votes
were lost in November's midterms - have further chilled voter confidence
in electronic voting. In Montgomery County, 30,000 undervotes were recorded
in the Ohio U.S. Senate race between Sherrod Brown and Mike Dewine.
The implementation of the Help America Vote Act (HAVA) has proliferated this
new voting technology into America's voting booths, creating new challenges
to a system already in doubt, and leaving a dissatisfied and disenfranchised
electorate feeling duped. HAVA is a bill pushed in 2002 by convicted former
Ohio congressman Bob Ney with the assistance of convicted lobbyist Jack Abramoff.
Now, the effects of HAVA are being tested in this case.
The ruling in this case could add to the ES&S woes as HAVA is implemented
nationwide. ES&S has ties to Republican Senator Chuck Hagel. Hagel is a
2008 presidential candidate and a past owner of a predecessor voting machine
company to ES&S. In recent months, the embattled electronic voting vendor
has lost product liability lawsuits in other states as in New Mexico, Indiana
and Illinois, a fact that looms large over this courtroom.
Electronic voting seems more questionable than ever as vendors pass on the
substantial costs of software service contracts to taxpayers in already financially
cash-strapped counties. Electronic voting also appears more vulnerable than
ever at this time of slumping voter confidence. In the final analysis, the integrity
of electronic voting continues to dog this industry - a private industry
that holds so much power over a democratic process meant to be fully transparent
and accountable to the public. The trial reconvenes Wednesday, February 28,
to hear final arguments. Afterwards, Sacco's findings go before a three judge
Appeals Court panel which will decide to accept or reject his recommendations.
All Franklin County judges have been removed from the case to avoid the appearance
of impropriety.
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Diebold Weighs Strategy for Voting Unit
By M.R. Kropko
The Associated Press
Sunday 04 March 2007
Cleveland - Diebold Inc. saw great potential in the modernization of elections
equipment. Now, analysts say, executives may be angling for ways to dump its
e-voting subsidiary that's widely seen as tarnishing the company's reputation.
Though Diebold Election Systems - the company's smallest business segment -
has shown growth and profit, it's faced persistent criticism over the reliability
and security of its touch-screen voting machines. About 150,000 of its touch-screen
or optical scan systems were used in 34 states in last November's election.
The criticism is particularly jarring for a nearly 150-year-old company whose
primary focus has long been safes and automated teller machines.
"This is a company that has built relationships with banks every day of
every year. It pains them greatly to see their brand tarnished by a marginal
operating unit," said Gil Luria, an investment analyst who monitors Diebold
for Wedbush Morgan Securities Inc.
In the calm after the November midterm elections, Tom Swidarski, Diebold's
chief executive officer, told analysts in a conference call that the company
plans to announce its long-term strategy for the elections unit early this year.
Swidarski declined an interview request to shed more light on the voting segment's
future.
But in an annual report filed last week with the Securities and Exchange Commission,
Diebold's discussion of its election systems business pointed out various ongoing
concerns. Diebold acknowledged that complaints about its voting products and
services have hurt relations with government election officials.
Diebold indicated it still is "vulnerable to these types of challenges
because the electronic elections systems industry is emerging." The report
also mentioned inconsistency in the way state and local governments are adapting
to federal requirements for upgrades in voting technology.
Further changes in the voting laws could further hurt business, the filing
said.
Diebold spokesman Mike Jacobsen said that whenever Diebold evaluates one of
its businesses, it looks for growth, profitability and characteristics that
make it a long-term strategic fit.
Jacobsen would not say when the announcement about the subsidiary's future
may come.
"I imagine at this point it's a question of whether have they found a
private equity buyer yet or are they about to announce they are going to look
for one," Luria said. He did not speculate on who that may be.
Diebold headaches have abounded.
Some of its voting machines have been criticized for lacking a voter-verified
paper trail for post-election audits. Last summer, the Open Voting Foundation
issued a report alleging that Diebold touch-screen functions can be changed
with the flip of an internal switch. Activists have found source code online.
And there have also been numerous lawsuits and leaked internal memos.
FTN Midwest Securities analyst Kartik Mehta wonders if a business that has
been a lightning rod for criticism is worth it. He said Diebold leaders need
to decide "if that negative publicity is hurting them in selling products
to financial institutions, security products to government or any of their other
customers."
North Canton, Ohio-based Diebold jumped into e-voting in 2002, when it acquired
Global Election Systems. It had some prior experiences with electronic voting
through its Procomp business in Brazil.
The elections business was good for 8 percent of Diebold revenue and about
12 percent of profit last year, but some of that is from Diebold's voting and
lottery contracts in Brazil.
By comparison, the ATM segment produced about 65 percent of the company's revenue
and 63 percent of profit in 2006. Safes have evolved into Diebold's second biggest
segment, now called "security solutions." It makes various devices
and systems for business and government security. Last year it gave Diebold
about 27 percent of its revenue and 25 percent of its profit.
If profit is the key measure for Diebold, the voting business would seem to
be a good fit. But for this segment, a 2006 gross profit (before taxes, costs
and expenses) on products and service of about $83.5 million isn't the whole
story.
"I've been surprised that Diebold has stayed in the voting business for
this long, considering the size of the company and the other sources of revenue,"
said Avi Rubin, a computer scientist at Johns Hopkins University and a frequent
foe of Diebold voting systems' programming. Rubin is director of ACCURATE, an
e-voting research organization funded by the National Science Foundation.
Diebold has always defended its voting machines and its own intentions, even
after its former chairman and chief executive, Wally O'Dell, sought with little
success to convince critics his strong ties with Republican politics as a fundraiser
for George W. Bush were not the motive for the company's involvement in elections.
O'Dell resigned in 2005 and was replaced by Swidarski, who had been the company's
president and chief operating officer. His main focus has been on expanding
international business for ATMs, a less public business.
Critics remained. About the time of the November elections, HBO aired a scathing
documentary entitled "Hacking Democracy" that again raised questions
about the security of Diebold machines.
Might Diebold choose to keep the voting business and grow it?
"It's a possibility, but I'd assign it a very low probability," Luria
said.
Voting machine makers such as Diebold; Election Systems & Software, of
Omaha, Neb.; Sequoia Voting Systems, of Oakland, Calif., and Hart InterCivic,
of Austin, Texas have had the federal Help America Vote Act of 2002 as a sales
catalyst. HAVA, with $3.9 billion of funding, urged the nation to move past
punch card voting and hanging chads that delayed the conclusion of the 2000
presidential election.
ES&S, Sequoia and Hart InterCivic declined comment on a possible Diebold
Election Systems sale.
Douglas E. Rodgers, managing partner and chief executive officer of Washington-based
investment banking firm FOCUS Enterprises Inc., said he has worked with Diebold
executives on recent acquisitions. He could not comment on Diebold's intentions
for voting systems.
Kimball Brace, who closely tracks voting system vendors as president of Washington-based
Election Data Services Inc., said there is uncertainty now in the elections
market, a result of possible legislation setting new requirements with no promise
there will be additional funding.
He couldn't say what Diebold will do.
"If I were in these guy's shoes, I'd be looking close and hard at what
I'm doing in this marketplace," Brace said. "But given the uncertainty,
who would buy it?"
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