Voting Machine CEO Reportedly Lies About Foreign Ownership of Firm

By Brad Friedman, Brad Blog. Posted May 21, 2008.

The CEO and President of one of America's largest voting machine companies, Sequoia Voting Systems, gave both deceptive, and carefully selective answers in his reply to a letter sent earlier this year from two high-ranking officials in Chicago, according to documents recently obtained during an ongoing investigation by the Brad Blog.

Sequoia's chief executive, Jack Blaine, repeated knowingly false answers, at least three different times, in his January 18 response to Chicago Alderman Edward M. Burke and the Chair of Chicago's Board of Election Commissioners Langdon D. Neal. The pair had written to the company on January 11, expressing concerns about the truth behind Sequoia's claims that they had completely divested from their purportedly "former" parent company, Smartmatic, the Venezuelan-run firm with direct ties to Hugo Chavez and his government.

Last year, as media reports revealed the true extent of Smartmatic's shadowy foreign ownership -- and with it, the direct control of some 20% of U.S. elections -- the firm came under close scrutiny by federal investigators from Treasury Department, the FBI and the IRS. In November of last year, Sequoia announced that it had "completely" divested from Smartmatic in a management team-led buyout, thus ending an official review by Treasury's Committee on Foreign Investment in the United States (CFIUS).

But in January, the officials from the Windy City -- where Sequoia holds one of the company's most lucrative contracts -- had continuing concerns about whether the sale was legitimate, or simply a dodge to avoid scrutiny by federal investigators. They were right to be concerned.

In their letter, Burke and Neale requested written responses from Sequoia after what was described as "evasive" and "troublesome" sworn testimony from Blaine the previous year, following "malfunctions of Sequoia voting machines during primary elections held on March 21, 2006."

In his testimony before a Chicago City Council joint committee in April of 2006, Blaine had claimed he didn't know the specific details of the financial arrangement that existed between Sequoia Voting Systems, Inc. and the Smartmatic Corporation, despite being president of both companies at the time. He did, however, manage to admit to the joint committee that at least 15 Venezuelan nationals were flown in to assist in the tabulation of votes in the troubled March '06 election and that the Venezuelans had access to Sequoia's source code. Blaine also conceded that it was "possible" that Chavez' government could hold an interest in the company, but that he wasn't certain because the ownership of Smartmatic was concealed in an off-shore trust.

In their series of follow-up questions to Blaine in January 2008, Alderman Burke noted that "the entire Smartmatic episode has served as a reminder of how important it is to know and trust who is counting the votes in our elections."

"It is therefore important," he continued, "to confirm that the sale of Sequoia by Smartmatic is not a sham transaction designed to fool regulators and to further confirm that Smartmatic and the government of Venezuela have no ability to influence or control the new owners of Sequoia."

Blaine's written responses to the officials, sent to Neale the following week, were dishonest, misleading, and even cleverly evasive on at least one crucially important point. His answers also contradict details recently exposed in a series of investigative exclusives by the Brad Blog, revealing several startling facts about the true ownership and control of Sequoia.

Moreover, after we broke the news in April, concerning the attempted hostile takeover of Sequoia by competitor Hart InterCivic, Blaine appeared to joke with employees during a confidential company-wide "town hall" teleconference about "the line" he used with yet another Chicago official, Cook County Clerk, David Orr. "He accepted it completely," Blaine told employees, as he underscored the importance of keeping details of the attempted takeover confidential, and how he was being less than forthcoming about it with the company's customers ...

Lying About Smartmatic's Control of Sequoia

In November of last year, as a federal investigation by the Treasury Department's CFIUS was closing in on the true provenance of Smartmatic's shadowy ownership, and after a failed attempt to find an outside buyer for the company, Blaine and several other Sequoia and/or Smartmatic executives formed SVS Holdings Inc., and proceeded to purchase Sequoia from the parent company.

However, a recent series of exclusive Brad Blog investigative reports has revealed that the sale, which succeeded in moving CFIUS to end their official review of the matter, was not what it seemed to be.

Recent court documents unearthed and published by the Brad Blog, detailing the terms of the attempted hostile takeover of Sequoia by competitor Hart InterCivic, make clear that Smartmatic still retains the intellectual property (IP) rights over Sequoia's popular, if oft-failed e-voting systems, as well as licensing control of the software used in their voting machines and tabulators.

See more stories tagged with: election, fraud, voting machines, sequoia, smartmatic

Liked this story? Get top stories in your inbox each week from Democracy and Elections! Sign up now »