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This article appeared last week in The Miami Herald.

Link:

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.

And this appeared in Investor's Business Daily on Thursday:

Hugo Wants Your Vote
Posted 4/5/2006

Elections: If 9-11 taught us anything, it was to be wary of asym- metrical threats from hostile entities no matter what size. We might just get ambushed again if the Venezuelan government ends up controlling our elections.

Don't think it can't happen. A Venezuelan-linked company called Smartmatic has bought out a U.S. electronic voting device firm called Sequoia, which holds contracts for elections in Chicago and elsewhere.

U.S. foreign investment bureaucrats aren't worried because no military secrets are involved. But that kind of thinking can blindside our democratic institutions as we look for threats to our hardware.

Venezuelan President Hugo Chavez is the foremost meddler in foreign elections in the Western hemisphere and has been accused of secretly financing candidates in Peru, Nicaragua, Bolivia and Mexico. Why wouldn't he be interested in influencing vote outcomes here?

He's already trying to influence our politics through a congressional lobbying effort and a cheap fuel program for welfare recipients explicitly linked to congressional participation.

These and other shenanigans signal interest in influencing perceptions in the U.S.

There's plenty of domestic white noise about electronic machines to cloud the issue. But the problems Chavez could cause are in a different league.

Even as regulators dismiss security threats, the performance of Smartmatic in Venezuela's own elections raises questions.

For example, 82% of voters there sat out last December's Smartmatic-operational congressional race on shattered confidence in the system.

The Smartmatic machines are capable of controlling the speed at which votes are transmitted, creating long lines to discourage voting. They can also instantaneously tally as results come in, giving favored sides information to manipulate turnout.

Mathematicians accuse them of flipping results. And combined with fingerprint machines, they can match votes to voters, violating ballot secrecy.

There may be no problem with Smartmatic working U.S. elections, but just wait for a close call and see how credible the result will be. With as many problems as U.S. elections have seen, the one thing it doesn't need is to import Venezuela's electoral wreckage.