U.S. digs for vote-machine links to Hugo Chávez

Miami Herald ^ | October 28, 2006 | ALFONSO CHARDY achardy@MiamiHerald.com

[Cincinatus' Wife]

Smartmatic's corporate papers, obtained in Curac¸ao by The Miami Herald, reveal a convoluted trail of companies incorporated abroad and operating through dozens of proxy holders -- a structure seemingly designed to cloak the true owners.

In the debate about the reliability of electronic voting technology, the South Florida parent company of one of the nation's leading suppliers of touch-screen voting machines is drawing special scrutiny from the U.S. government.

Federal officials are investigating whether Smartmatic, owner of Oakland, Calif.-based Sequoia Voting Systems, is secretly controlled by Venezuelan President Hugo Chávez, according to two people familiar with the probe.

In July, a Treasury Department spokeswoman disclosed that a Treasury-led panel had contacted Smartmatic, and a company representative said his firm was ''in discussions'' with the panel. At the time, those discussions were informal. The government has now upgraded to a formal investigation, the two sources said.

Sequoia's electronic voting machines operate in 17 states. In Florida, the machines are used in four counties: Palm Beach, Indian River, Pinellas and Hillsborough.

Miami-Dade and Broward use other technology.

Concerns about Smartmatic are keen on the eve of the Nov. 7 election, given fears that someone with unauthorized access to the electronic system could create electoral chaos. Some critics believe that if the Venezuelan government is involved, Smartmatic could be a ''Trojan horse'' designed to advance Chavez's anti-American agenda.

However, officials in all four Florida counties using Sequoia said they were satisfied with the machines and were not concerned about allegations of a Chávez connection because company officials told them the Venezuelan government had no stake in the company.

''We are very satisfied,'' said Kathy Adams, spokeswoman for the Palm Beach County supervisor of elections.

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 Chávez won.

Smartmatic categorically denies any link to the Chávez regime. ''Smartmatic is a privately held corporation, and no foreign government or entity -- including Venezuela -- has ever held an ownership stake in the company,'' Mitch Stoller, a company spokesman, said in an e-mail to The Miami Herald.

Botched municipal elections involving Sequoia machines in Chicago in March added to the suspicions.

When the Chicago City Council grilled Sequoia executive Jack Blaine in April, he revealed that some Venezuelans had provided technical support during the election and that some of the glitches could be traced to a component developed in Venezuela to print and transmit results to a central tabulation computer.

The Chicago Board of Election Commissioners is withholding further payment to Sequoia until after the Nov. 7 election.

Sequoia machines in Florida do not use the component involved in the Chicago problems, however.

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, but they did not dispute it. The two people familiar with the probe asked that their names not be published because they were not authorized to speak about it.

Brookly McLaughlin, a Treasury spokeswoman, said she could not comment. Stoller, the Smartmatic spokesman, said in an e-mail: ``We have been in contact with CFIUS staff and will provide additional information as appropriate and as requested.''

Determining whether there really is a hidden connection to Chávez or anyone in his government is difficult because of Smartmatic's complex, though legal, corporate structure.

Smartmatic's corporate papers, obtained in Curac¸ao by The Miami Herald, reveal a convoluted trail of companies incorporated abroad and operating through dozens of proxy holders -- a structure seemingly designed to cloak the true owners.

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.

Though both men come from wealthy families, a decidedly anti-Chávez sector, their reluctance to provide specific details about ownership has continued to fuel suspicions about the company.

Adding to the suspicions was a recent statement from the Venezuela Information Office about Smartmatic, which Chávez critics viewed as corroboration the company is linked to the government in Caracas.

But Eric Wingerter of the Venezuela Information Office in Washington said the ''fact sheet'' was, rather, aimed at rebutting critics' allegations that the Chávez government controls the company.

Ostensibly, the company's umbrella corporation, Smartmatic International Group, is housed inside a bank building on a scenic boulevard in Willemstad's busy Punda financial district. But all the people contacted either at the building or at the addresses of company proxy holders refused to talk to a reporter in Curac¸ao.

However, business records obtained by The Miami Herald in Willemstad's commercial registry provide no evidence of any Venezuelan government official or agency as director, associate, employee or proxy. What the records do show is the circuitous ownership structure with a paper trail leading from Willemstad to Amsterdam to Caracas to Delaware and then to Boca Raton and Oakland, Calif.

Stoller said the arrangement is standard for multinational companies.

But experts in offshore financial services say the Curac¸ao arrangement is largely designed to conceal and protect the true owners and assets of a company.

Cárlos A. Souffront, a partner and expert on offshore jurisdictions at the Miami-based law firm of Tew Cardenas, said companies often choose offshore havens to avoid paying high taxes and disclosing owners' identities or to protect assets and avoid scrutiny and oversight under post-9/11 U.S. regulations.

Stoller said the company is 97 percent owned by the four Venezuelan founders -- two of them dual citizens: Mugica (Spanish and Venezuelan), Anzola, Roger Piñate and Jorge Massa (French and Venezuelan). The remainder of the company, Stoller said, is owned ``by employees of Smartmatic (past and present) and family and acquaintances of the founders.''

Stoller did not identify any of them, and their names are not listed in records obtained by The Miami Herald.

The four top owners have not said whether they support or oppose Chávez.

Curac¸ao records show that Smartmatic International Group has three statutory directors: Piñate and two companies -- Curac¸ao Corporation Co. and Netherlands Antilles Corporation Co.

Piñate was also identified by Sequoia's Blaine as among the Venezuelans who helped deliver technology ''support'' during the glitch-plagued Chicago elections.

Curac¸ao business records also show that the two statutory director companies have 28 ''proxy holders,'' all employees of Curac¸ao International Trust Co.

CITCO is an old Dutch financial services firm based in the building Smartmatic lists as its Curac¸ao address. CITCO specializes in financial services for wealthy clients who seek confidentiality.

Smartmatic's Amsterdam address is also CITCO.

Anzola and Mugica, the main founders, are childhood friends. Anzola's father, Alfredo Anzola Mendez, wrote a column for the anti-Chávez Caracas newspaper Tal Cual.

[Madame Dufarge]

No matter what is claimed, the only way to have a verifiable election that can be recounted is paper ballots.

I agree wholeheartedly.

I want those nice elderly folks who volunteer at libraries and pass out ballots at voting time to count paper ballots.

I hate the idea of electronic voting.

[Pablo64]

I've never voted anywhere that didn't use some form of paper ballot (probably due to living in smaller, rural areas most of my life). I've used two types of paper ballots. One is the type with the infamous "chads". It is inserted into a holder in the center of a book in the voting booth. The book is permanently attached and has all the candidates and ammendments, etc., on it. You use a little stylus to punch through the ballot (knock out the chad). When you are done, you pull the ballot card back out and nobody can tell by looking at it who you voted for since all the candidate names, etc., were on the book in the voting booth. Your card just looks like a computer card with holes punched in it.

The other type (that I've used most often) is like your standard scan-tron card, similar to what you would use to take multiple choice tests in school. You color in the oval next to the name of the candidate you want to vote for. They give you a little kind of binder to put it in after you are done. Only the bottom sticks out and it is a perforated tag the election official tears off (number matched with your ballot). They tear off the ticket (to verify that that ballot has been used) then you slide your ballot into the locked box by holding the little binder up to the slot and letting your ballot slide into the box.

I've always wondered what an electronic voting machine would be like to use, but I'm satisfied with the paper ballots. It's at least something tangible.

[RichardW]

This e-voting is a prescription for disaster. Paper ballots are the only way to go. You don't fix what isn't broken. And we ought to have early voting as well. I voted this past Monday in Texas. In an out in 10 minutes.

[FairOpinion]

"Federal officials are investigating whether Smartmatic, owner of Oakland, Calif.-based Sequoia Voting Systems, is secretly controlled by Venezuelan President Hugo Chávez, according to two people familiar with the probe. "


Amazing!

I hope there is a full investigation.

[sam_paine]

I'm an engineer.

I'm NOT opposed to electronic voting.

The stakes are too high. No matter what is claimed, the only way to have a verifiable election that can be recounted is electronic ballots. In paper land, votes can appear and/or disappear without a trace. Votes need to remain immidiately verifiable.

---
Give people a paper receipt of their ballot.
---

Funny how we accept that every dollar I give to the FedGov disapears into a bizarre black hole that pays for ilegal immigrants and bridges to nowhere, yet we are worried about efforts to avoid the legal cheating that went on in PBC or Chicago in 2000 with paper ballots.

[okie01]

A very important story that the MSM has somehow managed to overlook -- despite their wailing and moaning about vote suppression and Diebold.

[rfp1234]

Vote Absentee!!!

[shield]

Here's one for you.

[Artemis Webb]

This is potentially very big.

The graphic summarizes things very well.

[UnbelievingScumOnTheOtherSide]

Don't worry...

Just let ME count the votes 8*}

[montag813]

Cool...now we on the right can have our very own "the election was stolen" conspiracy!

[Chode]

no no no... it's dibold, Dibold, DIBOLD!!! pay no atttention to the man behind the gas pump!!!

Chavez: "You are a devil, you smell like sulfur, you are a drunk, you are the demon, you are a dictator, you are an assassin Mr. Devil, you are..."

Bush: "YEAH, Yeah, yeah, WHATever... just fill'er up MonkeyBoy!"

[Tunehead54]

Very Scary News bump ;-(

[Kenny500c]

Why use these things when there is no reason for it.

I don't mind waiting for the results but I guess the news outfits want a quick result.

How about paper ballots, photo ID and purple dye?

[defenderSD]

"No matter what is claimed, the only way to have a verifiable election that can be recounted is paper ballots."

You're right; there has to be some kind of physical ballot generated by the voter, whether it be a paper ballot or some other material like a punched plastic card that might be more durable during recounts. I'm a software developer myself and like you I know how easily electronic votes can be changed or frabricated.

It seems like we need some kind of hybrid voting system where an automated stylus device punches the ballot for the voters with no mistakes and no "hanging chads" and then verifies that the ballot has been properly punched with an indicator light that flashes bright blue for a good hole punch (can't use red or green because of color bindness). That's all we need, just a device to punch the ballots properly and verify to the voter that the ballot has been properly punched.

As you say, the stakes are way too high and software can be easily manipulated. Physical ballots can still be illegally cast and stuffed into ballot boxes, but at least that kind of fraud is much easier to prevent than electronic fraud. I predict eventually some day we'll get rid of voting machines and just go with an automated stylus device to punch the ballots. Maybe we should start a campaign for this on FR.

There is a proper use for databases and software technology to keep a running tabluation of vote counts and detect sudden inexplicble changes in counts that could indicate fraud. But there's no good way to replace a physical ballot and these voting machines are scary, especially considering the low level of honesty of many democRAT politicians today.

[windchime]

Convoluted, complicated, secretive, involvement in international election structure and technology would indicate some involvement by this guy:

Soros Blows a Clinton-Style Gasket at Fox's Cavuto

Posted by Tim Graham on October 6, 2006 - 08:21.

NRO Media Blog notes that George Soros blew a Clinton-style gasket at Neil Cavuto on Fox Thursday afternoon. Cavuto raised his accented ire by noting that he may not be paying all those taxes on the super-rich that the Left constantly demands, since his Quantum Fund is registered in the Netherlands Antilles, in Curacao:

Soros funded Stewart defense
NRO.com ^ | 10-16-06 | Byron York

Soros's Quantum Fund is registered in Curacao, Netherlands Antilles, the Caribbean tax haven - so he avoids paying taxes, and also hides the nature of his investors, and what he does with their money. By moving his legal headquarters to Curacao. Soros was able to avoid the kind of U.S. government supervision of his financial activities, that any U.S.-based investment fund must agree to, in order to operate. The Netherland Antilles, a possession of the Kingdom of Holland, has repeatedly been cited by the International Task Force on Money Laundering of the OECD as one of the world's most important centers for laundering the illegal proceeds of the Latin American cocaine and other drug traffic.
http://users.cyberone.com.au/myers/soros.html

43 posted on 10/16/2006 7:49:46 PM EDT by fight_truth_decay

Soros's Quantum Fund is registered in Curacao, Netherlands Antilles, the Caribbean tax haven - so he avoids paying taxes, and also hides the nature of his investors, and what he does with their money. By moving his legal headquarters to Curacao. Soros was able to avoid the kind of U.S. government supervision of his financial activities, that any U.S.-based investment fund must agree to, in order to operate. The Netherland Antilles, a possession of the Kingdom of Holland, has repeatedly been cited by the International Task Force on Money Laundering of the OECD as one of the world's most important centers for laundering the illegal proceeds of the Latin American cocaine and other drug traffic.
http://users.cyberone.com.au/myers/soros.html

[Cincinatus' Wife]

How interesting.