October 29, 2006
WASHINGTON (AP) -- A U.S. manufacturer of touch-screen voting machines has asked the government to investigate reports the company is connected to Venezuelan President Hugo Chavez, company officials said Sunday. They deny any connection to Chavez.
Sequoia Voting Systems Inc., based in Oakland, California, said the Committee on Foreign Investment in the United Stateswas conducting the formal inquiry into it, as well as its parent software company, the Smartmatic Corp., at the firms' request after news articles suggested improper ties.
The inquiry was focusing on last year's acquisition of Sequoia by Smartmatic, a company owned by three Venezuelans based in Boca Raton, Florida. The government also is investigating whether Chavez's leftist government has any influence over the companies' operations.
Chavez is a longtime foe of the Bush administration who drew criticism from lawmakers of both U.S. parties last month after he called President Bush "the devil" in a speech at the United Nations.
"Sequoia and Smartmatic are not connected, owned or controlled by the Venezuelan government whatsoever," Jeff Bialos, a Washington attorney representing the two firms, said in a telephone interview.
"There's no basis for the allegations. We were trying to prove a negative, so the two companies voluntarily submitted a notice asking CFIUS to review the acquisition to put to rest the press allegations," he said.
Brookly McLaughlin, a spokeswoman for the Treasury Department, which oversees the foreign investment committee, said Sunday that the government has been in contact with Smartmatic but declined to comment as to whether there was a formal investigation.
The inquiry, disclosed in the final days before the November congressional elections, comes amid growing concern about the reliability of electronic voting machines in what are expected to be many tight races nationwide.
A report released earlier this month by The Century Foundation think tank found problems with malfunctioning voting machines in 10 states it sampled. Activists, meanwhile, have filed lawsuits in at least nine states contending the new electronic voting machines are not secure.
Rep. Carolyn Maloney, D-New York, said Sunday she welcomed the formal review. She said she asked the government in May to examine the Sequoia takeover.
"It's a national security issue," she said in a telephone interview. "Having a foreign government investing or owning a company in this country that makes voting machines could raise a question about the integrity of the elections."
According to Smartmatic, the firm is owned primarily by three individuals and their families: Antonio Mugica, a dual-Spanish-Venezuelan national who is the chief executive officer (78.8 percent); Alfredo Anzola (3.9 percent); and Roger Pinate (8.5 percent). Investor Jorge Massa as well as Smartmatic employees and other friends own the remainder.
"No foreign government or entity -- including Venezuela -- has ever held an ownership stake in Smartmatic," Mugica said in a statement late Sunday.
The two companies said they have been cooperating with the government after initial questions were raised last spring, but decided to seek a formal review more recently.
Sequoia, which has been operating since the late 1800s and providing electronic voting equipment since the 1980s, currently provides electronic voting machines for 16 states as well as the District of Columbia.
"Sequoia is very confident our equipment will perform as well as it has over the course of history," said Sequoia spokeswoman Michelle Shafer. "It wouldn't matter if the voting equipment is created by Martians, because it all goes through a very vigorous testing process at the federal and state level."
The investigation was first reported Saturday by The Miami Herald.