‘Venezuela owns stake in ballots’

The Miami Herald breaks the first major investigative story about the Bizta software company that designed the Smartmatic software to enable Hugo Chavez to defeat the 2004 recall referendum. It reveals that the Venezuelan government is “a large and powerful investor in the software company, which will design electronic ballots and record votes for Venezuela’s new and much criticized election system.”

The story, authored by New York Law student Richard Brand and Miami Herald veteran reporter Alfonso Chardy, is based on interviews and official documents in Venezuela.

Excerpts

• Venezuelan government invests in election software developer. “A large and powerful investor in the software company that will design electronic ballots and record votes for Venezuela’s new and much criticized election system is the Venezuelan government itself.”
• Chavez regime bought 28 percent of Bizta.“Venezuela’s investment in Bizta Corp., the ballot software firm, gives the government 28 percent ownership of the company it will use to help deliver voting results in future elections, including the possible recall referendum against President. Hugo Chavez, according to records obtained by The Herald.”
• Deal builds two unproven, unknown new companies after scrapping established provider. “The deal to scrap the country’s 6-year-old machines – for a $91 million system to be built by two fledgling companies that have never been used in an election before – was already controversial among Chavez opponents who claimed it was a maneuver to manipulate votes amid growing political turmoil.”
• Chavez opponents are shocked at regime’s ‘proprietary stake.’ “Chavez opponents … were stunned to learn the government has a proprietary stake in a company critical to the election process. ‘The Venezuelan state? Are you kidding?,’ said Jesus Torrealba, an official in the Democratic Coordinator opposition group. ‘It impugns the credibility of the process. That is shocking.'”
• Caracas says it’s just a coincidence. “Government officials insist the investment is an effort to help support private enterprise and its interest in a ballot software company is merely coincidental….”
• Bizta had almost no business until regime bought stake. “Until a year ago, the Bizta Corp. was a struggling Venezuelan software company with barely a sales deal to its name, records show. Then, the Venezuelan government – through a venture capital fund – invested about $200,000 and bought 28 percent of it.”
• Chavez regime is now Bizta’s largest shareholder and client. “The government’s investment in Bizta made Venezuela Bizta’s largest single shareholder and, ultimately, its most important client.”
• Decision to scrap ES&S was made in secret, in closed-bid process. “The decision to replace the $120 million system built by Omaha-based Election Systems & Software was made Feb. 16 under unusual circumstances. Two of the five National Electoral Council members sympathetic to the opposition complained that they had been largely shut out of the process. ‘The selection process was secret and it didn’t allow us to get any information about the bidders and their products,’ board member Sobella Mejias said after the decision.”
• Smartmatic will build the system on Bizta software. “The new system is to be built by the Smartmatic Corp., which is incorporated in Florida, and programmed by Bizta, which also is registered in Florida and Venezuela.”
• Pro-Chavez officials say Smartmatic-Bizta machines ‘among the most secure in the world.’ “Pro-Chavez government officials and company executives interviewed by The Herald say the Smartmatic-Bizta machines are among the most secure in the world, and that the government’s investment in Bizta was unrelated to Bizta’s bid for the voting machine contract.”
• Chavez ambassador to Washington praises the Smartmatic-Bizta system. “The companies that were chosen have the highest technical capacity,” said Venezuela’s ambassador to Washington, Bernardo Alvarez. “In Venezuela there have been many fair elections and there will be many more fair elections.”
• Carter Center calls for independent election audits. “But the Atlanta-based Carter Center, which has observed every major Venezuelan electoral process since Chavez’s election in 1998, said the disclosure of the government’s role in Bizta reinforces the need for independent election audits.”
• Jennifer McCoy of Carter Center says the ‘new machines’ must be audited. “‘What we look at in any electoral process is whether each of the components is transparent and auditable. In this case, we would include these new machines,’ said Jennifer McCoy, who is leading the Carter Center’s mission in Venezuela. She said she was unaware of the government’s investment in Bizta.”
• Stanford professor warns of programmed ‘possible manipulation.’ Even without the political implications, the use of electronic voting machines has been widely debated since the United States’ 2000 presidential election. Stanford University Professor David Dill, who has studied voting machines but is not specifically knowledgeable about the new Venezuelan system, said almost any programmed electronic machine is subject to possible manipulation.”
• Easy for machines to fail even when ‘fixed.’ “People just don’t understand how easily these machines could fail to record votes accurately – even by being ‘fixed,'” Professor Dill said.

Full text of Miami Herald article

Source:
Package from Rep. Carolyn Maloney to Treasury Secretary John H. Snow, May 4, 2006,
1.Letter_to_Sec_Dep_Treasury_CarolynMaloney.pdf
2.www.miami.com/mld/miamiherald/news/world (Original article)
3.All the Presidente’s Men | NYU Law Magazine
4.https://engineering.stanford.edu/people/david-dillAhora
5.https://www.facebook.com/david.dill.750983/?locale=ms_MY

1. Is any election really reliable where Smartmatic or its system has been involved, given the company’s strong connection with Chavismo, an undemocratic regime allied to countries like China, Russia, Cuba, and Iran?

2. What was happening in the U.S. that prompted Richard Brand to take an interest in a small Venezuelan company?

3. Why was the rhetoric of Smartmatic and the government always the same in defending the creation of the source code?

4. Why did the Carter Center endorse an election that was plagued by irregularities?

5. Were the Carter Center’s recommendations to conduct independent audits of Venezuela’s elections followed, given the Venezuelan government’s role as a major shareholder and principal client of Bizta Corp.?

6. Would the Venezuelan government’s shares in Bizta, and its role as Bizta’s principal client, provide enough power to dominate or control decisions and guide the company to create software to influence electoral results in the regime’s favor?

7. What does that say about any election software with its origins in Bizta/Smartmatic?