Bizta, the startup that makes Smartmatic election software, announces it will buy back the Venezuelan government’s 28 percent stake in the company. A company spokesman, though, says Bizta is just repaying a “loan.”
The Miami Herald calls it “a move meant to deflect criticism that the government’s investment was a tool to manipulate the election” to prevent strongman Hugo Chavez from being recalled.
However, a Bizta press release calls the transaction the repayment of a “loan,” not a stock buyback.
“The announcement by software maker Bizta Corp. comes amid en escalating uproar in Venezuela over the reliability and trustworthiness of the ‘touch-screen’ voting machines, purchased [by the government’s National Electoral Commission] in February for $91 million. The machines have never been used in an election anywhere,” the Herald‘s Richard Brand reports.
“‘They were caught. We discovered the fraud and now they are covering it up,’ said Ernesto Alvarenga, an opposition congressman. ‘We still have to be careful. All of this is related to the electronic fraud that they are trying to achieve,” according to the Herald.
“The Herald also reported that a top official in Venezuela’s science ministry, Omar Montilla, joined Bizta’s board of directors in December to represent the government’s three million shares. Two months later, the National Electoral Council a warded Bizta and partners Smartmatic and CANTV the $91 million.
“Bizta officials said Friday they were buying back the shares, purchased for about $200,000, to address concerns about the government’s influence in the company as it prepares for the critical August referendum,” the Herald reports.
However, the Herald quotes a Bizta news release as saying that the company is not buying back shares, but “repaying the .. loan.”
“Given our current engagements, even the appearance of a conflict of interest is unacceptable, and as a result, we are repaying the . . . loan and Omar Montilla is stepping down from our Board of Directors,” Eduardo Correia, a Bizta official, says in a company press release quoted by the Herald.
“The sudden decision also comes one day after The Herald started asking Bizta executives about Montilla’s background. Montilla, the Herald learned, was an ally of Chavez who had an intricate role in his 1998 election campaign,” the Herald says.
“Montilla had been a top official in a group called UNEPAD, formed by then presidential candidate Chavez’s Patriotic Pole coalition in 1997 to monitor his first election and conduct exit polls, among other things. Most Venezuelan political parties maintain monitoring groups such as UNEPAD to protect their party interests at the polls,” according to the report.
“While working for the Chavez campaign in 1998, Montilla was given the task of evaluating the effectiveness of electronic voting machines being used at the time, an optical scanner system built by Omaha-based Election Systems & Software, former UNEPAD members said.
“As an electronic engineer, his job was to make sure that Chavez would not be cheated in the election, a former UNEPAD member said,” according to the Herald, which added that “Montilla declined several requests to be interviewed.”
Source:
Richard Brand, “Voting-system firm drops Venezuela as an investor,” Miami Herald, June 12, 2004, as part of Rep. Carolyn Maloney package to Treasury Secretary John Snow, May 4, 2006.
1. Letter_to_Sec_Dep_Treasury_CarolynMaloney.pdf
1. The repurchase of the shares by Bizta is a first step to avoid leaving evidence of the Venezuelan regime’s relationship and intervention with Smartmatic and Bizta, companies that have the same management structure?
2. Could one reasonably presume that these actions were a way of attempting to hide the company’s and executives’ relations with the Chavez government, given the hailstorm of criticism from independent election experts and the Venezuelan democratic opposition?
3. Are they trying to mask the government’s obvious role of power over Bizta’s decisions?
4. What does this mean for electronic voting in the United States?
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