By Rachel Konrad, The Associated Press, September 8, 2004
Excerpts:
Nevada residents became the first in the nation to vote on computers that leave a paper trail, taking part in a primary that produced scattered reports of delays though none of the serious problems that have cast doubt upon electronic voting systems in other states.
A delegation of federal election officials monitored the equipment's debut Tuesday in the state capital as voters cast ballots for congressional candidates, state legislators, school officials and judges. Results matched expectations.
Scattered reports of problems including in Nye, Washoe and Pershing counties delayed vote tabulation, but didn't throw election results into question.
Officials in Nye County couldn't read the data on one computer but weren't overly worried. If they couldn't tease the results out of the machine which held an unknown number of votes they could count paper ballots by hand instead.
"If we can't ever read it, we'll use the paper trail as the backup," said Nye County deputy clerk Laura Zubia, who helped recover the data shortly after midnight. "That's the whole point of the paper trail, isn't it?"
------
Nevada Secretary of State Dean Heller said the system represented a "huge leap forward" for Nevada, where seven of 17 counties used old-fashioned punch card machines in the previous election.
"From what I've seen, voters seem to enjoy the experience," said DeForest B. Soaries Jr., chairman of the U.S. Election Assistance Commission, who traveled through Nevada on Tuesday with out-of-state voter registrars and other federal officials. "There hasn't been frustration or confusion."
The printers, developed by Oakland, Calif.-based Sequoia Voting Systems Inc., address some concerns of computer scientists and voting activists. Critics say paperless touchscreens which as many as 50 million Americans will use Nov. 2 cannot be properly audited or recounted, and votes can be altered or deleted.
Voter advocates praised Nevada's system, which requires county registrars to randomly select a small percentage of machines from 1 percent to 3 percent of a county's total and compare printed records with the vote totals taken from computers' memory cartridges after polls close. The paper records which voters can see through a plastic window but cannot touch or take home will be kept in county election offices for 22 months and used in case of a recount.
"It's no panacea, but it's a huge improvement over paperless systems because there will be a paper record of every electronic ballot," said Kim Alexander, president of Davis, Calif.-based California Voter Foundation.
Wednesday, September 8, 2004
Calif. Joins Electronic Voting Lawsuit
By Rachel Konrad, Associated Press, September 8, 2004
Excerpt:
California Attorney General Bill Lockyer joined a lawsuit Tuesday alleging that voting equipment company Diebold Inc. sold the state shoddy hardware and software, exposing elections to hackers and software bugs.
California's Alameda County also joined the false claims case, originally filed by a computer programmer and voting rights advocate. Faulty equipment in the March primary forced at least 6,000 of 316,000 voters in the county east of San Francisco to use backup paper ballots instead of the paperless voting terminals.
The lawsuit is the first e-voting case to rely on an obscure legal provision for whistleblowers who help the government identify fraud. Programmer Jim March and activist Bev Harris, who first filed the case in November, are seeking full reimbursement for Diebold equipment purchased in California.
Alameda County has spent at least $11 million on paperless touchscreen machines. State election officials have spent at least $8 million.
Because the lawsuit relies on an obscure provision called "qui tam," March and Harris could collect up to 30 percent of a reimbursement. The state could collect triple damages from Diebold, or settle out of court.
The attorney general's decision to join the e-voting lawsuit is unusual. The government declines to participate in about 70 percent of all qui tams filed, said Bob Bauman, a private investigator and former government consultant.
"The state clearly believes there's merit to the case," said Berkeley, Calif., attorney Lowell Finley, who represents March and Harris. "This is a significant event and good news for us."
Thomas W. Swidarski, Diebold senior vice president, said the state's intervention could lead to a "fair and dispassionate examination of the issues raised in the case."
Also Tuesday, the attorney general announced he would not pursue criminal charges against Diebold. Earlier this year, California Secretary of State Kevin Shelley banned one Diebold system after he found uncertified software that "jeopardized" the outcome of elections in several counties, and state voting officials began considering filing a criminal lawsuit against the company.
"We fully cooperated with the state as it looked into the issues and have always believed that the attorney general would reach this conclusion," Swidarski said.
Lockyer spokesman Tom Dresslar said the decision to join the lawsuit came after months of investigating problems with Diebold equipment. In the March primary, 573 of 1,038 polling places in San Diego County failed to open on time because of computer malfunctions.
The state will likely file its own complaint or an amended complaint within several weeks, if the parties don't settle out of court, Dresslar said.
Excerpt:
California Attorney General Bill Lockyer joined a lawsuit Tuesday alleging that voting equipment company Diebold Inc. sold the state shoddy hardware and software, exposing elections to hackers and software bugs.
California's Alameda County also joined the false claims case, originally filed by a computer programmer and voting rights advocate. Faulty equipment in the March primary forced at least 6,000 of 316,000 voters in the county east of San Francisco to use backup paper ballots instead of the paperless voting terminals.
The lawsuit is the first e-voting case to rely on an obscure legal provision for whistleblowers who help the government identify fraud. Programmer Jim March and activist Bev Harris, who first filed the case in November, are seeking full reimbursement for Diebold equipment purchased in California.
Alameda County has spent at least $11 million on paperless touchscreen machines. State election officials have spent at least $8 million.
Because the lawsuit relies on an obscure provision called "qui tam," March and Harris could collect up to 30 percent of a reimbursement. The state could collect triple damages from Diebold, or settle out of court.
The attorney general's decision to join the e-voting lawsuit is unusual. The government declines to participate in about 70 percent of all qui tams filed, said Bob Bauman, a private investigator and former government consultant.
"The state clearly believes there's merit to the case," said Berkeley, Calif., attorney Lowell Finley, who represents March and Harris. "This is a significant event and good news for us."
Thomas W. Swidarski, Diebold senior vice president, said the state's intervention could lead to a "fair and dispassionate examination of the issues raised in the case."
Also Tuesday, the attorney general announced he would not pursue criminal charges against Diebold. Earlier this year, California Secretary of State Kevin Shelley banned one Diebold system after he found uncertified software that "jeopardized" the outcome of elections in several counties, and state voting officials began considering filing a criminal lawsuit against the company.
"We fully cooperated with the state as it looked into the issues and have always believed that the attorney general would reach this conclusion," Swidarski said.
Lockyer spokesman Tom Dresslar said the decision to join the lawsuit came after months of investigating problems with Diebold equipment. In the March primary, 573 of 1,038 polling places in San Diego County failed to open on time because of computer malfunctions.
The state will likely file its own complaint or an amended complaint within several weeks, if the parties don't settle out of court, Dresslar said.
Friday, September 3, 2004
Board Begins Process Of Firing Maryland Election Administrator
The Associated Press, September 3, 2004
Maryland's State Board of Elections began the process of firing the state's election administrator, Linda Lamone. Lamone is a key supporter of touchscreen voting machines, and oversaw statewide implementation of $54 million worth of Diebold paperless touchscreen voting machines. She is also currently the president-elect of the National Association of State Election Directors (NASED), a self-appointed body organized on behalf of election officials that orchestrates the federal voting equipment testing process.
If she is removed from her post, Lamone will join a number of other election officials who has been removed, resigned or retired this year. Theresa LePore, Palm Beach County FL election supervisor who pushed for and got paperless electronic voting machines, was defeated in her re-election bid this week. Mischelle Townsend, who as registrar for Riverside County was the first to purchase paperless touchscreens in California, retired in July. Laura Winslow, who purchased paperless toucshcreens from Diebold that were not federally qualified, resigned after the March election. In Washington State, David Elliott, who has been a supporter of paperless e-voting, has also recently retired.
--------
Excerpts from the AP story:
A move by the Republican-dominated State Board of Elections to fire state election laws administrator Linda Lamone drew stinging rebukes Friday from Democratic lawmakers who charged that the board is trying to politicize a nonpartisan office.
"This is raw, partisan politics, and smacks of Florida being revisited in Maryland," Senate President Thomas V. Mike Miller, D-Calvert, said.
"I can't imaging that the Republicans could trump up any charges that could be sustained in a court of law in terms of reasons for her dismissal," Miller said.
House Speaker Michael Busch, D-Anne Arundel, also defended Lamone, saying she "has been acknowledged as running a model election board for the nation."
Miller and Busch noted that Lamone has the respect of election administrators in other states, who have chosen her as president-elect of their national organization.
Busch said it has been the goal of the Ehrlich administration "to take over the election board for well over a year."
Gilles Burger, chairman of the board, said it "is hard to address this kind of perception" that the board was motivated by political considerations.
"I can tell you this has nothing to do with partisan politics," he said.
A statement issued by the board said the members were responding to "several complaints from multiple sources, including several local boards of elections...." about Lamone's performance as head of the office that oversees Maryland elections.
-------
Burger said the board voted Thursday night after meeting privately for more than seven hours to file administrative charges against Lamone. He said he is prohibited by law from disclosing details of the charges, but the law allows her to be dismissed only for "incompetence, misconduct or other good cause."
The next step in the process will be a hearing before an administrative law judge, where Lamone would have the right to contest the findings included in the charges filed against her. Burger said a decision on whether to fire Lamone would not be made until the board received a report from the administrative law judge affirming or rejecting the complaints against the administrator.
Maryland's State Board of Elections began the process of firing the state's election administrator, Linda Lamone. Lamone is a key supporter of touchscreen voting machines, and oversaw statewide implementation of $54 million worth of Diebold paperless touchscreen voting machines. She is also currently the president-elect of the National Association of State Election Directors (NASED), a self-appointed body organized on behalf of election officials that orchestrates the federal voting equipment testing process.
If she is removed from her post, Lamone will join a number of other election officials who has been removed, resigned or retired this year. Theresa LePore, Palm Beach County FL election supervisor who pushed for and got paperless electronic voting machines, was defeated in her re-election bid this week. Mischelle Townsend, who as registrar for Riverside County was the first to purchase paperless touchscreens in California, retired in July. Laura Winslow, who purchased paperless toucshcreens from Diebold that were not federally qualified, resigned after the March election. In Washington State, David Elliott, who has been a supporter of paperless e-voting, has also recently retired.
--------
Excerpts from the AP story:
A move by the Republican-dominated State Board of Elections to fire state election laws administrator Linda Lamone drew stinging rebukes Friday from Democratic lawmakers who charged that the board is trying to politicize a nonpartisan office.
"This is raw, partisan politics, and smacks of Florida being revisited in Maryland," Senate President Thomas V. Mike Miller, D-Calvert, said.
"I can't imaging that the Republicans could trump up any charges that could be sustained in a court of law in terms of reasons for her dismissal," Miller said.
House Speaker Michael Busch, D-Anne Arundel, also defended Lamone, saying she "has been acknowledged as running a model election board for the nation."
Miller and Busch noted that Lamone has the respect of election administrators in other states, who have chosen her as president-elect of their national organization.
Busch said it has been the goal of the Ehrlich administration "to take over the election board for well over a year."
Gilles Burger, chairman of the board, said it "is hard to address this kind of perception" that the board was motivated by political considerations.
"I can tell you this has nothing to do with partisan politics," he said.
A statement issued by the board said the members were responding to "several complaints from multiple sources, including several local boards of elections...." about Lamone's performance as head of the office that oversees Maryland elections.
-------
Burger said the board voted Thursday night after meeting privately for more than seven hours to file administrative charges against Lamone. He said he is prohibited by law from disclosing details of the charges, but the law allows her to be dismissed only for "incompetence, misconduct or other good cause."
The next step in the process will be a hearing before an administrative law judge, where Lamone would have the right to contest the findings included in the charges filed against her. Burger said a decision on whether to fire Lamone would not be made until the board received a report from the administrative law judge affirming or rejecting the complaints against the administrator.
Ballot-counting mistake in Palm Beach County deemed simple human error
By Cadence Mertz, South Florida Sun-Sentinel, September 3, 2004
Palm Beach County, Florida, experienced a "human error" problem this week while counting its ballots. Luckily for Palm Beach, the "human error" happened with their paper absentee ballots. Turns out an election worker made a mistake and a stack of absentee ballots were counted twice.
It's only logical to expect that "human errors" will also occur with paperless electronic voting systems. When they do, and when the problems are supposedly corrected but election officials can't provide the public with verification that the corrected results are accurate, it is inevitable that voters will lose confidence in the accuracy of election results.
--------
Excerpts from the Sun-Sentinel story:
Palm Beach County election officials on Thursday downplayed ballot-counting discrepancies as they officially certified polling results a few days early in anticipation of Hurricane Frances.
An apparent double-count of 6,701 absentee ballots capped off a difficult week for Supervisor of Elections Theresa LePore, who lost her bid for re-election in Tuesday's primary. But elections officials said charges that problems with the absentee ballot count amounted to a flaw in the system were overblown.
The discrepancy was the result of simple human error. And the fact that it was found and dealt with so quickly demonstrates the system is working, said County Judge Barry Cohen, chairman of the Palm Beach County Canvassing Board.
"The final certification today means that we got it right," Cohen said Thursday.
------
Elections workers ran into trouble with the absentee ballots when an employee ran a batch through the counting machine and forgot to reset the counter. That meant the machine reported the two batches of ballots instead of one, officials said.
Workers ran the ballots back through the counting machines and came up with the correct tally, County Attorney Denise Nieman said.
The kind of glitch that happened this week does not qualify as a recount under the legal statutes, Nieman said. A recount, legally, occurs if votes were not counted or if a candidate requests it, she said.
But when election workers counted the ballots on Wednesday, one result of the 70 races decided in Tuesday's primary was overturned. Robert Beasley defeated Tom Mullings by a little more than .5 percent to win a seat on the district 85 Republican Executive Committee.
Palm Beach County, Florida, experienced a "human error" problem this week while counting its ballots. Luckily for Palm Beach, the "human error" happened with their paper absentee ballots. Turns out an election worker made a mistake and a stack of absentee ballots were counted twice.
It's only logical to expect that "human errors" will also occur with paperless electronic voting systems. When they do, and when the problems are supposedly corrected but election officials can't provide the public with verification that the corrected results are accurate, it is inevitable that voters will lose confidence in the accuracy of election results.
--------
Excerpts from the Sun-Sentinel story:
Palm Beach County election officials on Thursday downplayed ballot-counting discrepancies as they officially certified polling results a few days early in anticipation of Hurricane Frances.
An apparent double-count of 6,701 absentee ballots capped off a difficult week for Supervisor of Elections Theresa LePore, who lost her bid for re-election in Tuesday's primary. But elections officials said charges that problems with the absentee ballot count amounted to a flaw in the system were overblown.
The discrepancy was the result of simple human error. And the fact that it was found and dealt with so quickly demonstrates the system is working, said County Judge Barry Cohen, chairman of the Palm Beach County Canvassing Board.
"The final certification today means that we got it right," Cohen said Thursday.
------
Elections workers ran into trouble with the absentee ballots when an employee ran a batch through the counting machine and forgot to reset the counter. That meant the machine reported the two batches of ballots instead of one, officials said.
Workers ran the ballots back through the counting machines and came up with the correct tally, County Attorney Denise Nieman said.
The kind of glitch that happened this week does not qualify as a recount under the legal statutes, Nieman said. A recount, legally, occurs if votes were not counted or if a candidate requests it, she said.
But when election workers counted the ballots on Wednesday, one result of the 70 races decided in Tuesday's primary was overturned. Robert Beasley defeated Tom Mullings by a little more than .5 percent to win a seat on the district 85 Republican Executive Committee.
Designer of Florida's butterfly ballot loses job
By John-Thor Dahlburg, Los Angeles Times, September 2, 2004
Excerpts:
As a final irony, there has been a last-minute discrepancy in tallying absentee ballots. But Theresa LePore, the elections supervisor in Palm Beach County who gained national notoriety as designer of the "butterfly ballot" that contributed to Florida's 2000 election chaos, appeared Wednesday to have lost her job.
"The voter anger was obvious, and LePore became the target this year," when she sought a third term, said Shari MacLachlan, professor of political science at Palm Beach Community College.
The Democratic Party, the dominant force in her county's politics, criticized LePore, 49, for refusing to add safeguards to new touch-screen voting machines that would generate a paper trail for use in the event of a recount.
According to complete but still uncertified results from Tuesday's primary, LePore lost to Arthur Anderson by 5,533 votes out of more than 177, 000 cast. Anderson, 63, is an education professor at Florida Atlantic University and former member of the county school board.
Though the race was nonpartisan, Anderson was championed by Democratic U. S. Rep. Robert Wexler of Boca Raton, and boosted by campaign appearances by former Democratic presidential candidates Sen. Joe Lieberman and former Vermont Gov. Howard Dean.
------
On Wednesday, co-workers in the supervisor's office said LePore did not come to work. LePore began working in the county elections office in West Palm Beach as a file clerk 33 years ago.
"She's worked in that office since she was 16 years old. So this is a significant shock and a loss that's going to take some time to heal," spokesman Marty Rogol said.
LePore remains in office until January and therefore will oversee another presidential election.
-----
"Unfortunately, Ms. LePore did not help matters for herself because she never took responsibility," said Carol Ann Loehndorf, chair of the Democratic Party of Palm Beach County. "There was a continuous effort to blame the voters. "
If LePore had advocated additional technology to create a paper record for the new touch-screen machines -- which the supervisor purchased to prevent a repeat of the 2000 debacle -- Loehndorf said Democrats would probably not have challenged her this year.
Asked to explain his boss' defeat, Rogol blamed "residual anger from 2000 and the relentless effort by Congressman Wexler to defeat her."
Wexler, who has sued in state and federal court to demand that the touch- screen machines be modified -- so far to no avail -- paid for a barrage of TV ads against LePore and brought in Dean and Lieberman to stump for her rival.
------
On Wednesday, a problem with tallying absentee ballots delayed certification of Palm Beach County returns until today at the earliest. Rogol said 31,095 ballots were received, but that the counting machine for some unknown reason showed it tallied 37,839. A recount was ordered. Rogol said he did not believe the county's latest election-related glitch would affect the final results.
Excerpts:
As a final irony, there has been a last-minute discrepancy in tallying absentee ballots. But Theresa LePore, the elections supervisor in Palm Beach County who gained national notoriety as designer of the "butterfly ballot" that contributed to Florida's 2000 election chaos, appeared Wednesday to have lost her job.
"The voter anger was obvious, and LePore became the target this year," when she sought a third term, said Shari MacLachlan, professor of political science at Palm Beach Community College.
The Democratic Party, the dominant force in her county's politics, criticized LePore, 49, for refusing to add safeguards to new touch-screen voting machines that would generate a paper trail for use in the event of a recount.
According to complete but still uncertified results from Tuesday's primary, LePore lost to Arthur Anderson by 5,533 votes out of more than 177, 000 cast. Anderson, 63, is an education professor at Florida Atlantic University and former member of the county school board.
Though the race was nonpartisan, Anderson was championed by Democratic U. S. Rep. Robert Wexler of Boca Raton, and boosted by campaign appearances by former Democratic presidential candidates Sen. Joe Lieberman and former Vermont Gov. Howard Dean.
------
On Wednesday, co-workers in the supervisor's office said LePore did not come to work. LePore began working in the county elections office in West Palm Beach as a file clerk 33 years ago.
"She's worked in that office since she was 16 years old. So this is a significant shock and a loss that's going to take some time to heal," spokesman Marty Rogol said.
LePore remains in office until January and therefore will oversee another presidential election.
-----
"Unfortunately, Ms. LePore did not help matters for herself because she never took responsibility," said Carol Ann Loehndorf, chair of the Democratic Party of Palm Beach County. "There was a continuous effort to blame the voters. "
If LePore had advocated additional technology to create a paper record for the new touch-screen machines -- which the supervisor purchased to prevent a repeat of the 2000 debacle -- Loehndorf said Democrats would probably not have challenged her this year.
Asked to explain his boss' defeat, Rogol blamed "residual anger from 2000 and the relentless effort by Congressman Wexler to defeat her."
Wexler, who has sued in state and federal court to demand that the touch- screen machines be modified -- so far to no avail -- paid for a barrage of TV ads against LePore and brought in Dean and Lieberman to stump for her rival.
------
On Wednesday, a problem with tallying absentee ballots delayed certification of Palm Beach County returns until today at the earliest. Rogol said 31,095 ballots were received, but that the counting machine for some unknown reason showed it tallied 37,839. A recount was ordered. Rogol said he did not believe the county's latest election-related glitch would affect the final results.
Thursday, September 2, 2004
Solano County pays $415,000 to get out of e-voting contract
Associated Press, September 1, 2004
Excerpts:
Solano County paid $415,000 to get out of a contract with voting equipment manufacturer Diebold Inc., and county officials will instead buy $4.2 million in new equipment from a rival company.
Deputy County Counsel Wendy Getty said the county reached a settlement Aug. 16 with Diebold. The North Canton, Ohio-based company installed nearly 1,200 paperless touchscreen voting machines throughout the county after winning the contract in 2002.
The county was one of dozens across the country that opted for electronic ballots to avoid problems with "hanging chads" that plagued the 2000 presidential election.
But in May, California Secretary of State Kevin Shelley banned the type of machines used in Solano and three other counties after discovering uncertified software and other problems that potentially "jeopardized" the outcomes of the March presidential primary and other elections.
--------
After the secretary of state's discovery, Solano County voter registrar Laura Winslow, a staunch defender of touchscreen voting systems, resigned.
Last week, the county sent about $4 million worth of Diebold Accu-Vote TSx machines back to a company office in McKinney, Texas. Diebold offered to replace the banned machines for free with its own optical-scan systems, which include a paper ballot.
County officials rejected the offer, opting to buy new equipment from Diebold rival Election Systems & Software Inc. for nearly $4.2 million, Solano County Chief Information Officer Ira Rosenthal told the Fairfield-Suisun City Daily Republic.
Solano County residents will use ES&S optical-scan equipment in November.
Excerpts:
Solano County paid $415,000 to get out of a contract with voting equipment manufacturer Diebold Inc., and county officials will instead buy $4.2 million in new equipment from a rival company.
Deputy County Counsel Wendy Getty said the county reached a settlement Aug. 16 with Diebold. The North Canton, Ohio-based company installed nearly 1,200 paperless touchscreen voting machines throughout the county after winning the contract in 2002.
The county was one of dozens across the country that opted for electronic ballots to avoid problems with "hanging chads" that plagued the 2000 presidential election.
But in May, California Secretary of State Kevin Shelley banned the type of machines used in Solano and three other counties after discovering uncertified software and other problems that potentially "jeopardized" the outcomes of the March presidential primary and other elections.
--------
After the secretary of state's discovery, Solano County voter registrar Laura Winslow, a staunch defender of touchscreen voting systems, resigned.
Last week, the county sent about $4 million worth of Diebold Accu-Vote TSx machines back to a company office in McKinney, Texas. Diebold offered to replace the banned machines for free with its own optical-scan systems, which include a paper ballot.
County officials rejected the offer, opting to buy new equipment from Diebold rival Election Systems & Software Inc. for nearly $4.2 million, Solano County Chief Information Officer Ira Rosenthal told the Fairfield-Suisun City Daily Republic.
Solano County residents will use ES&S optical-scan equipment in November.
The trouble with e-voting - Aug. 30, 2004
By Paul R. La Monica, CNN/Money Magazine, August 30, 2004
Excerpts:
Considering all the controversy about hanging chads and butterfly ballots four years ago, you would think a company that makes electronic voting machines would have a banner year in 2004.
But for Diebold, the largest manufacturer of touch screen voting machines, that hasn't been the case.
-----
Mike Jacobsen, a spokesman for Diebold said that Diebold has never had security lapses with any of its voting machines but that it has nonetheless taken extra steps during the past few months, including adding enhanced encryption technologies, to ensure that there are no problems this November.
Jacobsen said that between 8 million and 9 million registered voters in parts of Georgia, Maryland and California would be using its machines this November. He added that the federal government would hopefully issue more guidelines about standards for electronic voting, including the need for a paper trail, in the coming months.
-----
Analysts estimate that Diebold controls about 50 percent of the electronic voting machine market, which could generate between $1 billion and $2 billion in revenues over the next few years.
Sequoia Voting Systems, owned by British printing firm De La Rue, and Election Systems & Software (ES&S), a private company based in Omaha, are two of Diebold's top competitors in this business.
But what's more frustrating for investors is that the focus on the relatively small election systems business has overshadowed Diebold's strong position in ATMs and security devices.
"The election controversy has had a negative impact on Diebold's stock," said Kartik Mehta, an analyst with FTN Midwest Research. "The remaining 97 percent of the business is doing extremely well."
------
But Franklin's Taylor wonders whether it's worth the hassle for Diebold to stay in the election terminal business. He thinks that even though the company has now barred executives from engaging in political activities, that won't completely silence the company's critics.
"If you get into next year and Diebold's ownership is still a problem, the company should be able to sell it. I don't think they are absolutely wedded to the voting machine business," said Taylor.
Jacobsen said, however, that Diebold is committed to the election systems business, pointing out that there is also strong potential for growth internationally. Diebold has a subsidiary in Brazil that makes voting machines used in that country.
Excerpts:
Considering all the controversy about hanging chads and butterfly ballots four years ago, you would think a company that makes electronic voting machines would have a banner year in 2004.
But for Diebold, the largest manufacturer of touch screen voting machines, that hasn't been the case.
-----
Mike Jacobsen, a spokesman for Diebold said that Diebold has never had security lapses with any of its voting machines but that it has nonetheless taken extra steps during the past few months, including adding enhanced encryption technologies, to ensure that there are no problems this November.
Jacobsen said that between 8 million and 9 million registered voters in parts of Georgia, Maryland and California would be using its machines this November. He added that the federal government would hopefully issue more guidelines about standards for electronic voting, including the need for a paper trail, in the coming months.
-----
Analysts estimate that Diebold controls about 50 percent of the electronic voting machine market, which could generate between $1 billion and $2 billion in revenues over the next few years.
Sequoia Voting Systems, owned by British printing firm De La Rue, and Election Systems & Software (ES&S), a private company based in Omaha, are two of Diebold's top competitors in this business.
But what's more frustrating for investors is that the focus on the relatively small election systems business has overshadowed Diebold's strong position in ATMs and security devices.
"The election controversy has had a negative impact on Diebold's stock," said Kartik Mehta, an analyst with FTN Midwest Research. "The remaining 97 percent of the business is doing extremely well."
------
But Franklin's Taylor wonders whether it's worth the hassle for Diebold to stay in the election terminal business. He thinks that even though the company has now barred executives from engaging in political activities, that won't completely silence the company's critics.
"If you get into next year and Diebold's ownership is still a problem, the company should be able to sell it. I don't think they are absolutely wedded to the voting machine business," said Taylor.
Jacobsen said, however, that Diebold is committed to the election systems business, pointing out that there is also strong potential for growth internationally. Diebold has a subsidiary in Brazil that makes voting machines used in that country.
Diebold Learns What Edison Knew: Voting Machine Sales Are Tough
By Bob Drummond, Bloomberg News U.S., September 1, 2004
Excerpts:
Diebold Inc. got off to a fast start in the voting machine industry. After almost 150 years of making safes, bank vaults, jailhouse doors and, more recently, automated teller machines, Diebold bought Global Election Systems Inc. and its AccuVote line of computerized voting terminals in 2002.
In a little more than three months, Diebold snared the biggest U.S. voting machine contract ever: a $54 million deal with the state of Georgia. ``It was successful beyond our wildest dreams, initially,'' says Diebold Chief Executive Officer Walden O'Dell, 59.
As the 2004 elections near, the euphoria has faded. Computer security experts at Johns Hopkins University in Baltimore and Rice University in Houston say Diebold's touch-screen voting machines are vulnerable to vote rigging; security concerns and operating flaws have led to a ban on their use in November in parts of California and Ohio.
Diebold's election system sales are headed for a second straight drop, to a company forecast of $75 million to $85 million, from $100 million in 2003 and $111 million in 2002.
Diebold, based in North Canton, Ohio, learned that it's tough in the U.S. to profit from elections -- a market that has bedeviled entrepreneurs since Thomas Edison tinkered with vote- counting machinery in the 1860s. ``We walked into a minefield,'' O'Dell says.
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Diebold shares have fallen 9.2 percent this year, compared with a 0.1 percent gain for the S&P Midcap 400. The decline came even though ATM sales and services, which account for 70 percent of Diebold's revenue, rose 16 percent during the first half of 2004.
Share prices didn't fall because of the company's financial performance, says Don Taylor, who manages $1.8 billion, including 524,000 Diebold shares, in the Franklin Rising Dividends Fund in Fort Lee, New Jersey. Investors are selling Diebold shares because the company makes touch-screen voting machines, he says.
``The voting machine business has been a disappointment since they got into it,'' Taylor says. ``I'd like to see them sell the business, personally, though I highly doubt that's going to happen.''
`A Crisis'
O'Dell, known as Wally, says he has no intention of selling the unit. He says he wants to help the U.S. solve a serious problem, not to help mischief makers fix elections. ``The country had a crisis,'' O'Dell says, sporting a navy blue tie spotted with U.S. flags.
``It was instantly apparent to me that we could help, that there was going to be money spent on the problem and that it was synergistic with what we were doing,'' he says. Diebold plans to stick with the voting machine unit regardless of profit, O'Dell says.
``They got more than they bargained for,'' says Kimball Brace, president of Election Data Services Inc., a Washington, D.C.-based consultant on voting equipment. ``A lot of people suddenly came into this market thinking, `Hey, let's get some of all this federal money they're going to spend.' And they found out this is a very demanding business.''
Profits from a hoped-for boom in voting machine sales after the 2000 election crisis have been elusive at other companies as well.
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The industrial age introduced mechanical voting machines. Those are the booths in which voters click levers to make their selections. After New York State amended its constitution in the 1890s to permit the debut of the lever-action machines, faith in new technology helped drive their acceptance.
``Should the tally of voters who entered the booth kept by the election inspectors and poll clerks not agree with the machine, the conclusion would be that fallible man was mistaken, and that the machine's record was accurate,'' Scientific American magazine reported on Nov. 24, 1894.
Punch-Card Ballots
Computers came onto the scene in the 1960s, after Joseph Harris, a political science at the University of California in Berkeley, came up with the idea of a voting machine that put holes in punch-card ballots that could be counted automatically.
The Harris Votomatic was first used in 1964 in California, Georgia and Oregon, according to a 1980 oral history interview with Harris, who died in 1985. International Business Machines Corp., which developed the punch card for other computer uses, bought the Votomatic company and stayed in the field only briefly.
It sold the rights in 1969 because voting machine makers were inherently targets of controversy and complaint, Harris said. ``All candidates believe that they are going to win, and if a new system is tried out, they will explain their failure to be elected by saying it was because the machine failed to function properly,'' he said.
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O'Dell may be right that citizens want new voting machines, but one thing that hasn't changed since Thomas Edison invented his vote counter is that it's tough to make voting in a democracy more efficient -- and make a profit doing it.
Excerpts:
Diebold Inc. got off to a fast start in the voting machine industry. After almost 150 years of making safes, bank vaults, jailhouse doors and, more recently, automated teller machines, Diebold bought Global Election Systems Inc. and its AccuVote line of computerized voting terminals in 2002.
In a little more than three months, Diebold snared the biggest U.S. voting machine contract ever: a $54 million deal with the state of Georgia. ``It was successful beyond our wildest dreams, initially,'' says Diebold Chief Executive Officer Walden O'Dell, 59.
As the 2004 elections near, the euphoria has faded. Computer security experts at Johns Hopkins University in Baltimore and Rice University in Houston say Diebold's touch-screen voting machines are vulnerable to vote rigging; security concerns and operating flaws have led to a ban on their use in November in parts of California and Ohio.
Diebold's election system sales are headed for a second straight drop, to a company forecast of $75 million to $85 million, from $100 million in 2003 and $111 million in 2002.
Diebold, based in North Canton, Ohio, learned that it's tough in the U.S. to profit from elections -- a market that has bedeviled entrepreneurs since Thomas Edison tinkered with vote- counting machinery in the 1860s. ``We walked into a minefield,'' O'Dell says.
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Diebold shares have fallen 9.2 percent this year, compared with a 0.1 percent gain for the S&P Midcap 400. The decline came even though ATM sales and services, which account for 70 percent of Diebold's revenue, rose 16 percent during the first half of 2004.
Share prices didn't fall because of the company's financial performance, says Don Taylor, who manages $1.8 billion, including 524,000 Diebold shares, in the Franklin Rising Dividends Fund in Fort Lee, New Jersey. Investors are selling Diebold shares because the company makes touch-screen voting machines, he says.
``The voting machine business has been a disappointment since they got into it,'' Taylor says. ``I'd like to see them sell the business, personally, though I highly doubt that's going to happen.''
`A Crisis'
O'Dell, known as Wally, says he has no intention of selling the unit. He says he wants to help the U.S. solve a serious problem, not to help mischief makers fix elections. ``The country had a crisis,'' O'Dell says, sporting a navy blue tie spotted with U.S. flags.
``It was instantly apparent to me that we could help, that there was going to be money spent on the problem and that it was synergistic with what we were doing,'' he says. Diebold plans to stick with the voting machine unit regardless of profit, O'Dell says.
``They got more than they bargained for,'' says Kimball Brace, president of Election Data Services Inc., a Washington, D.C.-based consultant on voting equipment. ``A lot of people suddenly came into this market thinking, `Hey, let's get some of all this federal money they're going to spend.' And they found out this is a very demanding business.''
Profits from a hoped-for boom in voting machine sales after the 2000 election crisis have been elusive at other companies as well.
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The industrial age introduced mechanical voting machines. Those are the booths in which voters click levers to make their selections. After New York State amended its constitution in the 1890s to permit the debut of the lever-action machines, faith in new technology helped drive their acceptance.
``Should the tally of voters who entered the booth kept by the election inspectors and poll clerks not agree with the machine, the conclusion would be that fallible man was mistaken, and that the machine's record was accurate,'' Scientific American magazine reported on Nov. 24, 1894.
Punch-Card Ballots
Computers came onto the scene in the 1960s, after Joseph Harris, a political science at the University of California in Berkeley, came up with the idea of a voting machine that put holes in punch-card ballots that could be counted automatically.
The Harris Votomatic was first used in 1964 in California, Georgia and Oregon, according to a 1980 oral history interview with Harris, who died in 1985. International Business Machines Corp., which developed the punch card for other computer uses, bought the Votomatic company and stayed in the field only briefly.
It sold the rights in 1969 because voting machine makers were inherently targets of controversy and complaint, Harris said. ``All candidates believe that they are going to win, and if a new system is tried out, they will explain their failure to be elected by saying it was because the machine failed to function properly,'' he said.
------
O'Dell may be right that citizens want new voting machines, but one thing that hasn't changed since Thomas Edison invented his vote counter is that it's tough to make voting in a democracy more efficient -- and make a profit doing it.
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