U.S. Reportedly Probing Chavez Link To U.S. Voting Machine Firm
A Treasury spokeswoman said the multi-agency Committee on Foreign Investments in the U.S. has contacted Smartmatic Corp., which owns Sequoia Voting Systems, but declined to confirm a formal probe. The Venezuelan government denies any role in the companies.
By Reuters , InformationWeek
Oct. 30, 2006
URL: informationweek.com
WASHINGTON (Reuters) - The U.S. government is probing whether a takeover last year of a leading U.S. voting machine maker by a software company with links to Venezuela gave President Hugo Chavez's leftist government control over its operations, the New York Times reported Saturday.
The Committee on Foreign Investments in the United States, a multi-agency panel that approves or rejects foreign takeovers, is conducting a formal inquiry into Smartmatic Corp. and its subsidiary Sequoia Voting Systems, which is based in Oakland, Calif, the Times reported in its online edition.
Smartmatic and the Venezuelan government officials have strongly denied that Chavez -- a longtime foe of the Bush administration -- has any role in Smartmatic, the Times said.
A U.S. Treasury Department spokeswoman declined to comment in the Times story on whether CFIUS was conducting a formal probe, but did confirm the panel had contacted the company.
Venezuela hired Smartmatic to replace its election machines ahead of the August 2004 referendum that tapped Chavez as president, the newspaper said.
In March 2005, Smartmatic used the $120 million profit from its Venezuela deals to buy Sequoia, which has installed voting equipment in 17 U.S. states and the District of Columbia, it said.
Before that, a Venezuelan government financing agency invested more than $200,000 in a technology company that had some of the same owners of Smartmatic, which joined Smartmatic as a minor partner in the bid.
In return, the Venezuelan agency took a 28 percent stake in the smaller company and a seat on its board of directors, the Times said. An unnamed, senior Venezuelan official who had previously advised Chavez on election technology occupied the board seat.
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