One of the world’s largest ATM manufacturers and, formerly, one of the largest manufacturers of electronic voting systems, has been indicted by federal prosecutors for bribery and falsification of documents.
The charges represent only the latest in a long series of criminal and/or unethical misconduct by Diebold, Inc. and their executives over the past decade.
According to Cleveland’s Plain Dealer, a U.S. Attorney says the latest charges are in response to “a worldwide pattern of criminal conduct” by the company….
The two-count criminal information and deferred prosecution agreement calls for Diebold to pay nearly $50 million in penalties: $23 million to the U.S. Securities and Exchange Commission, and $25 million to the Department of Justice.
The agreement with federal prosecutors also calls for the implementation of rigorous internal controls that includes a compliance monitor for at least 18 months. The government agreed to defer criminal prosecution for three years, and drop the charges if Diebold abides by the terms of the agreement.
Despite at least $1.75 million in bribes said to have been paid the company around the globe, nobody will go to jail for what U.S. Attorney Steven Dettelbach describes as their “worldwide pattern of criminal conduct,” because they are a corporation — and you are not.
The $50 million the company has agreed to pay is a mere fraction of the firm’s $3 billion in annual revenues. That, even though Diebold is a repeat offender — which may be describing it mildly…
In 2010 the company settled an SEC fraud suit for $25 million. They also admitted in 2008 that they had overstated 2007 election division revenue by some 300% in hopes of manipulating stock prices.
As early as 2004, thanks to documents leaked by a whistleblower, it was discovered that Diebold had illegally used uncertified hardware and software in California election systems and planned to lie about it to state investigators. The e-voting systems, repeatedly found over the years to be easily hacked, were decertified for use by the state at the time (though they are still used widely around much of the country today.)
Still, nobody went to prison for any of Diebold’s crimes.
Their most notorious infamy was tied to their often bumbling work as the nation’s second largest e-voting company, which produced wildly insecure and often inaccurate voting systems and tabulators and which they proved willing to lie about. The Ohio-based firm first attracted the notice, and ire, of Democrats in 2003 when its then CEO, Walden O’Dell, penned a fundraising letter on behalf of George W. Bush and the Republican Party, promising that he was “committed to helping Ohio deliver its electoral votes to the president next year.”
O’Dell, who many had blamed for Diebold’s flagging stock prices and the sullying of the company’s otherwise-excellent 150-year old reputation, was eventually forced to resign for “personal reasons” in late 2005. He was later required to pay back some $470,000 as part of the SEC’s 2010 lawsuit after it had been found that Diebold had “manipulated the company’s accounting to meet earnings forecasts from 2002 through 2007.”
In 2007, Diebold, Inc., after nearly two years of attempting to sell off their elections division, renamed that portion of their business to Premier Election Solutions. Eventually, Premier, the second largest voting machine company in the country at the time, was sold to ES&S, the nation’s largest. In turn, the U.S. Dept. of Justice forced ES&S to sell off many of the assets from the Diebold/Premier acquisition in response to anti-trust concerns. Those assets were eventually purchased by the Canadian firm, Dominion Voting which has since become the second largest voting machine company in the U.S. after their subsequent purchase of Sequoia Voting, a firm tied for years to the late Venezuelan President Hugo Chavez.
Diebold’s Chief Financial Officer and Executive Vice President, Kevin Krakora, stepped down in 2009 amidst the SEC’s investigation at the time. As The BRAD BLOG reported exclusively in 2007, Krakora had been the top beneficiary of an apparent round of insider trading by a number of Diebold executives who unloaded hundreds of thousands of dollars worth of company stock just before the announcement of the Diebold/Premier name change, and the subsequent plummeting of the parent company’s stock price. In a mass sell-off, Krakora and other executives sold their shares at more than $53/share, a near-historic high, just prior to the price plunging more than 50% on the announcement of the elections division spin-off. Diebold, Inc.’s price has never recovered from the 2007 sell-off. It closed at less than $30/share on Wednesday.
The Plain Dealer reports that court documents filed this week by the U.S. Justice Department allege executive and company employees from Diebold’s Asia Pacific region paid “$1.75 million in bribes, gifts and trips to dozens of employees of banks in China and Indonesia”…
Diebold attempted to disguise the payments and benefits in various ways, including by making payments through third parties designated by the banks, and by inaccurately recording leisure trips for bank employees as “training.”
The court documents also accuse Diebold employees, over a four-year period, of creating and entering into false contracts with a distributor in Russia for services that the distributor was not performing. The distributor, in turn, used the Diebold funds to pay bribes to employees of Diebold’s privately-owned bank customers in Russia in order to obtain and retain ATM-related contracts with those customers.
Despite their years-long global crime spree, it seems Diebold will receive yet another slap on the wrist, and another polite request to please not to do that again. You and I should be so lucky next time we run into repeated trouble with the law. Good luck with that.
Let’s not forget that in May 2002 Georgia Secretary of State Cathy Cox, a Democrat, signed a contract that essentially privatized the Peach State’s public election system and placed it into the hands of this criminal organization.
Chris Hood, a former Diebold contractor turned whistleblower told RFK Jr. that Diebold’s then President Bob Urosevich instructed Diebold employees to install a memory card “patch” capable of adjusting “everything to the preferred election results…programs [that] can include a built-in delete that erases itself after it’s done.”
Oh my lord! Whoda thunk it? This news kinda blows my mind.
And of course nobody will go to jail. Nobody went to jail for subverting, perverting, and disconcerting our elections, so why should they go to jail for bribery?
Right you are Steve Heller, meanwhile there’s the flip side in which Don Siegelman has become a political prisoner.
Diebold’s US electorial activity should also be looked into. The CEO was quoted as saying in 2004 that he would “assure a Bush victory.”
If they are dirty enough to bribe, I’m sure they are dirty enough to steal elections.
Please quit using references to the late Hugo Chavez as code for something nefarious. You are playing into the lies that the Chavez government stole the elections they rightfully won, and that his party did not lawfully win elections in Venezuela. It would be far more accurate to remind readers that ES&S was founded by former Senator, and current Sec. of Defense Chuck Hagel, who used the machines to “win” two Senatorial elections in Nebraska under suspicious circumstances. As near as anyone can tell, Chavez’ victories were totally above board and valid, and those claiming election theft are part of the sore loser wealthy and privileged class who can’t stand to lose to the poor and dispossessed.
Remember President of Diebold telling GW Bush “I guarantee you Ohio”? Large paper with good record reporting exit interviews had Kerry winning Ohio by 16 points.
Bush won by 16 points. This was vote rigging.
It was rigged in North Carolina
I voted a straight D. On review all came up R.
Computers rigged?
“The voters decide nothing, the vote counters [at Diebold] decide everything.” – Stalin
Gendebs: Brad never suggested that the late Hugo Chavez had done anything to alter the outcome of any U.S. election.
Instead, he simply set forth, in a fact-accurate manner, the fact that Sequoia Voting Systems had ties to the former Venezuelan President’s government.
The fact that a Venezuelan company still retains a proprietary interest in the IP rights of computer systems now privately owned by a Canadian company that has been entrusted to privately run what are supposed to be “public” U.S. elections is a structural arrangement that should concern all who desire transparency and integrity in the conduct of our electoral process. Transparency and integrity are essential to meaningful democracy.
I agree on the Chavez reference. Didn’t quite catch what was being insinuated. Perhaps a link to an article investigating that tie would be helpful.
Lest we forget, it’s the same over-the-top, greedy, mobster, elections-to-the-highest-payer mindset that still abound today, especially with Diebold’s supposed original “competition”, ES&S. Both Diebold and Elections Systems and Software in the beginning, each had one Urosevich brother at or very near the top. At the time of the forced DOJ “sell-off” (after Diebold had tried squirming out of the bad deeds/bad press and profit losses by offshooting and changing the name of their election division to Premier) ES&S did many “questionable things to grab the “maintenance agreements” for most of the old Diebold machines/systems – which were actually “old” with ancient, incompetent technology when they had been originally sold across the US (with Republican legislators’/HAVA’s help) in early 2000s.
That arrangement conveniently took ES&S, also with its own ancient technology, out of monopoly spotlight; but still allows them inside and inside the coding and software for a majority of election systems across the US/ still able to do any requested dirty work, when “properly” paid for. Also ES&S gave essentially “lifetime contracts” to Diebold elections systems managers who had been well-schooled in the Diebold “untruthful” ways.
Those maintenance agreements are further excellent deals (for them)- lets ES&S charge millions annually from each jurisdiction, who became highly dependent on the makers of theirs and Diebold’s equally massively overpriced, proprietary junk locals are still stuck with – for want of money & by contract restrictions, including overarching confidentiality restrictions, as well – with minimal need for R&D or certification costs to make any improvements. Millions, upfront, per jurisdiction, mostly for one superficial visit of their techs per year. Most other problems cost extra – usually with price tag of at least $150/hr per person plus travel, for multiple people who might appear and spend most time on phone and with own email and pricing out what that jurisdiction absolutely needs to buy next….
The company pays well for buying up active and “successful” federal and state lobbyists nationally, and they buy up any independent businesses with whom jurisdictions may have found much greater success to produce elections on time, such as local printing companies for op scan ballots. Hey, it’s only the taxpayers’ money in the trough at which they unceasingly stuff themselves – so spend a little to keep it all tied up in neat little secret balls, to assure continued stuffing.
And they’re still out there slinging their stuff, trying to represent their still, by most measures, ancient, elephantine “stuff”, while of course talking about their years of experience – which in essence, was never good or reasonable, and has not changed. It’s still the same (originally shared with Diebold) seemingly criminal mindset.
Genedebs said @ 6:
“As near as anyone can tell,” is a good way to put it. Venezuela uses a 100% unverifiable electronic system. Still, that’s not really the point, nor why I made the reference. As you can tell, it’s part of a paragraph on foreign ownership of our voting system (the graf refers to both Canada and Venezuela).
The even bigger problem than that, is that first Sequoia and then Dominion (which purchased Sequoia) lied about that, and about the fact that the IP for most of the Sequoia systems still in use across the country today is still owned by the Venezuelan company called Smartmatic.
We’ve covered that mess for years here, in great detail, often exclusively, and since Margot Paez @ 10 asked, I’ll note that I did link to several articles which investigated and detailed that point. But here are those links again (and there are many more here, if you search our site for “Smartmatic Sequoia”) this time with the article headlines included:
Let me know if you have any other questions, or need any more links. I’ve got lots of them. Many others are included within the articles cited above.
HUGE story breaking in Wisconsin about Scott Walker and criminal investigations — to protect the investigation (and not walker’s reputation), everything is very secretive.
BUT — if there is any legitimacy and integrity to the ongoing probes (and NO — this is not a “new” investigation as journal communication’s dan bice may have you believe) ELECTION INTEGRITY may be part of what is being examined.
As bradblog readers know from June 2012 — walker’s recall was STOLEN.
More here — all sourced and resourced with delicious linky-goodies!
Criminal Investigation(s) MUST Look At Election Fraud
I’m shocked, shocked I tell ya!
Seriously great writeup Brad!
Hey Brad, I ain’t going there tonight with ya. But I will say, Wacca is a wicked pitcher! From Picksburgh. Hang tough.
Steve Heller:
To paraphrase Leona Helmsley, “jail is for the little people”.
You should have been on Sixty Minutes, but even when Governor Don Siegelman was on the show, they missed the most important part of his story.
We all know by now that election fraud using machines is simply not talked about in this country.
Sort of nice to see the name Diebold being batted around in a criminal story. Maybe it’s time to change the banking division title, eh?
In the story’s photo at the top, It’s good to see that the correct finger is being used to gesture towards the Diebold voting machine.
I’m sorry, but this comment appears to be rooted in some ignorance. The way FCPA cases go: company cooperates with DOJ/SEC in order to avoid indictment and reduce fine per Sentencing Guidelines. The company conducts the entire investigation and hands over all key docs and makes key employees available for interviews. By the end, the DOJ has likely identified several mid- to high-level managers for whom it has ready-made cases, thanks to the evidence produced by company. People will go to jail, but there’s this thing called due process and jury trial that has to happen first, so lay off the teeth gnashing.
I have no problem questioning the validity or accuracy of electronic voting systems in general, or even any specific system. The real problem is that the fascist right uses any flimsy excuse to try and delegitimize Chavez’ Presidency and the continuing governance of his party since his death. They continue to proclaim that none of his victories -or those of his successor – were legitimate, and that the elections were fraudulent (pot calling kettle black). Your original article could be construed as being in sympathy with those accusations. The U. S. government and the U. S. hard right continues to argue that the Venezuelan government is not legitimate, and I have little doubt they plan to try another coup to bring it down at some opportune moment. They can’t stand to see a government in this hemisphere run for the benefit of the poor and dispossessed.
Although Brad Friedman has both explained at length his factually accurate Hugo Chavez reference and added links to prior articles that flush out context, Genedebs @19 continues to object to Brad’s reporting because Brad’s reporting could be misconstrued by the American right wing.
Genedebs, this is a site that prides itself on accurate, fact-based reporting. Almost anyone can choose to distort what is reported, but that really doesn’t alter the need for citizen journalists to objectively describe what has or has not taken place based upon verifiable facts.
To give you an idea how far off base you are when it comes to Venezuela, I would refer you to an article that, although it was written by me, was also edited and approved by Brad Friedman.
U.S. Government Demands Hand-Count of ‘Paper Ballots’ in Venezuelan Election, But Not Our Own.
I would hope that, after reading that article, you would return to this comment section and:
1) Admit you had erred, and
2) Apologize to Brad Friedman.
Kevin @ 17 said:
Thank you for noticing. 🙂
Zver Muzhik @ 18 said:
Please feel free to let me know when any of them “go to jail”. For that matter, feel free to shout out when any of them even face a trial. Also, let me know when trial or jail happens to those people from the 2010 case they also had to pay up for. I’ll be happy to come back here and correct the record when any of that actually happens.
Until then, teeth still appropriately gnashing.
Whoooooooooooooo WHOOOOOOOOOOOOO! Fucking diebold is part of the madmen design.
And Brad, he’s a maker no matter when the title comes…I say NOW. But, hey that’s just me a Pirate fan. 🙂
WOW check this out too! 🙂 0
http://www.democracynow.org/2013/10/25/as_us_faces_new_scrutiny_on
http://www.calyxpress.org/
Question:
How long does it take for a liberal to screw in a light bulb?
Answer:
As long as it takes.
Hey Larry, I had a cranky lanky come knocking on my door after 12 last night, because my dog was doing its job and barking at the deer. Now really, why did this asshole move to the country if he can’t take the sound of it. I am sooooo pissed.
Ancient:
Sorry, but you’re always above my head. 🙁
HATE TO SAY I TOLD YOU SO: Few are surprised the behavior of a corporation who:
1- strangely took losses to stay in the voting machine industry
2- suppressed their own paper receipt technology to throw elections into controversy
3 – had their machines revoked as unreliable (by Ohio, after the 2004 election)
3- donated to political parties!
Holder’s DOJ will sell justice to Diebold, the right-leaning purveyors of democracy-killing EVMs just like he will to Walmart and Halliburton, also all caught with slam-dunk evidence showing foreign bribes in violation of crystal-clear Foreign Corrupt Practices law.
More proof Obama does things backwards – if you prosecute first and determine guilt, you enable courts to levy huge fines on top of FULL reparations to all injured parties. That is more money and more deterrent, why would Obama continue Bush’s practice of putting the criminal first?
Brought to us by the deferred prosecution agreement, the practice of cutting the government in on the rip-off to keep the revolving door twirling…
Lest we forget, it’s the same over-the-top, greedy, mobster, elections-to-the-highest-payer mindset that still abound today, especially with Diebold’s supposed original “competition”, ES&S. Both Diebold and Elections Systems and Software in the beginning, each had one Urosevich brother at or very near the top. At the time of the forced DOJ “sell-off” (after Diebold had tried squirming out of the bad deeds/bad press and profit losses by offshooting and changing the name of their election division to Premier) ES&S did many “questionable things to grab the “maintenance agreements” for most of the old Diebold machines/systems – which were actually “old” with ancient, incompetent technology when they had been originally sold across the US (with Republican legislators’/HAVA’s help) in early 2000s.
That arrangement conveniently took ES&S, also with its own ancient technology, out of monopoly spotlight; but still allows them inside and inside the coding and software for a majority of election systems across the US/ still able to do any requested dirty work, when “properly” paid for. Also ES&S gave essentially “lifetime contracts” to Diebold elections systems managers who had been well-schooled in the Diebold “untruthful” ways.
Those maintenance agreements are further excellent deals (for them)- lets ES&S charge millions annually from each jurisdiction, who became highly dependent on the makers of theirs and Diebold’s equally massively overpriced, proprietary junk locals are still stuck with – for want of money & by contract restrictions, including overarching confidentiality restrictions, as well – with minimal need for R&D or certification costs to make any improvements. Millions, upfront, per jurisdiction, mostly for one superficial visit of their techs per year. Most other problems cost extra – usually with price tag of at least $150/hr per person plus travel, for multiple people who might appear and spend most time on phone and with own email and pricing out what that jurisdiction absolutely needs to buy next….
The company pays well for buying up active and “successful” federal and state lobbyists nationally, and they buy up any independent businesses with whom jurisdictions may have found much greater success to produce elections on time, such as local printing companies for op scan ballots. Hey, it’s only the taxpayers’ money in the trough at which they unceasingly stuff themselves – so spend a little to keep it all tied up in neat little secret balls, to assure continued stuffing.
And they’re still out there slinging their stuff, trying to represent their still, by most measures, ancient, elephantine “stuff”, while of course talking about their years of experience – which in essence, was never good or reasonable, and has not changed. It’s still the same (originally shared with Diebold) seemingly criminal mindset.
——————————————————————————–
That democrats have been so down with computer voting mystifies me.
Two races I’m pretty sure were flipped – Kerry/Bush 2004 and Demint /Cleland. Exit polls had the right spread only with the democrat ahead.
We need to get to paper ballots, strict custody of those ballots, verified and witnessed counting that is recorded. Then go to IRV and we might have the threat of a real democracy blooming.
Lisa M @ 30 said:
Umm…You think we have trouble counting and/or overseeing the results now? Just add the impossible algebra of IRV to the mix, and you’ll never really know who actually won or lost an election again, unfortunately.
Just ask some of the candidates and/or voters who have actually participated in IRV elections, particularly in those many places where they were tried, and then dumped for exactly that reason.
Thanks Larry for listening, I really just needed someone I believe in to complain to. Its been an intense year…thanks for still being here!
I tend to loiter at BradBlog, but nobody’s called the cops yet; plus I’ve learned a lot!