The Department of Justice’s Anti-trust division has determined that the purchase of Premier Election Solutions, Diebold Inc.’s recently renamed e-voting division, by Election Systems & Software, Inc. (ES&S), has resulted in a voting machine monopoly. The DoJ and nine states that have joined in a lawsuit are suing to require ES&S to divest of the assets gained in the bargain-basement priced purchase of Diebold’s e-voting outfit last September.
The merger with Diebold/Premier, ES&S’s second largest competitor, had given ES&S, a private corporation which already controlled some 50% of U.S. elections with its electronic voting systems, a full 70% control of the votes cast in this country. The acquisition had been opposed by election integrity organizations, Hart Intercivic (a much smaller Austin-based competitor), the New York Times’ editorial board, and U.S. Sen. Chuck Schumer (D-NY) in his capacity as chairman of the Senate Rules Committee, and was being investigated by 14 different states along with the DoJ’s anti-trust division…
A settlement has been struck, pending approval by a federal judge, between the DOJ, nine states, and ES&S requiring that the private company find a DoJ-approved purchaser of the Diebold/Premier assets. Prior to the $5 million sale to ES&S, Diebold had been searching for a buyer for a number of years, even as it faced investigations by the SEC and the DoJ, share-holder class action suits, and a number of legal battles with states and country jurisdictions around the country after voting systems were found to have failed or in violation of federal and state standards. Diebold purchased the election division from Global Election Systems in 2002 for the price of $25 million.
The proposed settlement, signed by the DoJ, ES&S, and representatives of state attorneys general in Arizona, Colorado, Florida, Maine, Maryland, Massachusetts, New Mexico, Tennessee, and Washington has been posted here [PDF].
An AP report on the potential lawsuit by the DoJ last week noted that “As a privately held company, ES&S issues no financial reports. It didn’t tell the Justice Department about the Diebold deal because the transaction wasn’t big enough to trigger the federal law that requires the government to be informed of big mergers before they are completed.”
The article added that a Congressional Research Service report found the merger had given ES&S “a presence in 90 percent of the states” making it the “sole source” for election systems in “at least 20,” given them “a market share three or more times that of its closest competitor.”
AP’s coverage of today’s news can be found here.
The DoJ-ordered unwinding of the merger, however, will do little to ensure the accuracy or ability of citizens to oversee their own elections run on unobservable, easily manipulated, oft-failed electronic voting systems which use secret software made by private corporations to count votes in our public elections.
Just one recent example of the dangers of easily manipulated e-voting systems made by ES&S, Diebold, and others can be found in the current federal trial, now ongoing in Clay County, KY, of six top election officials who are alleged, as we reported last week, to have manipulated election results by flipping votes on ES&S voting machines, without the knowledge of voters, as part of a decades-long election rigging scheme.
UPDATE: The DoJ’s announcement of the requirement and proposed settlement is now posted here…
Interesting development. We’ll see how it plays out. Hope it won’t be more spineless corporate sycophant contortions and gymnastics like those displayed by Democrats.
“A settlement has been struck, pending approval by a federal judge, between the DOJ, nine states, and ES&S requiring that the private company find a DoJ-approved purchaser of the Diebold/Premier assets.”
Whoa — I’m sure all the potential “DoJ approved purchasers” are taking numbers and lining up. NOT. Has anyone informed the DoJ that no such chumps exist?
Diebold is the company that recorded 16,22 NEGATIVE vptes for Gore in 2000, in Volusia County (Datona Beach) Florida. GORE HAD 16,000 MORE VOTES BEFORE VOLUSIA COUNTY WAS TALLIED THAN AFTER!! The whole staff of diedold should be hung. I believe they are an Israeli corporation, but I could be wrong on that!
@3,
That’s the Brad Blog chorus at work. Always helpful.
Now I am glad that I am so old, because I have at least some memories of what America was like when it was a free country and not a police state.
this is a win for the good guys,
blackboxvoting.org has reported a list of special protected people (from diebold) that ess had to guarentee life time positions to ( imaybe over simplifiying that read bev great report for urself) but here is the list:
So here you go: The Diebold “special persons” list:
Larry Calvert
Robert Chen
Ken Clark
John Davenport
Randy Deabenderfer
Lois Doneson
Alex Guedea
Jessica Hiner
Talbot Iredale
Troy Lanier
Steve Moreland
Tim Murawski
Robert Pelletier
Ian Piper
Mark Radke
Kathy Rogers
Ross Underwood
Archie Williams
Brad,
(I’m looking for leverage here for more volume and more action by the DOJ…)
Since these are fabulous news and DOJ has unexpectedly gone in the appropriate direction on this, can you post a link on this article pointing to several of the egregious results or egregious actions by Diebold, ES&S, and other electronic voting machine companies that we can point out to Attorney General Eric Holder that would impel him to criminally go after ES&S and Diebold?
I would like to see a petition or letter to the DOJ we could sign onto and Twitter to demand investigations and prosecutions.
Is this something you can put together?
Or at least point us to a list of affronts so we can write to Attorney General Eric Holder at AskDOJ@usdoj.gov
Thanks,
Pat
Don’t think this will shake out as a win for the people.
Farking @ #3 –
Diebold is an American company, founded and still headquartered in Ohio since 1859.
Here’s a quick analysis of the possible impact of the USDOJ antitrust decision:
The acquisition by ES&S of Diebold’s Premier Election Solutions has been (supposedly) nixed by the US Department of Justice on antitrust grounds. However, the DOJ erred by not acting promptly to protect the Premier Elections operation from being gutted by ES&S.
The Dept. of Justice claims that the deal flew under the radar so they couldn’t stop the pillaging of Premier in time. That’s not the case. The records will show that the Dept. of Justice had received — and acknowledged — formal complaints in time to put a protective halt on the mass firings of Premier employees.
HERE’S WHY THIS ERROR IS SO SIGNIFICANT:
The USDOJ failed to act to protect the assets of Diebold’s Premier Elections unit, resulting in the problem that they now cannot mandate full divestiture of Premier by ES&S, and instead have ordered ES&S to remove itself from Premier’s current locations only partially — or perhaps, not at all.
That’s right. If the acquisition were to stand, ES&S would have over 70% market share. But under the current Dept. of Justice decision, ES&S may still end up with over 70% market share.
Here’s why: Because ES&S gutted Premier and fired over 100 employees, no other entity can swoop in to acquire an intact company. According to my sources inside Diebold, the Diebold corporation has no intention whatsoever of taking its Premier Elections unit back. Diebold Inc. considers the current situation to be ES&S’s problem.
If another entity were to step in and buy the gutted Premier entity, they would not have enough support staff to service the accounts.
We are in the midst of an election year, with primaries coming down the road pell-mell. Counties with the Premier equipment still need to run their elections. Under the USDOJ decision, they can choose to sign with ES&S to take over their election support, or they can opt to wait and sign with an “acquirer” — an entity that does not yet exist. The expedient action will most likely be to sign with ES&S.
THIS LEAVES THE FOLLOWING POSSIBILITIES:
a) Most or all current Premier voting systems customers may sign with ES&S to support their Premier equipment, because they have elections coming up. Firm deadlines with no other support available could effectively force counties to sign with ES&S.
b) Hart Intercivic or Sequoia might step in to become the “acquirer”, and under the USDOJ agreement the “acquirer” can scramble around trying to re-hire the Premier employees that were let go months ago. Hart and Sequoia could use their existing staff to help handle election support pressure, which will be intense.
c) One or some of the subcontractors, like LHS Associates (northeast U.S.) or GBS (midwest) could expand into servicing and controlling more states. They may be licking their chops on this. In other words, LHS Associates could say “Hey, Pennsylvania, whether or not any “acquirer” shows up to buy ES&S’s divestiture of Premier, we’ll support you with your existing equipment.”
d) Some crony of ES&S, possibly waiting in the wings all along, could step in and may perhaps have already networked with former Premier employees to take over in the event of an antitrust rollback. Since we still don’t know who actually owns ES&S, and we won’t necessarily know who owns some new “acquirer” entity if it is privately held. Who knows, it could even be the same guys who are quietly involved in ES&S.
e) A group of angel investment bankers may jump in and theoretically that could be an opportunity for the citizenry to jump on this to form a kind of public utility. Don’t hold your breath on this outcome, which might be cool but would scare the pants off some of the dirtier players in the elections industry.
BRC VOTING MACHINE ANTITRUST SITUATION, REVISITED
This proposed agreement has similarities to the 1997 deal when ES&S got into antitrust problems after buying a massive voting machine company called Business Records Corp. Under the antitrust order, ES&S was allowed to service existing accounts and Sequoia was allowed to sell and service new accounts.
The current USDOJ decision allows ES&S to service existing accounts, but only an “acquirer” can sell new Premier equipment (if anyone even wants it!)
If any jurisdiction wants to replace more than 50% of its existing voting system with new Premier stuff, they can’t go to ES&S for the new stuff, but have to buy it from the “acquirer” instead. So, it would make sense for Hart or Sequoia or one of the subcontractors like LHS Associates to jump in to grab the cash on new equipment sales. Essentially, this would only rearrange the deck chairs, and the US elections industry would remain overconcentrated.
ROLLBACK OF THE NONDISCLOSURE AGREEMENTS
One interesting situation: Former Premier employees and the ES&S employees who were involved with supporting the Premier product line recently will be released from their noncompete and nondisclosure agreements.
The decision doesn’t seem to cap or limit that requirement, from what I can see. So the potential for spilling some more beans exists.
Brad, I credit YOU with getting this entire mess publicized and getting the ball rolling on sorting it out. Thank you, thank you, thank you. You are a TRUE patriot, not a fake one (you know who I’m talking about!) that has to cheat to win. Again, Thank You!! Because of you, we may someday actually have fair elections!!
PatG in SD:
Once such campaign that I hope YOU will help get involved in is VR’s DieboldReturnOurMoney.com campaign which does exactly what you’re calling for, at least beginning in California!
Please spread the word!
[Disclosure: The BRAD BLOG is a co-founder of VR and helped to launch the campaign some months ago!]
Bev,
Thank you for the analysis.
With all the turmoil Bev describes, is it not possible to create a letter/petition to send to each Registrar of Voters or Secretary of State demanding a replacement of the electronic voting machines with paper ballots and to hand-count them at each precinct? Would this not be a propitious time to try this? Someone that knows how to get this going viral on the social media might be able to help build volume.
Brad or Bev might write the missive, and we could include the links to each county’s Registrar of voters or Secretary of State or whoever might have the power to make this decision.
Years ago, I had gathered links like this. I am not sure if I could locate them again. Still, it’s something we could try.
Oops. Brad, looks like our messages collided.
I was not aware of a recent campaign from you. Has the DieboldReturnOurMoney.com campaign been advertised widely? How much volume has it generated?
I wish we could get some national agency like ACLU or PFAW enlisted to say electronic voting/counting are unconstitutional due to total control by a 2-3 corporations.
Brad reports:
And that’s why the entire anti-trust issue is a side-show.
Does it really matter whether our elections are entrusted to one crooked company with proprietary source codes which can hide wholesale thefts of elections or five?
I know Brad favors doing so on pilot project basis, but, for me, the idea of verifiable democracy should not have to wait for the obvious to be proven. Trash all e-voting systems — both optical scans and DREs. Use paper ballots to be hand-counted in each precinct before representatives of all parties and the press and publicly record and submit the precinct-by-precinct count to election central, where the precinct-by-precinct count can be verified and then added as a whole.
I mean, come on! The simple act of counting is not rocket science!
In 2010 the Repubs are going to try anything they can think to win back seats to gain control of Congress …. looking back at 2004 and knowing it was illegal tabulations in Ohio that gave Bush 4 additional years to put our country in debt, now is the time to cure this possiblity nationally!