electionline.org electionreform briefing · 2019-06-23 · suite 210 washington,dc 20007...

BriefingIn the aftermath of the 2000 election, voting machines became the

focus of efforts to improve the nation’s elections. With the passage of

the $3.86 billion Help America Vote Act (HAVA), counties and cities

across the country started to consider replacing older voting machines

with newer technologies.

Nearly four years later, the results are in. Mindful of Florida’s punch-card

follies in 2000, many state and local officials acted, and as a result, mil-

lions of voters will cast electronic ballots in 2004, many for the first time.

The switch from antiquated and maligned systems to state-of-the-

art direct-recording electronic (DRE) systems has been increasingly

controversial and divisive. As many now realize, paperless

DREs eliminate the ballot “middle man” that characterizes

punch cards, optical scanner ballots and old-fashioned,

hand-counted paper ballots. The DREs themselves dis-

play the ballot, store the vote, and generate the tally—

all within their sleek cases.

With high-tech machines now handling more parts of

the election process, the attention of many political

observers, activists and voters has turned to the typically-

ignored voting industry — the companies that make, market

and maintain voting machines nationwide.

Introduction . . . . . . . . . . . . . 1

Executive Summary . . . . . . . .3

Political Activity and VotingMachine Manufacturers . . . .4

The Industry . . . . . . . . . . . . . 8

Voting System Procurement 12

Tables . . . . . . . . . . . . . . . . . .16

Methodology/Endnotes . . .22

The Business of Elections

electionline.org

INSIDE

ELECTION REFORMELECTION REFORM

A u g u s t 2 0 0 4

lectionline.org, administered by the Election Reform Information Project, is the

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and analysis on election reform.

After the November 2000 election brought the shortcomings of the American

electoral system to the public’s attention, The Pew Charitable Trusts made a three-

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reform information.

Serving everyone with an interest in the issue–policymakers, officials, journalists, schol-

ars and concerned citizens–electionline.org provides a centralized source of data and

information in the face of decentralized reform efforts.

electionline.org hosts a forum for learning about, discussing and analyzing election

reform issues.The Election Reform Information Project also commissions and conducts

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ferences where policymakers, journalists and other interested parties can gather to share

ideas, successes and failures.

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e

THE BUSINESS OF ELECTIONS

ELECTION REFORM BRIEFING 23

36 “State Plan for the State of Georgia,” July 24, 2003, p. 4.37 Ibid, p. 5.38 Lemos, Robert and Festa, Paul. “Fight over e-voting leaves electionplans as casualties,” CNET News.com, May 20, 2004.39 Press Release, “Secretary of State Heller Announces Direct RecordingElectronic Voting Machine Choice,” December 10, 2003.40 “Nevada Clerks say New Voting Machines Needed Now,” TheAssociated Press as published in The Reno Gazette-Journal, Nov. 28, 2003.41 Zetter, Kim. “E-Vote Printers’ High Stakes Test,” Wired, May 27,2004.42 Howard, Tommy. “Possible Suit Against Election Group on Hold,”Georgetown Times, April 9, 2004.43 From telephone interview with Kevin Tyne, Arizona deputy Secretaryof State, June 8, 2004.44 Ibid.45 “State Plan to Implement the Help America Vote Act,” June 16, 2003,p. 26.46 McCarthy, John. “Electronic Voting on Hold,” The Associated Press,July 17, 2004.47 Selweski, Chad. “Many Communities Won't Have New VotingMachines,” The Macomb Daily, May 7, 2004.

48 “Agreement Between the County of Santa Clara and Sequoia VotingSystems, Inc. for a Direct Recording Electronic Voting System,” April11, 2003.49 Hoffman, Ian. “Solano County Cans Diebold System,” ANGNewspapers, May 26, 2004.50 “Commonwealth of Pennsylvania State Plan,” July 31, 2003, p. 9. 51 electionline.org survey response, October 2003.52 electionline.org survey response, December 2003.53 Carr Smyth, Julie. “To Win Contract, Diebold Offers the State aCarrot,” The Plain Dealer, August 10, 2003.54 Seymour, LaChelle. “Company Disputes County's Voting MachinePreference,” The Advocate, November 23, 2003.55 Mallett, Kent. “County Chooses Voting Machines,” The Advocate,January 13, 2004.56 Ibid. “Voting Machine Contract at Risk,” May 13, 2004.57 DuPlessis, Jim. “Contract Protest Rejected,” The State, May 14, 2004.58 Indiana Secretary of State Press Release. “Indiana’s Quest InformationSystems Selected to Create Statewide Voter Registration System,” May19, 2004. 59 Saber Consulting Press Release. “Saber Consulting to Build VoterRegistration System,” August 8, 2003.

localities to make voting easier,more accurate and more accessible.The industry, after all, is not likeany other. It is concerned with themost important exercise of democ-racy.

The machines, much likeHAVA itself, were intended torestore voter confidence that wasshaken after 2000. In the last year,however, the voting machine indus-try as a whole has faced questionsthat seem to have done the opposite.

Embarrassing internal docu-ments have found their way into themedia. Campaign donations and lob-bying expenditures – not unusual forbusinesses of any kind but new tothe world of election reform – aresuddenly a hot topic for these com-panies. Security reports by expertsboth inside and outside governmenthave challenged DRE security andaccuracy. Nationally, a call for voter-verified paper audit trail to serve as abackup to electronic results, is find-ing receptive ears in state capitalsfrom Sacramento to Columbus. Insome cases, this new scrutiny has hadan impact on the companies’ bottom

In this eighth edition in elec-tionline.org’s series of ElectionReform Briefings, we take an in-depth look at the “business of elec-tions” – the market for electiongoods and services that is both thecause and effect of the HelpAmerica Vote Act (HAVA) of 2002.

Election companies, once rela-tively anonymous in the pre-2000days when election administrationwas not a front-page issue, havefound themselves at the center ofdebate.

In this environment, votingmachine companies continue to beput on the defensive, forced to justi-fy not just their products but theirway of doing business.

Many industries and workers’unions that have dealings with thefederal government are politicallyactive. For election machine manu-facturers to do the same is certainlynot unique.

What is unique, however, is thedelicate role that voting machinesplay in our democracy – particular-ly the new machines that werespecifically purchased by states and

line, belying the old adage that“there is no such thing as bad pub-licity,” perhaps leading some compa-nies to rethink their investment inthe election business.

This Briefing is intended to adddepth and breadth to the currentfocus on election companies byoffering information in several areas.

It provides a comprehensiveanalysis of the campaign financesand lobbying expenditures of sever-al of the largest companies. election-line.org aims to elevate the level ofdebate both by making it clear thatpolitical activity is commonthroughout the “business of democ-racy” and by placing each compa-ny’s individual activity in the overallcontext of political activity.

This briefing also details thehistory of the election businessfrom the late 19th century to thepresent, looks at the process bywhich state and local election offi-cials procure the companies’goods and services and examinesthe role of “home-state advan-tage” in procurement.


ELECTION REFORM BRIEFING2

Election companies, once relativelyanonymous in the pre-2000 days whenelection administration was not a front-page issue, have found themselves at thecenter of debate.



The once-overlooked election

industry has become the focus

of intense scrutiny in recent years

with the passage of the Help America

Vote Act (HAVA) and the promise of

nearly $4 billion in funds from

Washington to purchase new voting

machines, software and databases.

In the past two years, as con-

cerns over the security and reliability

of direct-recording electronic (DRE)

voting machines have increased, so

too has the public wariness over the

political activity of companies that

design, manufacture and maintain

them. Specifically, many press reports

and Web sites suggest a link between

DRE manufacturers and the

Republican Party, primarily owing to

the fundraising activity and state-

ments made by the CEO of the

largest election system company,

Diebold Inc., that he would help

“deliver Ohio’s electoral votes” to

President George W. Bush.

Electionline.org’s research found,

however, that there is no industry-

wide partisan trend to political con-

tributions among the largest election

system companies. While Diebold

and its executives gave more than

$400,000 to Republican candidates

and the party from 2001 to the pres-

ent, other companies, including

Election Systems & Software (ES&S)

and Sequoia Voting Systems gave a

slight edge to Democratic candidates

and party organizations.

Among other findings from 2001

to early 2004:

• Ohio-based Diebold Inc. con-

tributed $409,170 to Republicans

and $2,500 to Democrats.

• Nebraska-based ES&S and execu-

tives gave $21,900 to Republicans


• Contributions from California-

based Sequoia Voting Systems and

executives totaled $3,500 to

Republicans and $18,500 to

Democrats.

• Texas-based Hart InterCivic

and executives donated $3,250

to Republicans and $2,500

to Democrats.

In addition, Sequoia and ES&S

contributed $150,000 to an effort to

pass Proposition 41, California’s

Voting Modernization Bond Act of

2002, a bill that provided nearly $200

million for the purchase of new vot-

ing machines to replace punch cards

in the state.

While some campaign finance

reformers say any political contribu-

tion from a company dealing with

something as important as elections

can raise questions about credibility,

an organization representing manu-

facturers agreed that while company

contributions could raise concerns,

executives and other employees do

not have to,“give up their constitu-

tional rights” because of the industry

in which they work. The influence

those contributions have on procure-

ment is questionable based on some

case studies.

Furthermore, despite employing

lobbyists in 10 states, the extent of

the “home-state advantage” gained by

election machine manufacturers in

the procurement process in their

own state is not altogether clear. It

has worked to the advantage of some

companies in procuring contracts for

voter registration databases, but

clearly not for all voting machine

manufacturers seeking to sell their

products in their home states.

Executive Summary



MethodologyInformation for “Election Reform Briefing #8: The Business ofElections,” came from a variety of publicly available sources. They aredetailed by area of interest below:Vendor Campaign Contributions* Campaign contribution information as of May 31, 2004 was gathered

from reports available on the following websites: Federal ElectionCommission, PolticalMoneyLine, the Institute on Money in StatePolitics, the Center for Responsive Politics and individual state websites.

Voting Machine Vendor Officers and Directors* The names of company board members, directors and executives

between the years 2001 and 2004 were gathered through phoneinquiries, emails, Lexis/Nexis, Dun & Bradstreet reports, HooversOnline, Forbes.com company profiles, Yahoo.com Finance searchengine, individual state corporation and business entity searches,Google News search and the websites of Diebold, Inc., ElectionSystems and Software, Hart InterCivic, Sequoia Pacific VotingEquipment and VoteHere.

Registered State and Federal Lobbyist Expenditures andCompensation* All lobbyist compensation and expenditure reporting includes only doc-

uments filed electronically and made available online through individualstate websites. Not all states require lobbyists to file reports electroni-cally, nor do they make the information available online. Federal lobby-ists’ compensation and expenditure reports are not available online.Principal and lobbyists names were gathered from states that providethe information online.

All interviewed sources are listed in the endnotes. Their opinions – andthe opinions expressed in secondary source material – do not reflect theviews of the nonpartisan, non-advocacy electionline.org or the ElectionReform Information Project. All questions concerning research and methods should be directed toSean Greene at [email protected] or Elizabeth Schneider [email protected].

Endnotes1 Diebold Inc. CEO Walden O’Dell’s Republican fundraising letter about“delivering votes” to Bush is cited repeatedly as a prime example of thisconflict of interest. Others have gone further and suggested vote-fixing inthe 2002 Senate election in Georgia (which has never been proven.) Agood summary of these allegations can be found here: Campos, Carlos.“Critics punch at touch-screen security,” Atlanta Journal Constitution,February 14, 2004. 2 Keating, Dan. “Groups Rally for Voting Receipts,” The Washington Post,July 14, 2004.3 http://www.fec.gov/pages/vendorslist.htm (Federal ElectionCommission list of established vendors of computerized vote tabulationsystems as of February 20, 2003.) 4 Diebold did not purchase Global Election Systems which becameDiebold Election Systems until January 2002. However, 2001 numbersare included because as early as June 2001 there were reports of Diebold’spending purchase of Global Election Systems. For more information, see“Diebold to buy Global Election Systems in stock swap,” Dallas BusinessJournal, June 21, 2001.5 Campaign contribution information as of May 31, 2004 for all data inthis report was gathered from reports available on the websites main-tained by the Federal Election Commission, PolticalMoneyLine, theInstitute on Money in State Politics, the Center for Responsive Politicsand individual state websites that provide campaign contribution infor-mation online. 6 Berr, Jonathan. “Diebold's Voting Machine Expansion Rattles Investors,States,” Bloomberg News, May 21, 2004.7 “Diebold stops top executive from making political contributions,” TheAssociated Press, June 6, 2004. 8 Verton, Dan. "Effort afoot to address e-voting at convention,"ComputerWorld, July 26, 2004.9 For more information, see the Web site for California Secretary ofState Kevin Shelley. www.ss.ca.gov/elections.

10 Because of a combination of funding delays and concerns about thesecurity and reliability of DRE voting systems, none of Ohio’s 88 coun-ties will switch to touch-screen voting systems in time for the 2004 elec-tion. For more information, see: McCarthy, John. “Ohio counties notrushing to replace voting machines,” The Associated Press as reported inThe Cleveland Plain Dealer, July 9, 2004. 11 Secretary Shelley also blocked the use of Sequoia DRE machines (andall other DREs in the state) in 2004 pending the adoption of securitymeasures and the inclusion of paper-ballot options for voters in the 10counties using electronic voting machines. Riverside Registrar MischelleTownsend dropped a lawsuit against Shelley and the state’s DRE direc-tives in mid-July. For more information, see: Martin, Hugo and Mehta,Seema, “2 counties, state reach deal on e-voting machines,” The LosAngeles Times, July 14, 2004. 12 All lobbyist compensation and expenditure reporting include only doc-uments filed electronically and made available online through individualstate websites. Not all states require lobbyists to file reports electronically,nor do they make the information available online. Federal lobbyist’scompensation and expenditure reports are not available online. Principaland lobbyists names were gathered from states that provide the informa-tion online. 13 Smith, Erika. “Diebold Bans Execs’ Political Gifts,” The Akron Beacon-Journal, June 8, 2004.14 Shane III, Leo. “Election machine firm blasted,” The News-Messenger,August 28, 2003. 15 2 United States Code § 441c, 11 C.F.R. § 115.1(d).16 Rule G-37 Municipal Securities Rulemaking Board.17 Rosenberg, Alec. “E-voting profits no pot of gold,” Tri-Valley Herald,June 14, 2004.18 Ibid. 19 “Second Quarter Earnings Up at Diebold,” The Assoccciated Press, July21, 2004.20 “The Primary System: History of Voting Technology,” PBS.org OnlineNews Hour, December 13, 2003. 21 Jones, Douglas W. “A Brief History of Voting,” Department ofComputer Sciences, University of Iowa, 2001. 22 Dugger, Ron. “Annals of Democracy: Counting Votes,” The NewYorker, November 7, 1988. 23 From phone interview with Roy Saltman, election technology consult-ant, June 4, 2004. 24 Remarks by Professor Stephen Ansolabehere, Massachusetts Instituteof Technology to the National Conference of State Legislatures ElectionReform Task Force, April 2001. Available here: http://www.ncsl.org/pro-grams/legman/elect/taskfc/MIT.htm.25 Ackerman, Elise. “E-voting regulators often join other side when leav-ing office,” Mercury News, June 15, 2004. 26 Sequoia Voting Systems Press Release, “Assistant Secretary of StateJoins Sequoia Voting Systems, the Oakland-Based Provider of TouchScreen Voting Systems,” August 22, 2002. 27 Schweers, Jeff. “Time short to certify ballot software,” The Las VegasSun, May 28, 1996.; also see: Schweers, Jeff. “County adds 536 votingmachines,” The Las Vegas Sun, December 17, 1997. 28 For more information, see “About Us” at http://www.unilect.com/.29 “Lobbyist made money from touch screen sales,” The Associated Press asprinted in The St. Petersburg Times, October 6, 2002.30 Internet sites tracking conspiracy theories (this info came fromConspiracyPlanet.com but other sources have the same information) arequick to point out the estimate made by one anti-paperless voting advo-cate who noted that the Urosevich brothers’ respective employers makethe machines and software that will collect about 80 percent of the votescast in the country. 31 Bolton, Alexander. “Hagel’s ethics filings pose disclosure issue,” TheHill, January 29, 2003. 32 “Statement of Avi Rubin of Relationship with VoteHere Inc.,” MediaAdvisory, Headlines @ Hopkins, August 17, 2003.33 ITAA Press Release: “Companies Form Election TechnologyCouncil,” December 9, 2003. 34 ITAA Statement: First Hearing of the U.S. Election AssistanceCommission, May 5, 2004.35 Mark, Roy. “E-voting group united on security concerns,”InternetNews.com, December 10, 2003.



Hart InterCivic Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTFARMER, JOHN BOARD OF DIRECTORS NATL. ASSC. OF SMALL BUSINESS INVESTMENT CO. PAC 9-JUL $500

Hart InterCivic Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTHART, DAVID CHAIRMAN BENTZIN, BEN - CANDIDATE FOR SENATE R - TX 24-SEP $250

RIORDIAN, RICHARD - MAYOR LOS ANGELES R - CA 29-JAN $500CORYN, JOHN SEN. R - TX 12-JUN $1,000

KILCREASE, LAURA BOARD OF DIRECTORS WATSON, KIRK - CANDIDATE FOR ATTNY. GEN. D - TX 14-MAR $1,0009-AUG $1,000

STOTESBERY, BILL VP MARKETING WATSON, KIRK - CANDIDATE FOR ATTNY. GEN. D - TX 1-OCT $500REPUBLICAN $1,750DEMOCRAT $2,500TOTAL $4,250

Hart InterCivic Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTLUMMIS, FRED BOARD OF DIRECTORS BUSH-CHENEY 2004 R 23-FEB $2,000

Sequoia Voting Systems Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTBECKSTRAND, MARK VP NEY, ROBERT REP. R - OH 22-AUG $1,000SEQUOIA BROWN, WILLIE - CANDIDATE FOR STATE SENATE D - CA 08-NOV $3,000

REBUBLICAN $1,000DEMOCRAT $3,000TOTAL $4,000

Sequoia Voting Systems Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTSEQUOIA CALIFORNIA DEMOCRATIC PARTY D 11-JAN $2,500

DAVIS, GRAY GOV. D - CA 07-MAR $2,000FIREBAUGH, MARCO - ASSEMBLY MEMBER D - CA 18-JUL $5,000SHELLEY, KEVIN SOS D - CA 15-MAR $2,000YES ON PROP. 41 - VOTING MODERNIZATION ACT 25-JAN $100,000DEMOCRATIC STATE CENTRAL COMMITTEE OF CA D 11-JAN $2,500SAN JOSE SILICON VALLEY CHAMBER OF COMMERCE 19-AUG $5,000

BECKSTRAND, MARK VP TAFT, BOB GOV. R - OH 28-MAY $2,500REPUBLICAN $2,500DEMOCRAT $14,000OTHER $105,000TOTAL $121,500

Sequoia Voting Systems Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTSEQUOIA DIAZ, MANNY - ASSEMBLY MEMBER D - CA 31-JAN $1,500

SOUTH BAY AFL-CIO LABOR COUNCIL ISSUES 03-OCT $5,000SANTA CLARA & SAN BENITO COUNTIES 31-JAN $1,000BUILDING CONSTRUCTION TRADES COUNCILSF LABOR COUNCIL & NEIGHBOR IND. EXPENDITURE 10-OCT $600

DEMOCRAT $1,500OTHER $6,600TOTAL $8,100

Political Activity and Voting MachineManufacturers

As concerns over the securityand accuracy of electronic voting sys-tems have grown, some manufactur-ers of voting systems have also had tograpple with concerns over their roleand influence in partisan politics.

Over the past year, there havebeen a variety of reports by thepress, individuals and independentorganizations into campaign contri-butions made by voting machinevendors and their executives. Therehave been suggestions that thesedonations are at best conflicts ofinterest and, at worst, signs thatvoting machine companies mightattempt or already have attemptedto “fix” elections in which theirproducts are used.1

Some see a direct link betweenDRE manufacturers and theRepublican Party. Norman J.Ornstein of the AmericanEnterprise Institute told TheWashington Post that for someDemocrats, the election of 2000created, "enormous unease and dis-trust in the democratic process.You've triggered not very latent sus-picions and paranoia amongDemocrats and liberals more thanin conservatives.”2

The now-infamous quote byWalden O’Dell, CEO of Ohio-basedDiebold, Inc. promising to “deliver”Ohio’s electoral votes to PresidentBush has become ubiquitous in presscoverage of the issue. Those whohave charged the 2000 election was“stolen” point to O’Dell andDiebold as proof that the same willhappen again in 2004, except this

time with newer technology. In response to these reports and

allegations, plus general skepticismabout e-voting systems, six electionsystem companies - AdvancedVoting Systems, Diebold ElectionSystems, Election Systems &Software, Hart InterCivic, SequoiaPacific Voting Systems, and Unilect– formed the Electronic TechnologyCouncil in December 2003, underthe umbrella of the InformationTechnology Association of America(ITAA) to advance the interests ofthese manufacturers.

Harris Miller, president of theITAA, stated he agrees that CEOsof voting machine companies mak-ing political contributions “couldcreate concerns that the process willbe distorted.”

However, Miller believes whenit comes to others who work forvoting machine companies, it’s adifferent story.

“Why should individuals giveup their constitutional rights to givemoney if they work for a votingmachine company? There is noth-ing intrinsically wrong with individ-uals giving money,” Harris said.

Any contribution from mem-bers of such an industry could betoo much, said Meredith McGehee,a campaign finance reform advocate.

McGehee, president of theAlliance for Better Campaigns, agroup that, like electionline.org,recieves funding from The PewCharitable Trusts, said the nature ofthe business performed by votingmachine companies make political



2001-2003Contribution Summary

DIEBOLD SEQUOIA ES&S HART INTERCIVIC

■ REPUBLICAN■ DEMOCRAT■ OTHER

$179,233

$105,950

$126,137

$4,000

$121,500

$8,100 $10,000

$85,650

$6,800$500

$3,750 $2,0000

$50,000

$100,000

$150,000

$200,000

2001 2002 2003 2001 2002 2003 2001 2002 2003 2001 2002 2003


Partisan Contributions by Company,Board Members and Executives

2001 - 2003



past three years. Contrary to many conspiracy

theories that align voting machinecompanies with the Republican Party,voting machine companies are prag-matic in their political contributions.

In California, a state largelydominated by Democrats, votingmachine manufacturers have givento Democratic candidates. Similarly,in Republican-controlled Ohio, theGOP has been, by and large, theprimary recipient of voting machinecompany contributions.

Ohio-based Diebold, Inc.(which owns Diebold ElectionSystems) is most frequently cited asshowing partisan bias in its politicalgiving, and the numbers bear thisout. Figures show that the companywas the largest contributor of thevoting machine vendors to theRepublican Party, politicians andcandidates between 2001 and early2004.4 During this period, contribu-tions from Diebold and its executivestotaled $409,170 for Republicansand $2,500 for Democrats.5

Yet, these large numbers mask

two key differences betweenDiebold and its competitors: scopeof operations and transparency.

Scope of operations. Unlike itsrivals Election Systems & Software(ES&S), Hart InterCivic and SequoiaVoting Systems, companies that con-centrate solely on the manufacturingand distribution of voting machinesoftware and systems, Diebold Inc.engages in multiple business activi-ties with the majority of revenuestemming from the sale and mainte-nance of automatic teller machinesworldwide.6 Consequently, any analy-sis of Diebold’s political activity thatassociates every contribution with thecompany’s voting machine businessruns the risk of misleading the read-er.

Transparency. Moreover, unlikeits rivals, Diebold is a public com-pany and as such is much moretransparent in terms of corporateleadership. This, in turn, makes iteasier to identify and aggregatecontributions associated with thecompany. Also, the company’sbroader scope means that not allDiebold officers and directors whohave made political donations havea hand in the operation of the elec-tion systems division – in fact, manyplay dual roles in the company’sactivities. In addition, many of thecontributions are made by directorsnot involved in the day-to-dayoperation of the comapny.

Even Distribution Diebold aside, it appears that

political contributions by theother voting machine manufactur-ers are relatively small and fairlyevenly distributed between the twomajor parties.

Nebraska-based ES&S and itsexecutives made nearly equal dona-

activity especially troubling. “We all know that democracy

largely depends on the credibility ofthe process,” she said. “As youknow, there were rumors that themachines were going to be allrigged because [O’Dell] was a Bushcontributor. When you get to thisarea about the integrity of elections,it’s very important that there be noconflict of interest and no appear-ance of conflict of interest.”

Partisan GivingPreviously dominated by a

handful of companies, the marketfor electronic voting machines hasexpanded to 19 known vendorscompeting for multi-million dollarstate and local contracts.3

electionline.org’s analysis suggeststhat as the manufacturers joust formarket share around the country,there is no industry-wide partisantrend to political contributions.And, in fact, these contributionsmight not have been that significantin the burgeoning election machinemarket that has developed in the


DIEBOLD

$409,170

$2,500

SEQUOIA

$3,500

$18,500

ES&S

$24,550 $21,900

HART INTERCIVIC

$2,500 $3,250

TOTAL TO PARTIES

$48,050

$437,820

■ REPUBLICAN■ DEMOCRAT


Partisan Contributions Summary2001 - 2003



ES &S Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTES&S MARION COUNTY DEM. CENTRAL COMMITTEE D - IN 31-JUL $450

MADISON COUNTY DEM. CENTRAL COMMITTEE D - IL 24-JAN $250SENATE DEM. 2002 OF CT. D 21-JUL $250

CARBULLIDO, KEN DIRECTOR VIGIL-GIRON, REBECCA - SOS D - NM 13-DEC $2,500GROH, JOHN DIRECTOR NRCCC R 13-NOV $300MCCARTHY, MICHAEL DIRECTOR JOHANNS, MIKE GOV. R - NE 5-JUN $1,000

BALLENGER, JEFFREY - CANIDATE FOR CONGRESS R - IA 14-NOV $250SANDHILLS PAC R - NE 29-AUG $5,000

REPUBLICANS $6,550DEMOCRATS $3,450TOTAL $10,000

ES &S Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTES&S GALE, JOHN - SOS R - NE 05-SEP $500

16-SEP $500SHELLEY, KEVIN - SOS D - CA 27-FEB $10,000

28-JUN $10,000YES ON PROP 41 - VOTING MODERNIZATION N/A 25-FEB $50,000HETTEL, JOE - LASALLE COUNTY STATE’S D - IL 12-AUG $550ATTORNEY. CANDIDATEABELL, MARSHA - CANDIDATE FOR HOUSE R - IN 12-AUG $600HOUSE REP. CAMPAIGN COMMITTEE OF CT R - CT 06-FEB $250WA STATE REP. PARTY R - WA 17-OCT $500

DONESON, LOUIS FIELD REP. OHIO STATE REPUBLICAN PARTY R - OH 04-NOV $750MCCARTHY, MICHAEL DIRECTOR HAWKS, HOWARD - BOARD OF REGENTS U OF NE N/A 09-APR $1,000

THUNE, JOHN - CANDIDATE FOR SENATE R - SD 21-AUG $1,000AMERICAN AGRISURANCE ASSOCIATION PAC N/A 07-JAN $5,000SANDHILLS PAC R - NE 29-APR $5,000

REPUBLICAN $9,100DEMOCRAT $20,550OTHER $56,000TOTAL $85,650

ES &S Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTES&S GREATER INDIANAPOLIS REP. FINANCE COMMITTEE R - IN 29-AUG $1,250

HETTEL, JOE - LASALLE COUNTY STATE'S D - IL 05-AUG $550ATTORNEY. CANDIDATE

MCCARTHY, MICHAEL DIRECTOR SANDHILLS PAC R - NE 17-OCT $5,000REPUBLICAN $6,250DEMOCRAT $550TOTAL $6,800



Diebold Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTBUCCI, DAVID SENIOR VP VOINOVICH, GEORGE SEN. R - OH 29-JUN $1,000

BUSH, GEORGE W. R 26-JUN $2,000BOCKIUS, LOUIS V. III BOARD OF DIRECTORS STARK COUNTY REPUBLICAN PARTY R - OH 10-FEB $1,000

02-APR $1,000BUSH, GEORGE W. R 24-JUN $2,000

CONNOR, CHRISTOPHER BOARD OF DIRECTORS VOINOVICH, GEORGE SEN. R - OH 13-AUG $1,000BUSH, GEORGE W. R 26-JUN $2,000DEWINE, MIKE SEN. R - OH 23-JUL $2,000CARE PAC R 29-DEC $500MONTGOMERY, BETTY - AUDITOR R - OH 19-NOV $500DETERS, JOSEPH - TREASURER R - OH 25-SEP $250

CROWTHER, JOHN M. CIO BUSH, GEORGE W. R 27-AUG $2,000D'AMICO, THOMAS R. VP BUSH, GEORGE W. R 03-SEP $2,000

VOINOVICH, GEORGE SEN. R - OH 21-JUN $500DETTINGER, WARREN W. VP VOINOVICH, GEORGE SEN. R - OH 25-JUN $500DIMMITT, WILLIAM R. SERVICE TECH. NATIONAL REP. CONGRESSIONAL COMMITTEE R 02-APR $200FRAZITTA, BART VP BUSH, GEORGE W. R 26-JUN $1,000

29-SEP $1,000GESWIN, GREGORY T. SENIOR VP & CFO VOINOVICH, GEORGE SEN. R - OH 30-JUN $2,000

BUSH, GEORGE W. R 26-JUN $2,000HILLOCK, JENNIFER L. BUSH, GEORGE W. R 27-AUG $2,000HILLOCK, MICHAEL J.. INTERNATIONAL PRES. VOINOVICH, GEORGE SEN. R - OH 21-JUN $2,000

BUSH, GEORGE W. R 26-JUN $2,000HOOVER, TIMOTHY EMPLOYEE SCHURING, KIRK REP. R - OH 02-OCT $50INGRAM, LARRY D. VP BUSH, GEORGE W. R 15-SEP $1,000

26-JUN $1,000LAUER, JOHN N. BOARD OF DIRECTORS VOINOVICH, GEORGE SEN. R - OH 09-AUG $2,000

18-NOV $1,000MAHONEY, ROBERT CHAIMAN EMERITUS CARE PAC R 30-NOV $250

VOINOVICH, GEORGE SEN. R - OH 29-JUN $1,000STARK COUNTY REPUBLICAN PARTY R - OH 13-JAN $1,000BUSH, GEORGE W. R 06-JUN $2,000

O'DELL, WALDEN PRES. & CEO VOINOVICH, GEORGE SEN. R - OH 25-JUN $2,000BUSH, GEORGE W. R 12-JUN $4,000

08-AUG $2,000ROSENBERG, WILLIAM VP BUSH, GEORGE W. R 19-SEP $2,000SCHEURER, CHARLES B. VP VOINOVICH, GEORGE SEN. R - OH 21-JUN $500

BUSH, GEORGE W. R 27-AUG $2,000SCHURING, KIRK REP. R - OH 05-JUN $100OELSLAGER, SCOTT SEN. R - OH 28-OCT $100

SWIDARSKI, THOMAS SENIOR VP BUSH, GEORGE W. R 09-JUL $2,000TIMKEN, WILLIAM R. BOARD OF DIRECTORS DEWINE, MIKE SEN. R - OH 11-MAR $1,000

VOINOVICH, GEORGE SEN. R - OH 21-JUN $2,000MCCOLLUM, BILL 2004 CAMPAIGN R - FLA. 27-AUG $1,000NATIONAL REP. SENATORIAL CAMPAIGN R 09-JUN $8,500

20-JUN $8,500CARE PAC R 31-DEC $5,000STARK COUNTY REPUBLICAN PARTY R - OH 20-FEB $2,000

24-OCT $1,500BUSH, GEORGE W. R 02-JUN $2,000REPUBLICAN NATIONAL COMMITTEE R 22-DEC $20,000

UROSOVICH, ROBERT PRESIDENT DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE D 18-DEC $2,500REPUBLICAN $105,950DEMOCRAT $2,500TOTAL $108,450

Sequoia’s bottom line. Was it money well spent? With

Shelley’s demand for voter-verifiedpaper audit trails, he has often been atodds with DRE manufacturers, whoinsist their products are safe and reli-able without paper receipts. Shelleyhas particularly had public differenceswith Riverside County registrarMischelle Townsend, one of theindustry’s most vocal backers of DREsnationally, and a Sequoia customer.11

LobbyingVendors have also paid for lob-

bying efforts at both the state andfederal level.

Analysis of these reports ismore problematic, given the widerange of state lobbying disclosurerequirements. For example, manylobbyist reports analyzed for thisstudy did not require lobbyists toinclude targeted officials or legisla-tion, but rather stated that generallyboth House and Senate officialswere lobbied.12

Moreover, lobbying expenses,compensation and expenditures var-ied from vendor to vendor withheavier activity in states consideringlarger contracts, such as California,New York and Ohio.

Nevertheless, even a cursorylook at state lobbying reports sug-gests that companies are activelyengaged in lobbying as part of theirbusiness efforts.

Between 2001 and 2003Diebold, ES&S, Hart InterCivic,Sequoia and VoteHere engaged lob-byists in 21 states and several at thefederal level.

ES&S employed the most lob-byists at the state level with lobby-ists registered in 14 states fromJanuary 2001 to June 2003. ES&Sspent a total of $100,000 on com-


$200 million bond for the purchaseof new voting systems. Nearly two-thirds of voters had previously beenusing punch-card machines.

Sequoia and ES&S were the toptwo contributors in the effort to passProposition 41, donating $100,000and $50,000 respectively. Theirefforts – which funded advertise-ments, a Web site and other activities– helped to nudge the Act over thetop in the March 2002 primary. Itwon with 51.6 percent of the vote onthe strength of strong majorities injust a few populous counties, includ-ing Los Angeles, San Francisco andMarin.9

But the influence that votingmachine companies buy with theircontributions is not at all clear.

Home-State GivingIf political contributions were

exclusively to curry favor amongstate voting decision-makers, thequestion arises: why did Dieboldgive so much money in Ohio, whereonly a handful of counties arereplacing voting systems this year,and none in Maryland and Georgia,two states that decided to purchasemulti-million dollar statewide vot-ing systems from the company?10

It could have to do withDiebold’s other business, banking,and because of its relationship withtop leaders in its home state, Ohio.Other companies, including HartInterCivic, ES&S and Sequoia, havesimilarly made contributions tohometown candidates, politicalaction committees, or both.

Sequoia, for example, con-tributed $2,000 to Secretary ofState Kevin Shelley’s election effortsin 2002. As the state’s top electionofficial, Shelley is directly responsi-ble for making decisions that impact

tions to Republicans andDemocrats. Republicans received$21,900 and Democrats $24,550.

Contributions from California-based Sequoia Voting Systemstotaled $3,500 to Republicans and$18,500 to Democrats. Texas-basedHart InterCivic made the smallestcontributions – totaling just under$6,000 with $3,250 to Republicansand $2,500 to Democrats.

Furthermore, political contribu-tions by voting machine manufac-turers to political parties and candi-dates could drop precipitously in thenear future. Diebold decided in June2004 to ban top executives frommaking any political contributions.7

According to a companyspokeswoman, ES&S has a policyagainst contributions by employeesin the company's name.8 This, how-ever, is offset by federal and staterequirements that donors disclosetheir employers.

While other companies havenot faced the same criticism asDiebold for political involvement,the decision by the company couldinspire others in the industry to stayout of elections, other than withtheir products.

Case Study in Influence:California’s Bond

There have been instanceswhere political activity by votingmachine vendors has had an impacton policy. The 2002 effort to securepublic funding for the purchase ofvoting systems to replace punchcards in California attracted theattention and support of two of the“big five” voting machine compa-nies: Sequoia and ES&S.

The Voting ModernizationBond Act of 2002, or Proposition41, would allow the state to secure a




Political activity by corporations

is nothing new to the American

political scene. While reports of

campaign contributions and lobbying

activity by voting equipment manu-

facturers represent a new develop-

ment in the implementation of the

Help America Vote Act (HAVA), the

fact that profit-making enterprises

are willing to invest to influence

public policy is not surprising.

The growing scrutiny of such

activity, however, is likely to trigger a

variety of responses that act to put

checks on political giving by election

companies – requirements that

could alter the relationships

between voting equipment manufac-

turers and their clients in state and

local government.

One response to public outcry

about corporate political contribu-

tions is for companies simply to stop

making them.This is the approach

adopted by Ohio-based Diebold Inc.,

parent company of Texas-based

Diebold Election Systems, which

recently announced that all execu-

tives with oversight of the elections

division would be prohibited from

making,“contributions to, directly or

indirectly, any political candidate,

party, election issue or cause, or par-

ticipate in any political activities,

except for voting." The change also

applies to all employees and execu-

tives of Diebold Election Systems.13

The policy was adopted by the

company’s board of directors after

the controversy generated by

Walden O’Dell, Diebold’s CEO, in

2003, when he made the now-infa-

mous pledge to “[help] deliver

Ohio’s electoral votes” to President

Bush in a fundraising letter.14

Another approach is for the

affected governments to prohibit

political contributions. Federal law

prohibits political contributions by

federal contractors, although this

prohibition does not apply to state

and local programs supported by

federal funds.15

Similarly, many state and local

laws prohibit contributions by com-

panies doing business with their

jurisdictions. Some jurisdictions go

further to prohibit contributions by

companies seeking to obtain pro-

curement contracts. As HAVA

implementation continues and pro-

curement activity accelerates, it will

be interesting to see if and how

such laws are enforced in the voting

technology context.

A third approach is to limit

procurement activities by compa-

nies making political contributions.

One example is the U.S. Municipal

Securities Rulemaking Board’s Rule

G-37, which seeks to combat the

practice of “pay to play” in the

municipal bond industry by prohibit-

ing certain municipal finance per-

sonnel and their employers from

seeking underwriting business from

any jurisdiction within two years of

making a political contribution to an

official with the authority to influ-

ence the choice of underwriter.16

Although there are no current

laws with similar reach in the voting

technology industry, such a narrow,

targeted reaction to the growing

political activity by voting equipment

manufacturers is certainly possible as

the relationship of vendors and poli-

cymakers comes into sharper focus.

Whatever the eventual

response, if any, of policymakers to

the political activity of election ven-

dors, it is certain that scrutiny of

such activity by advocates and the

general public will be another key

consideration in the ongoing imple-

mentation of HAVA nationwide.

Vendors Face Growing Scrutiny Over Contributions

pensation and expenditures for fed-eral lobbying activities.

Diebold, with lobbyists operat-ing in 10 states, paid $50,000 in2003 for federal lobbying activitiesand Sequoia hired lobbyists in ninestates and none at the federal level.

Diebold, ES&S, and Sequoiaall had lobbyist representatives inArkansas, Louisiana, New York

and Ohio. Hart InterCivic had representa-

tives in Ohio and Texas, andVoteHere engaged lobbyists in itshome state of Washington.

At the federal level, VoteHerespent $620,000 from January 2001to December 2002. The majorityof the money went toward officeoperations and support of legisla-

tion involving election reform,military voting, election systemand standards and online votingincluding the Ney-Hoyer electionreform bill (H.R. 3295), the Doddreform bill (S. 565), and theDepartment of Defense authoriza-tion and appropriations bills.



Diebold Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTBUCCI, DAVE SENIOR VP TAFT, BOB GOV. R - OH 05-OCT $250BOCKIUS, LOUIS V. III BOARD OF DIRECTORS STARK COUNTY REPUBLICAN PARTY R - OH 05-FEB $1,000

SCHURING, KIRK REP. R - OH 06-MAY $2,50004-JUN $2,500

TAFT, BOB GOV. R - OH 07-JUN $2,500WYOMING REPUBLICAN PARTY R - WY 01-MAY $200

CONNOR, CHRISTOPHER M. BOARD OF DIRECTORS VOINIVICH, GEORGE SEN. R - OH 21-AUG $1,000TAFT, BOB GOV. R - OH 27-SEP $500HOUSEHOLDER, LARRY REP. R - OH 10-MAY $1,000MONTGOMERY, BETTY - AUDITOR R - OH 06-APR $250

10-MAY $1,000STRATTON, EVELYN - SUPREME COURT JUSTICE R - OH 19-JUL $1,000

12-SEP $500DETTINGER, WARREN VP TAFT, BOB GOV. R - OH 05-OCT $250FRANCIS-VOGELSANG, CHAREE VP & SEC SCHURING, KIRK REP. R - OH 24-SEP $70FRAZZITTA, BARTHOLOMEW VP TAFT, BOB GOV. R - OH 05-OCT $250GESWIN, GREG SENIOR VP & CFO TAFT, BOB GOV. R - OH 05-OCT $2,000INGRAM, LARRY VP SCHURING, KIRK REP. R - OH 24-SEP $35KRAKORA, KEVIN VP SCHURING, KIRK REP. R - OH 24-SEP $35LAUER, JOHN N. BOARD OF DIRECTORS VOINIVICH, GEORGE SEN. R - OH 21-AUG $1,000

REGULA, RALPH S. REP. R - OH 13-AUG $250REPUBLICAN SENATE CAMPAIGN COMMITTEE OF OH R - OH 07-JUN $500TAFT, BOB GOV. R - OH 21-MAR $1,000

17-SEP $250OH HOUSE REPUBLICAN CAMPAIGN COMMITTEE R - OH 10-JUN $500STRATTON, EVELYN - SUPREME COURT JUSTICE R - OH 19-FEB $1,000

MAHONEY, ROBERT CHAIRMAN EMERITUS STARK COUNTY REPUBLICAN PARTY R - OH 09-JAN $1,000OELSLAGER, SCOTT REP. R - OH 16-SEP $100OHIO REP. PARTY STATE CANDIDATE FUND R - OH 28-MAR $1,000

17-OCT $1,000TAFT, BOB GOV. R - OH 13-MAY $2,500

O'DELL, WALDEN PRES. & CEO TAFT, BOB GOV. R - OH 09-MAY $2,500SCHEURER, CHARLES VP TAFT, BOB GOV. R - OH 05-OCT $500TIMKEN, WILLIAM R. BOARD OF DIRECTORS RNC REPUBLICAN NATIONAL STATE ELECTIONS CMT. R - OH 10-OCT $40,000

BLACKWELL, KENNETH SOS R - OH 09-OCT $2,500DETERS, JOSEPH - TREASURER R - OH 11-OCT $2,500O'CONNOR, MAUREEN - STATE SUPREME COURT R - OH 18-OCT $2,200OH REPUBLICAN CAMPAIGN COMMITTEE R - OH 05-DEC $3,000REPUBLICAN SENATE CAMPAIGN COMMITTEE OF OH R - OH 19-NOV $3,000SIMON, BILL - CANDIDATE FOR GOV. R - CA 30-JUN $1,000SCHURING, KIRK REP. R - OH 06-MAY $2,500

24-MAY $2,500STRATTON, EVELYN - SUPREME COURT JUSTICE R - OH 10-OCT $2,200OH REPUBLICAN PARTY STATE CANDIDATE FUND R - OH 03-MAY $16,500TAFT, BOB GOV. R - OH 15-MAY $2,500

VANCE, WES PRES. NORTH AMERICA TAFT, BOB GOV. R - OH 13-MAY $2,500SCHURING, KIRK REP. R - OH 24-SEP $70

WALLACE, HENRY D.G. BOARD OF DIRECTORS MONTGOMERY, BETTY - AUDITOR R - OH 03-MAY $48DIEBOLD INC. REPUBLICAN NATIONAL COMMITTEE R 08-FEB $25,000

01-MAY $15,00019-SEP $25,000

CUPAC 17-JUN $100ROSEMONT VOTERS LEAGUE N/A 29-JAN $1,075

REPUBLICAN $178,158OTHER $1,075TOTAL $179,233



Federal Lobbyist ExpendituresPRINCIPAL FEDERAL LOBBYIST DATES COMPENSATION EXPENSES TOTALDIEBOLD DAVID DISTEFANO JAN. - JUNE 2003 $30,000 $0

JULY - DEC. 2003 $20,000 $0 TOTAL $50,000 $0 $50,000

ES&S SUSAN PETNIUNAS JAN. - JUNE 2001 $20,000 $0 JULY - DEC. 2001 $20,000 $0 JAN. - JUNE 2002 $20,000 $0 JULY - DEC. 2002 $20,000 $0 JAN. - JUNE 2003 $20,000 $0 TOTAL $100,000 $0 $100,000

VOTEHERE, INC. JENNIFER CURLEY JAN. - JUNE 2001 $80,000 $0 JULY - DEC. 2001 $0 $120,000JAN. - JUNE 2002 $0 $220,000 JULY - DEC. 2002 $0 $140,000

BARRY RHOADS JAN. - JUNE 2002 $60,000 $0 TOTAL $140,000 $480,000 $620,000

Diebold Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTAMES-FORSYTHE, ANNE PAWLENTY, TIM GOV. R - MN 20-NOV $125BOCKIUS, LOUIS V. III BOARD OF DIRECTORS STARK COUNTY REPUBLICAN PARTY R - OH 12-FEB $1,000

TAFT, BOB GOV. R - OH 21-JUN $2,500CONNOR, CHRISTOPHER BOARD OF DIRECTORS MONTGOMERY, BETTY - AG R - OH 19-MAR $250

16-APR $25017-JUL $100

TAFT, BOB GOV. R - OH 14-SEP $1,00005-NOV $1,000

DETERS, JOSEPH - TREASURER R - OH 13-JUN $100DETTINGER, WARREN VP TAFT, BOB GOV. R - OH 20-NOV $1,000GESWEIN, GREGORY SENIOR VP & CFO TAFT, BOB GOV. R - OH 25-JUL $2,500MAHONEY, ROBERT CHAIRMAN EMERITUS VOINOVICH, GEORGE SEN. R - OH 23-MAR $250

RNC STATE ELECTIONS COMMITTEE R - OH 11-OCT $2,000STARK COUNTY REPUBLICAN PARTY R - OH 24-JAN $1,500TAFT, BOB GOV. R - OH 28-JUN $2,000

O'DELL, WALDEN PRES. & CEO RNC STATE ELECTIONS COMMITTEE R - OH 30-JAN $3,95014-FEB $2,015

VOINOVICH, GEORGE SEN. R - OH 16-AUG $500TAFT, BOB GOV. R - OH 02-JUL $2,500

TIMKEN, WILLIAM R. BOARD OF DIRECTORS RNC STATE ELECTIONS COMMITTEE R - OH 24-JAN $5,02226-APR $30,000

NRCCC - NON FEDERAL #2 R 25-APR $5,000OH REP. PARTY CANDIDATE FUND R - OH 06-JUN $16,500SCHURING, KIRK REP. R - OH 05-JUN $2,000TAFT, BOB GOV. R - OH 21-JUN $2,500PETRO, JIM - AUDITOR R - OH 28-DEC $2,500BLACKWELL, KENNETH SOS R - OH 20-DEC $2,500SIMON, BILL - CANDIDATE FOR GOV. R - CA 12-SEP $1,000

SCHEURER, CHARLES VP TAFT, BOB GOV. R - OH 18-JUN $500VANCE, WESLEY PRES. NORTH AMERICA VOINOVICH, GEORGE SEN. R - OH 16-AUG $500

TAFT, BOB GOV. R - OH 02-JUL $2,500DIEBOLD INC. REPUBLICAN NATIONAL COMMITTEE R 06-MAR $5,000

05-SEP $25,000ROSEMONT VOTERS LEAGUE N/A 31-JAN $1,075




Voting SystemManufacturers Then andNow – A Brief History

Until recently, few people inthe country, other than those whopurchased and maintained votingmachines, paid any attention to thecompanies that made those systems.Prior to 2000, few even consideredwhat they voted on, much less whomanufactured the lever, punch-cardor optical-scan machine on whichthey cast their ballots.

The rush to replace maligned,older voting technologies has creat-ed a highly competitive and poten-tially lucrative market for compa-nies seeking to sell upgraded votingsystems to states and localities.

For consumers – states, localitiesand the voters who will use thenewer systems to cast ballots – themarket has driven innovation, result-ing in easy-to-use ballot formats thatcan allow for multiple languages andcharacter sets, accessible voting forvoters with certain disabilities, porta-bility, flexibility, quicker tabulations,and vastly diminished rates ofuncountable ballots.

According to the FederalElection Commission, 19 compa-nies produce, “computerized votetabulation systems.” A handful wereformed after the troubled 2000election, started by entrepreneurswho predicted a rich market asstates phased out punch cards andlever systems in favor of opticalscan and direct-recording electronic(DRE) voting machines.

The Gold Rush that Wasn’t

With federal money, statematching funds and strong localinterest nationwide to avoid “anoth-er Florida,” the election systemmarket in recent years has beentransformed from a little-noticedindustry dominated by a few compa-nies into a cutthroat business com-plete with lawsuits, front-page newsreports and public relations blitzes –including newspaper advertisementsand even highway billboards.

After the 2000 election, itseemed clear that punch-card andlever voting systems would bephased out across the country. TheHelp America Vote Act (HAVA) of2002 promised the states $325 mil-lion to replace or upgrade these vot-ing systems, and mandated the pur-chase of at least one voting machineper polling place that was accessiblefor voters with disabilities.

The once-stagnant electionmarket seemed to resemble a goldrush, with the lure of nearly $4 bil-lion in federal funds for states tobuy new election equipment.

The rush failed to pan out formany companies – at least in theimmediate aftermath of the 2000election. HAVA funds weredelayed, held up by the lateappointment of the ElectionAssistance Commission and budgetcomplications. The authorized$3.86 billion has still not been fullyappropriated, nearly four years afterthe 2000 election.

These money shortages at thelocal level, combined with lingeringquestions about the security andreliability of paperless voting sys-tems, contributed to growing finan-cial troubles for voting system man-ufacturers – troubles that are begin-ning to show up on the bottom line.

Sequoia Pacific Voting Systems,the second largest DRE vendor inthe country, reported sales up 75percent in 2003, but margins fell,causing a $3.5 million operatingloss. Its parent company, London-based De La Rue, could dump thecompany, reported one story.17

The largest DRE vendor,Diebold Election Systems has suf-fered even more, with operatingprofits plummeting 32 percent in2003 while revenues fell 10 percentto $100 million.18 However, thecompany began to show signs of arecovery in 2004 with revenuesfrom election systems surging from$7.7 million to $27.1 million.19

A History of VotingMachine Companies

The companies that sell the newmachinery have faced a difficult roadat times. Manufacturers have bothinjected themselves into the world ofpolitics and found themselves thesubject of intense criticism, conspira-cy theories and government scrutiny.

Voting machines began replac-ing paper ballots in the first half ofthe 20th century, when the levermachine began to be used in a num-ber of states. The mechanical leversystem, invented in 1892, was

The Industry

dragged down by little chads. A New Yorker Magazine article

about voting systems concerns pub-lished in 1988 detailed some of IBM’stroubles. During California’s June1968 primary, punch cards could notbe brought into a tabulating centerbecause of the nearby shooting ofSen. Robert F. Kennedy. “Reporterswere worried about the delay andofficials at IBM began to wonder seri-ously about the election business,which, comparatively speaking, wasproviding only a small profit.”22

Problems continued that year,the article stated, when during theNovember election, tabulatingmachines for precincts in Missoula,

Montana mistakenly counted ballotscast for Hubert Humphrey forRichard M. Nixon and vice-versa.

But, the article continued, thedefining moment that convincedthe company to leave the businesswas an article in a suburbanChicago newspaper suggested thatIBM had entered the election busi-ness so that Thomas Watson, thecompany’s chairman, “wouldbecome president.”

That might have solidified adecision to leave the market thatwas already in the works.



designed to make voting secret,simple and less susceptible to fraud.But the system later proved to bevulnerable to tampering by thosewith access to the vote tallies.20

By the 1930s, lever machineswere ubiquitous, but not withouttheir problems. Newer technology –punch-card machines – was adoptedby many jurisdictions in the 1960s.Punch cards allowed faster tabula-tions and permitted an examinationof each individual vote; ironically, afeature memorably displayed inSouth Florida in November 2000.Punch cards also marked the entryof the first significantly-sized com-pany into the voting system market.

In 1965, IBM – a company thathad made punch cards for decadesbefore – purchased HarrisVotomatic, the company that hadbeen producing the punch-cardmachines for localities in Oregon,Georgia and California.21 It did not,however, take long for Big Blue toexit the market four years later.

What led IBM to leave theelection business is strikingly simi-lar to the controversies modern vot-ing machine manufacturers face. Infact, the same fear of technology,suspicion of programmers and con-cerns about the inability to discernvoter intent dogged IBM as much35 years ago as it does Diebold,ES&S, Sequoia and other manufac-turers in 2004.

Computer Giant Finds Great Risks,Few Rewards

The trouble with punch cardsstarted in the Golden State in 1968.According to one former IBM sales-man who sold the company’sVotomatic punch cards inCalifornia, Big Blue was being

“You have to remember thatIBM had almost no negative publici-ty at the time, so the fact that therewere questions about the Votomatic[punch-card] system seemed to bequite important to them,” said RoySaltman, an independent consultanton election policy and technology.“There’s a lot of downside and riskin this industry. The risk of negativepublicity is strong. If it’s only a smallpart of your business, why wouldyou let yourself be involved if it’snot important for your bottom line?IBM did right – they got rid of it.”23

With IBM’s departure, the elec-tion business was predominantly leftto small companies that dealt exclu-

sively with elections, or in somecases, printing and forms. Big Blue’spunch-card business spun off twocompanies, Electronic VotingMachine (E.V.M.) and ComputerElection Systems (C.E.S.) Theother names in elections through-out the past four decades werehardly household: Cronus and R. F.Shoup, to name a few. Meanwhile,better-known computer firm Unisysdeveloped the optical scanner, butpromptly left the election businessbecause it was not profitable.24

Innovation continued with the

The same fear of technology, suspicionof programmers and concerns about theinability to discern voter intent doggedIBM as much 35 years ago as it doesDiebold, ES&S, Sequoia and other manu-facturers in 2004.



Lobbying ExpendituresSTATE CLIENT LOBBYIST DATES COMPENSATION EXPENSES TOTALCALIFORNIA DIEBOLD ROSE & KINDELL APRIL - JUN 2002 $10,000 $0

JULY - SEPT. 2002 $15,020 $0JULY - SEPT 2003 $7,500 $0OCT. - DEC. 2003 $22,560 $0JAN. - MARCH 2004 $15,000 $9,015.58TOTAL $70,080 $9,016 $79,096

ES&S CAPITAL CONNECTION JAN. - MARCH 2004 $15,000 $0 TOTAL $15,000 $0 $15,000

CONNECTICUT SEQUOIA GAFFNERY, BENNETT & ASSC. 2001 $74,200 $0 2002 $42,400 $0 2003 $46,050 $0 TOTAL $162,650 $0 $162,650

INDIANA ES&S ICE MILLER JAN. - JUNE 2001 $12,000 $82.20 BINGAM MCHALE JULY - DEC. 2001 $30,000 $591.14

JAN. - JUNE 2002 $15,000 $293.43 JULY - DEC. 2002 $15,318 $775.73 TOTAL $72,318 $1,742.50 $74,061

NEW YORK SEQUOIA BULEY PUBLIC AFFAIRS JAN. - JUNE 2003 $45,000 $12,895 JULY - DEC. 2003 $45,000 $2,461 JAN - FEB. 2004 $15,000 $16 TOTAL $105,000 $15,372 $120,372

O'DWYER & BERNSTIEN JULY - DEC. 2003 $60,000 $25 TOTAL $60,000 $25 $60,025

ES&S BULEY PUBLIC AFFAIRS ??? 2002 $36,000 $14,618 TOTAL $36,000 $14,618 $50,618

DAVIDOFF & MALITO JULY - DEC. 2003 $60,000 $3,822 JAN. - FEB. 2004 $20,000 $1,679 TOTAL $80,000 $5,501 $85,501

DIEBOLD GREENBERG TRAURIG JAN. - JUNE 2003 $75,000 $0 JULY - DEC. 2003 $75,000 $0 JAN. - FEB. 2004 $25,000 $0 MARCH - APRIL 2004 $25,000 $0 TOTAL $200,000 $0 $200,000

All lobbyist compensation and expenditure reporting includes only documents filed electronically and made available onlinethrough individual state websites. Not all states require lobbyists to file reports electronically, nor do they make theinformation available online. Federal lobbyists’ compensation and expenditure reports are not available online. Principaland lobbyists names were gathered from states that provide the information online.



Companies that manufacturevoting machines and set up voter reg-istration databases are like any otherbusiness — when they pursue con-tracts in their home state, they arenot shy about pushing the local angle.

When Ohio announced it wasaccepting bids to replace the punch-card machines in use in most coun-ties, North Canton, Ohio-basedDiebold, Inc. jumped at the opportu-nity, as did many other companies.(Diebold Election Systems, a sub-sidiary of Diebold, is based in Texas).

However, Diebold made an offerother companies could not – tomanufacture all voting machines forthe state in-state, at the firm’sNewark plant where they produceautomated teller machines. Secretaryof State Kenneth Blackwell, though,pointed out that Diebold’s in-statestatus would not be a factor in theselection process.

“This is not an economic develop-ment project.This is a process that willprovide the voters of Ohio with thebest election systems available, at thebest value for taxpayers,” said CarloLoParo, a Blackwell spokesman.53

When Diebold was one of fourcompanies that eventually did makethe list of approved vendors, thecompany then focused on the coun-ties that would be selectingmachines.After the Licking CountyBoard of Elections (home of theNewark plant) said they were lean-ing toward Sequoia Pacific VotingSystems, Diebold quickly went intoaction, sending hundreds of lettersto members of the Licking CountyChamber of Commerce, askingbusiness leaders to urge the countyto choose Diebold.54

Despite the letter campaign, the

county selected Sequoia votingmachines in early January 2004.

Mark Radke, director of market-ing for Diebold said the companywas,“very disappointed that LickingCounty elected to go with a com-petitor, especially considering thefact that we have a large manufactur-er located in the county and a largenumber of Diebold employees live inthe county.”55

The loss did not leave lastingscars, however. Over 40 counties outof 71 eligible to select electronicvoting machines selected Diebold.Sequoia ended up not signing a con-tract with the state, leaving LickingCounty to select from the remainingthree vendors.

In South Carolina, the selectionof Election Systems and Software(ES&S) to supply electronic votingmachines for the state over home-town Palmetto Unilect caused a stir,The company protested the decisionpartially on the grounds of being anin-state company.

The company claimed if theywere awarded the contract it wouldhire at least 85 people to build themachines.“The purchasing ought tobe geared more toward allowing in-state distributors the right to get apercentage (price advantage) forbeing in-state and hiring SouthCarolina people,” said state Sen. JakeKnotts, R-Lexington, supportingPalmetto Unilect.56

State law requires a “SouthCarolina vendor preference,” whichUnilect officials said was not includedin the state’s request for proposal. Thisclaim was rebuffed, however, by thestate procurement office, stating that itdid not apply in this case because thesewere sealed competitive bids.57

Ultimately, Palmetto Unilect gotanother chance to bid – but not onthe basis of an in-state preference.Rather, the state reopened biddingbecause ES&S’s winning bid did notprovide fixed prices for some itemsover the duration of the contract, ashad been specified. In mid-July 2004,ES&S was again awarded the contract.

In other cases, local vendorshave had the advantage of alreadyhaving done business with theirhome state.

Indianapolis-based QuestInformation Systems recently won itsbid to create a statewide voter regis-tration database for Indiana.TheSecretary of State’s office not onlynoted the company’s Indiana roots inits announcement, but also men-tioned the extensive work the elec-tions division and the company hadalready done together, including proj-ects such as the state’s campaignfinance reporting system.58

Similarly, in Oregon, the statechose a local vendor with which ithad a history with to set up itsstatewide registration database.Salem-based Saber Consulting won a$10.5 million contract in August2003.The company is partneringwith two other Oregon-basedorganizations for this project.

The company estimates thecontract will create over $800,000in information technology jobs inthe state.

“This project is about Oregoncompanies delivering world-classvalue to Oregon clients for the citi-zens and taxpayers of Oregon….thechoice of Saber keeps $10.5 millionin Oregon for the creation andretention of Oregon jobs,” the com-pany said in a statement.59

Home-State Advantage



advent of direct-recording electron-ic (DRE) systems that recordedvotes electromagnetically ratherthan on paper ballots.

From the large, push-buttonDREs that closely resembled theelderly lever machines, ATM-stylemachines emerged – paperless, ableto display multiple character setsand impossible to over-vote. Voterscould be warned of non-votes andcould review their ballots beforethey were cast. And people with dis-abilities, particularly blind voters,could cast ballots secretly and inde-pendently, many for the first time intheir lives.

Family Ties,Ex-Election Officials and IBM Veterans

After years of being largelyignored, the business of selling elec-tion systems has become increasing-ly public, with intense media scruti-ny into the integrity, security andaccuracy of all types of equipment.

Not so well known are the closeties many of those selling voting sys-tems have to companies that pro-duced the punch cards their compa-nies are seeking to replace, the posi-tions some election system officials

held and, in one instance, the familybonds that tie the two largest votingmachine companies. A few examples:

• Alfie Charles, a spokesman forSequoia Voting Systems, joinedthe company in 2002 after work-ing for seven years as press sec-retary in California Secretary ofState Bill Jones’ office – the sameoffice which spearheaded thepassage of a $200 million bondmeasure to replace punch cardsin the state. Sequoia also hiredJones himself as a consultant in2003 – one month after theMercury News reported that hewrote letters to Santa ClaraCounty’s Board of Supervisorsassuring them the company’sDREs were reliable.25 A compa-ny press release also notedCharles joined KathrynFerguson, the company’s vicepresident of governmental rela-tions and public affairs.26

Ferguson, who was hired by thecompany in 2001, was the for-mer election chief in ClarkCounty, Nevada, the state’slargest. Nevada opted for astatewide system of Sequoiatouch-screen machines in 2003.

Clark County opted for theSequoia DRE machines farahead of the state, using themsince the mid-1990s.27

• DRE maker Unilect is headedby Jack Gerbel, who startedwith IBM then founded CES.The company Web site notesthat Gerbel “had at that timethe distinction of personallyselling and installing more suc-cessful election systems thanany other person in the U.S.”28

CES was one of two companiesthat had the rights to purchaseIBM’s punch-card voting sys-tems after the company got outof the business in 1969.

• Nebraska-based ElectionSystems and Software (ES&S)hired Sandra Mortham, a lob-byist who, in 2002 sold thecompany’s touch-screen votingsystems to Florida counties. Sheserved as secretary of state from1995 to 1999 and also split timebetween her ES&S lobbyingduties and those she performedfor the Florida Association ofCounties, reported TheAssociated Press in The St.Petersburg Times in 2002.Mortham told the paper shewas not involved in the decisionby the association to endorsethe ES&S touch screens, whichare now used in two of Florida’smost populous counties,Miami-Dade and Broward.29

• The nation’s two largest elec-tion system manufacturers,Diebold Election Systems andES&S share more than a heftychunk of the voting machinesbusiness. They share theUrosevich brothers. ToddUrosevich, who has spent near-

Not so well-known are the close ties many ofthose selling voting systems have to compa-nies that produced the punch cards theircompanies are seeking to replace, the posi-tions some election system officials held and,in one instance, the family bonds that tie thetwo largest voting machine companies.



ly 20 years in the electionindustry, works for one of thechief competitors of his broth-er’s company. Bob Urosevichserves as Diebold ElectionSystem’s president. Conspiracytheorists often point out thefamily ties that link the compa-nies.30 Both brothers worked atthe same election companythey founded, AmericanInformation Systems (whichlater became ES&S).

• Sen. Charles Hagel, R-Neb.,had a financial stake in theMcCarthy Group, Inc., a com-pany that owns ES&S. Hagelwas chairman of AmericanInformation Systems until 1995,just before he became a candi-date. Michael R. McCarthy,chairman of the McCarthyGroup, served as Hagel’s cam-paign treasurer from 1999 untilthe end of 2002.31

• Washington’s secretary of stateuntil 2000, Ralph Munro,serves on the board of direc-tors of VoteHere, a companythat produces voting applica-tions. Avi Rubin, a JohnsHopkins University computerscientist who wrote an oft-cited report on the securityand integrity of Diebold’sDREs served on the company’sadvisory board and held stockoptions until August 2003.32

The Vendors UniteIn the face of attacks on their

machines’ reliability and security,six DRE makers united in late 2003to form the Election TechnologyCouncil, a group under the umbrel-la of the Information TechnologyAssociation of America.

A press release from the organi-zation stated Advanced VotingSystems, Diebold Election Systems,Election Systems & Software, HartInterCivic, Sequoia Voting Systemsand Unilect formed the group, “toraise the profile of electronic vot-ing, identify and address securityconcerns with electronic voting,develop a code of ethics for compa-nies in the electronic voting sector,and make recommendations in theareas of election system standardsand certification.”33 VoteHere isnow a member as well.

In the six months since its for-mation, the Council has primarily

served a public relations role, releas-ing statements calling the controver-sy over paperless DREs, “more rhet-oric than reality,” and stating that,“few critics have tried to play to thefears of many Americans by spread-ing myths, misinformation and con-spiracy theories.”34

DRE researcher Rubin dis-missed the Council as, “an attemptto put together a united publicrelations front. They’ve alwaysshown an interest in saying whatev-er they can to get past public rela-tions problems.”35

Six DRE makers united in late 2003 to

form the Election Technology Council,

a group under the umbrella of the

Information Technology Association of

America...A critic dismissed the

Council as,“an attempt to put togeth-

er a united public relations front.

They’ve always shown an interest in

saying whatever they can to get past

public relations problems.”



the procurement process has notbeen smooth. After the list of possi-ble vendors was whittled down tothree, Sequoia, one of the vendorsnot selected, protested the process.Ohio Secretary of State KennethBlackwell avoided any grievanceprocess and added the vendor to thelist. In the end, though, Sequoiadecided not to sign a contract withthe state.

Ohio has also faced delays inreleasing funds to purchase DREs inlight of concerns over touch-screensecurity and the decision to requirepaper trails by 2006. The threecounties that were to switch to e-voting this November were prohib-ited because of security concerns.46

Michigan followed a similarpath and selected three vendors(Diebold, ES&S and Sequoia) tosupply optical-scan voting systems.Diebold and ES&S received statecertification and Sequoia receivedconditional certification. The statethen sent packets to counties withinformation on the vendors. If thecounty opted for Sequoia, themachines would not be purchaseduntil 2005. The counties also hadthe option to select no vendor andopt out until 2005.

It appears most jurisdictions inMichigan that do not already haveoptical scan systems – about 650 –will still be using their old systemsin November. State and local offi-cials say a longer-than-expected cer-tification process has cut short thetime necessary to convert to thenew system.47

Local-level procurementof voting systems

Maintaining a status quo inelection administration, counties

and jurisdictions in some states arestill responsible for negotiating con-tracts with vendors.

In California, the epicenter ofDRE controversy, some countiesnegotiated voting machine contractswith vendors in 2001 and 2002,after the state passed a $200 millionbond issue to fund the replacementof punch cards.

Like Ohio, California has man-dated a VVAPT by 2006. And onecounty, Santa Clara, concernedabout what adding printers wouldcost, negotiated into its contractwith Sequoia Voting Systems that ifa paper trail was mandated by theSecretary of State, “within six to 12months after the certification by theSecretary of State Sequoia mustprovide 5500 VVPR [Voter VerifiedPaper Record] devices to theCounty at no additional cost.”48

California is also the first stateto have a county cancel a votingmachine contract with a vendor,banning the use of one type of DREproduced by Diebold.

"There was a confidence issuewith the way Diebold conductedbusiness with the county and thestate in the past year," said IraRosenthal, Solano County registrarand chief information officer.49

Pennsylvania similarly left it tothe locals. “The Commonwealthplans to leave decisions regardingthe replacement or upgrading ofvoting systems to the prerogative ofthe governing authorities of theCommonwealth’s 67 counties,” thestate plan noted.50

Wait and SeeFinally, there are a few states,

including Idaho, Montana andWyoming that are waiting to see howthe controversy over electronic votingplays out and for the EAC and NISTto issue voting system standards,which will likely occur in 2005.

Responding to an electionline.orgsurvey, Lori Klassen, elections offi-cer from the Wyoming Secretary ofState’s office said, “Wyoming willbe watching NIST very closelybefore moving forward too far inthis area.”51

Barb Huey, Iowa’s deputy sec-retary of state for elections andvoter registration, echoed these sen-timents. “We are waiting for thecertification process through EACand NIST to be established and willfollow their recommendations andguidelines,” she said.52

California is also the first state to have a

county cancel a voting machine contract

with a vendor, banning the use of one

type of DRE produced by Diebold.



by Sequoia. The state also requireda paper trail by the November2004 election. In choosing betweenSequoia and Diebold, Secretary ofState Dean Heller looked to thestate’s Gaming Control Board’sElectronic Services Division. Thedivision, citing reports critical ofDiebold touch screens inMaryland, noted, “The Dieboldelectronic voting machine…repre-sents a legitimate threat to theintegrity of the election process.” Apaper trail was required so, “voterswill be confident their choices arebeing recorded accurately.”39

Not everyone in the state waspleased with the selection process.In a letter to Heller, Carson CityCounty Clerk Alan Glover — presi-dent of the Nevada Association ofCounty Clerks — said, “Our unifiedopinion also still remains strongthat each county be responsible forselecting the equipment and vendorthat will best meet the needs oflocal voters.”40

Clerks were not just botheredby the process; they were also con-cerned about the rush to require apaper trail.

“Everyone is very nervous aboutit,” Glover said. “The timing is notgood at all. Even a new model of

vehicle that Detroit has tested for along time always has bugs."41

Heller, citing public support fora paper trail, stated that electionofficials such as Glover should bemore concerned about maintainingvoter confidence at the polls.

In April, South Carolina’s selec-tion process hit a similar snag.

The state wants to employ asingle voting system statewide.Some counties that already haveelectronic voting machines, how-ever, want to retain the machinesthat are already in place. InGeorgetown County, for example,officials say they are pleased withtheir current UniLect Patriotelectronic voting machines, andare worried the state will not beable to reimburse them for whatthey spent on these machines.42

New technologyControversy over touch screens

has not only created tension betweenthe counties and states, it has ledsome states to examine emergingvoting technology.

Arizona negotiated a contractwith Diebold for optical-scan sys-tems to replace punch-cardmachines in nine counties. Thecontract also included an option to

use touch screens which the statecould deploy by 2006. DeputySecretary of State Kevin Tyne saidArizona will wait to proceed withtouch screens, track developmentsin parts of the country using DREsand see what new technology devel-ops. The state could use theDiebold touch screens, but they arealso “open-armed to all sorts ofsolutions,” Tyne said.43

One potential solution could bea voting system produced byES&S/Automark which combinestouch-screen and optical scan tech-nology. It is billed by proponents asa device that satisfies both thedesire for a paper trail and theHAVA requirement of being acces-sible to blind and disabled voters.Arizona will be using the machinesin a pilot project this fall in targetedprecincts in two or three counties,including the state’s largest,Maricopa County.44

State-level procurement of multiple voting systems

Two other states have taken aslightly different approach. BothOhio and Michigan have negotiatedcontracts at the state level but optedfor multiple vendors from whichcounties could choose.

Ohio officials said they hopedto achieve dual goals -- negotiatingthe best price while keeping thecounties involved in the process.“Providing counties with the abilityto choose among a list of qualifiedvendors preserves the involvementof the counties in the vendorprocess while maximizing the buy-ing power of the state under a stateterm contract procedure,” the stateHAVA plan states.45

Yet, in Ohio as in other states,

Controversy over touch screens has

not only created tension between

the counties and states, it has led

some states to examine emerging

voting technology.



The Help America Vote Act(HAVA) marks the most compre-hensive federal involvement in stateand local elections since the VotingRights Act of 1965. More signifi-cantly, it marks the first time theU.S. government has providedfunds to states to make changes inthe election process.

Despite this level of federalinvolvement, including a $3.86 bil-lion authorization and mandates forall states and territories to follow,the administration of electionsremains a distinctly local process.States that have been replacing orupgrading voting systems have notbeen directed how to do so by thefederal government.

In examining how states havegone about procuring contractswith companies to deliver new vot-ing systems, electionline.org identifiedfour procurement methods:

• State-level procurement ofone voting system. Currentlysix states have controlled the pro-curement process and purchasedone voting system either for theentire state or for jurisdictions inthe state that needed machinereplacement – Arizona, Georgia,Maryland, Nevada, NorthDakota, and South Carolina.

• State-level procurement ofmultiple voting systems. Twostates, Ohio and Michigan,have taken an in-betweenapproach, negotiating contractswith several vendors (in hopesof receiving better prices

through large purchases) andthen letting counties selectfrom this list.

• Local level procurement ofvoting systems. A number ofother states, includingCalifornia and Pennsylvania,have continued the traditionalpractice of allowing local offi-cials to purchase voting systemsfor their jurisdiction.

• Wait and see. Finally, there arethe states that are waiting forthe Election AssistanceCommission (EAC) and theNational Institute ofTechnology Standards (NIST)to provide guidelines on votingsystems standards before theymove forward with purchasingnew voting technology.

State-level procurement of uniform voting systems

Ahead of the packGeorgia, the first state to tackle

the issue of replacing malignedpunch-card voting machines, did soon a statewide scale. In the 2000presidential election, 3.6 percent ofthe Peach State’s voters who castballots did not register a vote forpresident, a higher rate than the 2.9percent in Florida.36 Secretary ofState Cathy Cox, alarmed at thisstatistic, convinced lawmakers totake action before the promise ofany federal funds.

In Georgia’s plan to implementHAVA, Cox noted that the

Secretary of State’s office “not onlyrecommended that the state adopt asingle uniform voting platform, butalso initiated a shift in policy –transferring a portion of electionresponsibilities from the countiesand election superintendents to thestate for funding and deployment ofa new statewide election system.”37

Accordingly, the state tookcharge of the procurement process:requesting and evaluating proposalsfrom companies; selecting a vendorand deploying the system statewide.By November 2002, all Georgia vot-ers were casting ballots on Dieboldtouch-screen voting machines.

Like Georgia, Maryland alsostarted the process of purchasingnew voting machines before theenactment of HAVA. State officialsalso selected Diebold to implementa statewide DRE voting system.Both states have received kudosfrom some for being the first tomake the leap into large-scalereplacement of voting machines.

This praise has been counteredby critics who have voiced concernsover the security and reliability ofelectronic voting and the lack of avoter-verified paper audit trail(VVPAT). This growing debateover paperless voting has had animpact on the procurement processin other states.38

Electronic voting debate andstate/county friction

Nevada, monitoring this grow-ing controversy over electronicvoting, purchased DREs provided

Voting System Procurement



ly 20 years in the electionindustry, works for one of thechief competitors of his broth-er’s company. Bob Urosevichserves as Diebold ElectionSystem’s president. Conspiracytheorists often point out thefamily ties that link the compa-nies.30 Both brothers worked atthe same election companythey founded, AmericanInformation Systems (whichlater became ES&S).

• Sen. Charles Hagel, R-Neb.,had a financial stake in theMcCarthy Group, Inc., a com-pany that owns ES&S. Hagelwas chairman of AmericanInformation Systems until 1995,just before he became a candi-date. Michael R. McCarthy,chairman of the McCarthyGroup, served as Hagel’s cam-paign treasurer from 1999 untilthe end of 2002.31

• Washington’s secretary of stateuntil 2000, Ralph Munro,serves on the board of direc-tors of VoteHere, a companythat produces voting applica-tions. Avi Rubin, a JohnsHopkins University computerscientist who wrote an oft-cited report on the securityand integrity of Diebold’sDREs served on the company’sadvisory board and held stockoptions until August 2003.32

The Vendors UniteIn the face of attacks on their

machines’ reliability and security,six DRE makers united in late 2003to form the Election TechnologyCouncil, a group under the umbrel-la of the Information TechnologyAssociation of America.

A press release from the organi-zation stated Advanced VotingSystems, Diebold Election Systems,Election Systems & Software, HartInterCivic, Sequoia Voting Systemsand Unilect formed the group, “toraise the profile of electronic vot-ing, identify and address securityconcerns with electronic voting,develop a code of ethics for compa-nies in the electronic voting sector,and make recommendations in theareas of election system standardsand certification.”33 VoteHere isnow a member as well.

In the six months since its for-mation, the Council has primarily

served a public relations role, releas-ing statements calling the controver-sy over paperless DREs, “more rhet-oric than reality,” and stating that,“few critics have tried to play to thefears of many Americans by spread-ing myths, misinformation and con-spiracy theories.”34

DRE researcher Rubin dis-missed the Council as, “an attemptto put together a united publicrelations front. They’ve alwaysshown an interest in saying whatev-er they can to get past public rela-tions problems.”35

Six DRE makers united in late 2003 to

form the Election Technology Council,

a group under the umbrella of the

Information Technology Association of

America...A critic dismissed the

Council as,“an attempt to put togeth-

er a united public relations front.

They’ve always shown an interest in

saying whatever they can to get past

public relations problems.”



the procurement process has notbeen smooth. After the list of possi-ble vendors was whittled down tothree, Sequoia, one of the vendorsnot selected, protested the process.Ohio Secretary of State KennethBlackwell avoided any grievanceprocess and added the vendor to thelist. In the end, though, Sequoiadecided not to sign a contract withthe state.

Ohio has also faced delays inreleasing funds to purchase DREs inlight of concerns over touch-screensecurity and the decision to requirepaper trails by 2006. The threecounties that were to switch to e-voting this November were prohib-ited because of security concerns.46

Michigan followed a similarpath and selected three vendors(Diebold, ES&S and Sequoia) tosupply optical-scan voting systems.Diebold and ES&S received statecertification and Sequoia receivedconditional certification. The statethen sent packets to counties withinformation on the vendors. If thecounty opted for Sequoia, themachines would not be purchaseduntil 2005. The counties also hadthe option to select no vendor andopt out until 2005.

It appears most jurisdictions inMichigan that do not already haveoptical scan systems – about 650 –will still be using their old systemsin November. State and local offi-cials say a longer-than-expected cer-tification process has cut short thetime necessary to convert to thenew system.47

Local-level procurementof voting systems

Maintaining a status quo inelection administration, counties

and jurisdictions in some states arestill responsible for negotiating con-tracts with vendors.

In California, the epicenter ofDRE controversy, some countiesnegotiated voting machine contractswith vendors in 2001 and 2002,after the state passed a $200 millionbond issue to fund the replacementof punch cards.

Like Ohio, California has man-dated a VVAPT by 2006. And onecounty, Santa Clara, concernedabout what adding printers wouldcost, negotiated into its contractwith Sequoia Voting Systems that ifa paper trail was mandated by theSecretary of State, “within six to 12months after the certification by theSecretary of State Sequoia mustprovide 5500 VVPR [Voter VerifiedPaper Record] devices to theCounty at no additional cost.”48

California is also the first stateto have a county cancel a votingmachine contract with a vendor,banning the use of one type of DREproduced by Diebold.

"There was a confidence issuewith the way Diebold conductedbusiness with the county and thestate in the past year," said IraRosenthal, Solano County registrarand chief information officer.49

Pennsylvania similarly left it tothe locals. “The Commonwealthplans to leave decisions regardingthe replacement or upgrading ofvoting systems to the prerogative ofthe governing authorities of theCommonwealth’s 67 counties,” thestate plan noted.50

Wait and SeeFinally, there are a few states,

including Idaho, Montana andWyoming that are waiting to see howthe controversy over electronic votingplays out and for the EAC and NISTto issue voting system standards,which will likely occur in 2005.

Responding to an electionline.orgsurvey, Lori Klassen, elections offi-cer from the Wyoming Secretary ofState’s office said, “Wyoming willbe watching NIST very closelybefore moving forward too far inthis area.”51

Barb Huey, Iowa’s deputy sec-retary of state for elections andvoter registration, echoed these sen-timents. “We are waiting for thecertification process through EACand NIST to be established and willfollow their recommendations andguidelines,” she said.52

California is also the first state to have a

county cancel a voting machine contract

with a vendor, banning the use of one

type of DRE produced by Diebold.



Companies that manufacturevoting machines and set up voter reg-istration databases are like any otherbusiness — when they pursue con-tracts in their home state, they arenot shy about pushing the local angle.

When Ohio announced it wasaccepting bids to replace the punch-card machines in use in most coun-ties, North Canton, Ohio-basedDiebold, Inc. jumped at the opportu-nity, as did many other companies.(Diebold Election Systems, a sub-sidiary of Diebold, is based in Texas).

However, Diebold made an offerother companies could not – tomanufacture all voting machines forthe state in-state, at the firm’sNewark plant where they produceautomated teller machines. Secretaryof State Kenneth Blackwell, though,pointed out that Diebold’s in-statestatus would not be a factor in theselection process.

“This is not an economic develop-ment project.This is a process that willprovide the voters of Ohio with thebest election systems available, at thebest value for taxpayers,” said CarloLoParo, a Blackwell spokesman.53

When Diebold was one of fourcompanies that eventually did makethe list of approved vendors, thecompany then focused on the coun-ties that would be selectingmachines.After the Licking CountyBoard of Elections (home of theNewark plant) said they were lean-ing toward Sequoia Pacific VotingSystems, Diebold quickly went intoaction, sending hundreds of lettersto members of the Licking CountyChamber of Commerce, askingbusiness leaders to urge the countyto choose Diebold.54

Despite the letter campaign, the

county selected Sequoia votingmachines in early January 2004.

Mark Radke, director of market-ing for Diebold said the companywas,“very disappointed that LickingCounty elected to go with a com-petitor, especially considering thefact that we have a large manufactur-er located in the county and a largenumber of Diebold employees live inthe county.”55

The loss did not leave lastingscars, however. Over 40 counties outof 71 eligible to select electronicvoting machines selected Diebold.Sequoia ended up not signing a con-tract with the state, leaving LickingCounty to select from the remainingthree vendors.

In South Carolina, the selectionof Election Systems and Software(ES&S) to supply electronic votingmachines for the state over home-town Palmetto Unilect caused a stir,The company protested the decisionpartially on the grounds of being anin-state company.

The company claimed if theywere awarded the contract it wouldhire at least 85 people to build themachines.“The purchasing ought tobe geared more toward allowing in-state distributors the right to get apercentage (price advantage) forbeing in-state and hiring SouthCarolina people,” said state Sen. JakeKnotts, R-Lexington, supportingPalmetto Unilect.56

State law requires a “SouthCarolina vendor preference,” whichUnilect officials said was not includedin the state’s request for proposal. Thisclaim was rebuffed, however, by thestate procurement office, stating that itdid not apply in this case because thesewere sealed competitive bids.57

Ultimately, Palmetto Unilect gotanother chance to bid – but not onthe basis of an in-state preference.Rather, the state reopened biddingbecause ES&S’s winning bid did notprovide fixed prices for some itemsover the duration of the contract, ashad been specified. In mid-July 2004,ES&S was again awarded the contract.

In other cases, local vendorshave had the advantage of alreadyhaving done business with theirhome state.

Indianapolis-based QuestInformation Systems recently won itsbid to create a statewide voter regis-tration database for Indiana.TheSecretary of State’s office not onlynoted the company’s Indiana roots inits announcement, but also men-tioned the extensive work the elec-tions division and the company hadalready done together, including proj-ects such as the state’s campaignfinance reporting system.58

Similarly, in Oregon, the statechose a local vendor with which ithad a history with to set up itsstatewide registration database.Salem-based Saber Consulting won a$10.5 million contract in August2003.The company is partneringwith two other Oregon-basedorganizations for this project.

The company estimates thecontract will create over $800,000in information technology jobs inthe state.

“This project is about Oregoncompanies delivering world-classvalue to Oregon clients for the citi-zens and taxpayers of Oregon….thechoice of Saber keeps $10.5 millionin Oregon for the creation andretention of Oregon jobs,” the com-pany said in a statement.59

Home-State Advantage



advent of direct-recording electron-ic (DRE) systems that recordedvotes electromagnetically ratherthan on paper ballots.

From the large, push-buttonDREs that closely resembled theelderly lever machines, ATM-stylemachines emerged – paperless, ableto display multiple character setsand impossible to over-vote. Voterscould be warned of non-votes andcould review their ballots beforethey were cast. And people with dis-abilities, particularly blind voters,could cast ballots secretly and inde-pendently, many for the first time intheir lives.

Family Ties,Ex-Election Officials and IBM Veterans

After years of being largelyignored, the business of selling elec-tion systems has become increasing-ly public, with intense media scruti-ny into the integrity, security andaccuracy of all types of equipment.

Not so well known are the closeties many of those selling voting sys-tems have to companies that pro-duced the punch cards their compa-nies are seeking to replace, the posi-tions some election system officials

held and, in one instance, the familybonds that tie the two largest votingmachine companies. A few examples:

• Alfie Charles, a spokesman forSequoia Voting Systems, joinedthe company in 2002 after work-ing for seven years as press sec-retary in California Secretary ofState Bill Jones’ office – the sameoffice which spearheaded thepassage of a $200 million bondmeasure to replace punch cardsin the state. Sequoia also hiredJones himself as a consultant in2003 – one month after theMercury News reported that hewrote letters to Santa ClaraCounty’s Board of Supervisorsassuring them the company’sDREs were reliable.25 A compa-ny press release also notedCharles joined KathrynFerguson, the company’s vicepresident of governmental rela-tions and public affairs.26

Ferguson, who was hired by thecompany in 2001, was the for-mer election chief in ClarkCounty, Nevada, the state’slargest. Nevada opted for astatewide system of Sequoiatouch-screen machines in 2003.

Clark County opted for theSequoia DRE machines farahead of the state, using themsince the mid-1990s.27

• DRE maker Unilect is headedby Jack Gerbel, who startedwith IBM then founded CES.The company Web site notesthat Gerbel “had at that timethe distinction of personallyselling and installing more suc-cessful election systems thanany other person in the U.S.”28

CES was one of two companiesthat had the rights to purchaseIBM’s punch-card voting sys-tems after the company got outof the business in 1969.

• Nebraska-based ElectionSystems and Software (ES&S)hired Sandra Mortham, a lob-byist who, in 2002 sold thecompany’s touch-screen votingsystems to Florida counties. Sheserved as secretary of state from1995 to 1999 and also split timebetween her ES&S lobbyingduties and those she performedfor the Florida Association ofCounties, reported TheAssociated Press in The St.Petersburg Times in 2002.Mortham told the paper shewas not involved in the decisionby the association to endorsethe ES&S touch screens, whichare now used in two of Florida’smost populous counties,Miami-Dade and Broward.29

• The nation’s two largest elec-tion system manufacturers,Diebold Election Systems andES&S share more than a heftychunk of the voting machinesbusiness. They share theUrosevich brothers. ToddUrosevich, who has spent near-

Not so well-known are the close ties many ofthose selling voting systems have to compa-nies that produced the punch cards theircompanies are seeking to replace, the posi-tions some election system officials held and,in one instance, the family bonds that tie thetwo largest voting machine companies.

dragged down by little chads. A New Yorker Magazine article

about voting systems concerns pub-lished in 1988 detailed some of IBM’stroubles. During California’s June1968 primary, punch cards could notbe brought into a tabulating centerbecause of the nearby shooting ofSen. Robert F. Kennedy. “Reporterswere worried about the delay andofficials at IBM began to wonder seri-ously about the election business,which, comparatively speaking, wasproviding only a small profit.”22

Problems continued that year,the article stated, when during theNovember election, tabulatingmachines for precincts in Missoula,

Montana mistakenly counted ballotscast for Hubert Humphrey forRichard M. Nixon and vice-versa.

But, the article continued, thedefining moment that convincedthe company to leave the businesswas an article in a suburbanChicago newspaper suggested thatIBM had entered the election busi-ness so that Thomas Watson, thecompany’s chairman, “wouldbecome president.”

That might have solidified adecision to leave the market thatwas already in the works.



designed to make voting secret,simple and less susceptible to fraud.But the system later proved to bevulnerable to tampering by thosewith access to the vote tallies.20

By the 1930s, lever machineswere ubiquitous, but not withouttheir problems. Newer technology –punch-card machines – was adoptedby many jurisdictions in the 1960s.Punch cards allowed faster tabula-tions and permitted an examinationof each individual vote; ironically, afeature memorably displayed inSouth Florida in November 2000.Punch cards also marked the entryof the first significantly-sized com-pany into the voting system market.

In 1965, IBM – a company thathad made punch cards for decadesbefore – purchased HarrisVotomatic, the company that hadbeen producing the punch-cardmachines for localities in Oregon,Georgia and California.21 It did not,however, take long for Big Blue toexit the market four years later.

What led IBM to leave theelection business is strikingly simi-lar to the controversies modern vot-ing machine manufacturers face. Infact, the same fear of technology,suspicion of programmers and con-cerns about the inability to discernvoter intent dogged IBM as much35 years ago as it does Diebold,ES&S, Sequoia and other manufac-turers in 2004.

Computer Giant Finds Great Risks,Few Rewards

The trouble with punch cardsstarted in the Golden State in 1968.According to one former IBM sales-man who sold the company’sVotomatic punch cards inCalifornia, Big Blue was being

“You have to remember thatIBM had almost no negative publici-ty at the time, so the fact that therewere questions about the Votomatic[punch-card] system seemed to bequite important to them,” said RoySaltman, an independent consultanton election policy and technology.“There’s a lot of downside and riskin this industry. The risk of negativepublicity is strong. If it’s only a smallpart of your business, why wouldyou let yourself be involved if it’snot important for your bottom line?IBM did right – they got rid of it.”23

With IBM’s departure, the elec-tion business was predominantly leftto small companies that dealt exclu-

sively with elections, or in somecases, printing and forms. Big Blue’spunch-card business spun off twocompanies, Electronic VotingMachine (E.V.M.) and ComputerElection Systems (C.E.S.) Theother names in elections through-out the past four decades werehardly household: Cronus and R. F.Shoup, to name a few. Meanwhile,better-known computer firm Unisysdeveloped the optical scanner, butpromptly left the election businessbecause it was not profitable.24

Innovation continued with the

The same fear of technology, suspicionof programmers and concerns about theinability to discern voter intent doggedIBM as much 35 years ago as it doesDiebold, ES&S, Sequoia and other manu-facturers in 2004.



Lobbying ExpendituresSTATE CLIENT LOBBYIST DATES COMPENSATION EXPENSES TOTALCALIFORNIA DIEBOLD ROSE & KINDELL APRIL - JUN 2002 $10,000 $0

JULY - SEPT. 2002 $15,020 $0JULY - SEPT 2003 $7,500 $0OCT. - DEC. 2003 $22,560 $0JAN. - MARCH 2004 $15,000 $9,015.58TOTAL $70,080 $9,016 $79,096

ES&S CAPITAL CONNECTION JAN. - MARCH 2004 $15,000 $0 TOTAL $15,000 $0 $15,000

CONNECTICUT SEQUOIA GAFFNERY, BENNETT & ASSC. 2001 $74,200 $0 2002 $42,400 $0 2003 $46,050 $0 TOTAL $162,650 $0 $162,650

INDIANA ES&S ICE MILLER JAN. - JUNE 2001 $12,000 $82.20 BINGAM MCHALE JULY - DEC. 2001 $30,000 $591.14

JAN. - JUNE 2002 $15,000 $293.43 JULY - DEC. 2002 $15,318 $775.73 TOTAL $72,318 $1,742.50 $74,061

NEW YORK SEQUOIA BULEY PUBLIC AFFAIRS JAN. - JUNE 2003 $45,000 $12,895 JULY - DEC. 2003 $45,000 $2,461 JAN - FEB. 2004 $15,000 $16 TOTAL $105,000 $15,372 $120,372

O'DWYER & BERNSTIEN JULY - DEC. 2003 $60,000 $25 TOTAL $60,000 $25 $60,025

ES&S BULEY PUBLIC AFFAIRS ??? 2002 $36,000 $14,618 TOTAL $36,000 $14,618 $50,618

DAVIDOFF & MALITO JULY - DEC. 2003 $60,000 $3,822 JAN. - FEB. 2004 $20,000 $1,679 TOTAL $80,000 $5,501 $85,501

DIEBOLD GREENBERG TRAURIG JAN. - JUNE 2003 $75,000 $0 JULY - DEC. 2003 $75,000 $0 JAN. - FEB. 2004 $25,000 $0 MARCH - APRIL 2004 $25,000 $0 TOTAL $200,000 $0 $200,000

All lobbyist compensation and expenditure reporting includes only documents filed electronically and made available onlinethrough individual state websites. Not all states require lobbyists to file reports electronically, nor do they make theinformation available online. Federal lobbyists’ compensation and expenditure reports are not available online. Principaland lobbyists names were gathered from states that provide the information online.



Federal Lobbyist ExpendituresPRINCIPAL FEDERAL LOBBYIST DATES COMPENSATION EXPENSES TOTALDIEBOLD DAVID DISTEFANO JAN. - JUNE 2003 $30,000 $0

JULY - DEC. 2003 $20,000 $0 TOTAL $50,000 $0 $50,000

ES&S SUSAN PETNIUNAS JAN. - JUNE 2001 $20,000 $0 JULY - DEC. 2001 $20,000 $0 JAN. - JUNE 2002 $20,000 $0 JULY - DEC. 2002 $20,000 $0 JAN. - JUNE 2003 $20,000 $0 TOTAL $100,000 $0 $100,000

VOTEHERE, INC. JENNIFER CURLEY JAN. - JUNE 2001 $80,000 $0 JULY - DEC. 2001 $0 $120,000JAN. - JUNE 2002 $0 $220,000 JULY - DEC. 2002 $0 $140,000

BARRY RHOADS JAN. - JUNE 2002 $60,000 $0 TOTAL $140,000 $480,000 $620,000

Diebold Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTAMES-FORSYTHE, ANNE PAWLENTY, TIM GOV. R - MN 20-NOV $125BOCKIUS, LOUIS V. III BOARD OF DIRECTORS STARK COUNTY REPUBLICAN PARTY R - OH 12-FEB $1,000

TAFT, BOB GOV. R - OH 21-JUN $2,500CONNOR, CHRISTOPHER BOARD OF DIRECTORS MONTGOMERY, BETTY - AG R - OH 19-MAR $250

16-APR $25017-JUL $100

TAFT, BOB GOV. R - OH 14-SEP $1,00005-NOV $1,000

DETERS, JOSEPH - TREASURER R - OH 13-JUN $100DETTINGER, WARREN VP TAFT, BOB GOV. R - OH 20-NOV $1,000GESWEIN, GREGORY SENIOR VP & CFO TAFT, BOB GOV. R - OH 25-JUL $2,500MAHONEY, ROBERT CHAIRMAN EMERITUS VOINOVICH, GEORGE SEN. R - OH 23-MAR $250

RNC STATE ELECTIONS COMMITTEE R - OH 11-OCT $2,000STARK COUNTY REPUBLICAN PARTY R - OH 24-JAN $1,500TAFT, BOB GOV. R - OH 28-JUN $2,000

O'DELL, WALDEN PRES. & CEO RNC STATE ELECTIONS COMMITTEE R - OH 30-JAN $3,95014-FEB $2,015

VOINOVICH, GEORGE SEN. R - OH 16-AUG $500TAFT, BOB GOV. R - OH 02-JUL $2,500

TIMKEN, WILLIAM R. BOARD OF DIRECTORS RNC STATE ELECTIONS COMMITTEE R - OH 24-JAN $5,02226-APR $30,000

NRCCC - NON FEDERAL #2 R 25-APR $5,000OH REP. PARTY CANDIDATE FUND R - OH 06-JUN $16,500SCHURING, KIRK REP. R - OH 05-JUN $2,000TAFT, BOB GOV. R - OH 21-JUN $2,500PETRO, JIM - AUDITOR R - OH 28-DEC $2,500BLACKWELL, KENNETH SOS R - OH 20-DEC $2,500SIMON, BILL - CANDIDATE FOR GOV. R - CA 12-SEP $1,000

SCHEURER, CHARLES VP TAFT, BOB GOV. R - OH 18-JUN $500VANCE, WESLEY PRES. NORTH AMERICA VOINOVICH, GEORGE SEN. R - OH 16-AUG $500

TAFT, BOB GOV. R - OH 02-JUL $2,500DIEBOLD INC. REPUBLICAN NATIONAL COMMITTEE R 06-MAR $5,000

05-SEP $25,000ROSEMONT VOTERS LEAGUE N/A 31-JAN $1,075




Voting SystemManufacturers Then andNow – A Brief History

Until recently, few people inthe country, other than those whopurchased and maintained votingmachines, paid any attention to thecompanies that made those systems.Prior to 2000, few even consideredwhat they voted on, much less whomanufactured the lever, punch-cardor optical-scan machine on whichthey cast their ballots.

The rush to replace maligned,older voting technologies has creat-ed a highly competitive and poten-tially lucrative market for compa-nies seeking to sell upgraded votingsystems to states and localities.

For consumers – states, localitiesand the voters who will use thenewer systems to cast ballots – themarket has driven innovation, result-ing in easy-to-use ballot formats thatcan allow for multiple languages andcharacter sets, accessible voting forvoters with certain disabilities, porta-bility, flexibility, quicker tabulations,and vastly diminished rates ofuncountable ballots.

According to the FederalElection Commission, 19 compa-nies produce, “computerized votetabulation systems.” A handful wereformed after the troubled 2000election, started by entrepreneurswho predicted a rich market asstates phased out punch cards andlever systems in favor of opticalscan and direct-recording electronic(DRE) voting machines.

The Gold Rush that Wasn’t

With federal money, statematching funds and strong localinterest nationwide to avoid “anoth-er Florida,” the election systemmarket in recent years has beentransformed from a little-noticedindustry dominated by a few compa-nies into a cutthroat business com-plete with lawsuits, front-page newsreports and public relations blitzes –including newspaper advertisementsand even highway billboards.

After the 2000 election, itseemed clear that punch-card andlever voting systems would bephased out across the country. TheHelp America Vote Act (HAVA) of2002 promised the states $325 mil-lion to replace or upgrade these vot-ing systems, and mandated the pur-chase of at least one voting machineper polling place that was accessiblefor voters with disabilities.

The once-stagnant electionmarket seemed to resemble a goldrush, with the lure of nearly $4 bil-lion in federal funds for states tobuy new election equipment.

The rush failed to pan out formany companies – at least in theimmediate aftermath of the 2000election. HAVA funds weredelayed, held up by the lateappointment of the ElectionAssistance Commission and budgetcomplications. The authorized$3.86 billion has still not been fullyappropriated, nearly four years afterthe 2000 election.

These money shortages at thelocal level, combined with lingeringquestions about the security andreliability of paperless voting sys-tems, contributed to growing finan-cial troubles for voting system man-ufacturers – troubles that are begin-ning to show up on the bottom line.

Sequoia Pacific Voting Systems,the second largest DRE vendor inthe country, reported sales up 75percent in 2003, but margins fell,causing a $3.5 million operatingloss. Its parent company, London-based De La Rue, could dump thecompany, reported one story.17

The largest DRE vendor,Diebold Election Systems has suf-fered even more, with operatingprofits plummeting 32 percent in2003 while revenues fell 10 percentto $100 million.18 However, thecompany began to show signs of arecovery in 2004 with revenuesfrom election systems surging from$7.7 million to $27.1 million.19

A History of VotingMachine Companies

The companies that sell the newmachinery have faced a difficult roadat times. Manufacturers have bothinjected themselves into the world ofpolitics and found themselves thesubject of intense criticism, conspira-cy theories and government scrutiny.

Voting machines began replac-ing paper ballots in the first half ofthe 20th century, when the levermachine began to be used in a num-ber of states. The mechanical leversystem, invented in 1892, was

The Industry



Political activity by corporations

is nothing new to the American

political scene. While reports of

campaign contributions and lobbying

activity by voting equipment manu-

facturers represent a new develop-

ment in the implementation of the

Help America Vote Act (HAVA), the

fact that profit-making enterprises

are willing to invest to influence

public policy is not surprising.

The growing scrutiny of such

activity, however, is likely to trigger a

variety of responses that act to put

checks on political giving by election

companies – requirements that

could alter the relationships

between voting equipment manufac-

turers and their clients in state and

local government.

One response to public outcry

about corporate political contribu-

tions is for companies simply to stop

making them.This is the approach

adopted by Ohio-based Diebold Inc.,

parent company of Texas-based

Diebold Election Systems, which

recently announced that all execu-

tives with oversight of the elections

division would be prohibited from

making,“contributions to, directly or

indirectly, any political candidate,

party, election issue or cause, or par-

ticipate in any political activities,

except for voting." The change also

applies to all employees and execu-

tives of Diebold Election Systems.13

The policy was adopted by the

company’s board of directors after

the controversy generated by

Walden O’Dell, Diebold’s CEO, in

2003, when he made the now-infa-

mous pledge to “[help] deliver

Ohio’s electoral votes” to President

Bush in a fundraising letter.14

Another approach is for the

affected governments to prohibit

political contributions. Federal law

prohibits political contributions by

federal contractors, although this

prohibition does not apply to state

and local programs supported by

federal funds.15

Similarly, many state and local

laws prohibit contributions by com-

panies doing business with their

jurisdictions. Some jurisdictions go

further to prohibit contributions by

companies seeking to obtain pro-

curement contracts. As HAVA

implementation continues and pro-

curement activity accelerates, it will

be interesting to see if and how

such laws are enforced in the voting

technology context.

A third approach is to limit

procurement activities by compa-

nies making political contributions.

One example is the U.S. Municipal

Securities Rulemaking Board’s Rule

G-37, which seeks to combat the

practice of “pay to play” in the

municipal bond industry by prohibit-

ing certain municipal finance per-

sonnel and their employers from

seeking underwriting business from

any jurisdiction within two years of

making a political contribution to an

official with the authority to influ-

ence the choice of underwriter.16

Although there are no current

laws with similar reach in the voting

technology industry, such a narrow,

targeted reaction to the growing

political activity by voting equipment

manufacturers is certainly possible as

the relationship of vendors and poli-

cymakers comes into sharper focus.

Whatever the eventual

response, if any, of policymakers to

the political activity of election ven-

dors, it is certain that scrutiny of

such activity by advocates and the

general public will be another key

consideration in the ongoing imple-

mentation of HAVA nationwide.

Vendors Face Growing Scrutiny Over Contributions

pensation and expenditures for fed-eral lobbying activities.

Diebold, with lobbyists operat-ing in 10 states, paid $50,000 in2003 for federal lobbying activitiesand Sequoia hired lobbyists in ninestates and none at the federal level.

Diebold, ES&S, and Sequoiaall had lobbyist representatives inArkansas, Louisiana, New York

and Ohio. Hart InterCivic had representa-

tives in Ohio and Texas, andVoteHere engaged lobbyists in itshome state of Washington.

At the federal level, VoteHerespent $620,000 from January 2001to December 2002. The majorityof the money went toward officeoperations and support of legisla-

tion involving election reform,military voting, election systemand standards and online votingincluding the Ney-Hoyer electionreform bill (H.R. 3295), the Doddreform bill (S. 565), and theDepartment of Defense authoriza-tion and appropriations bills.



Diebold Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTBUCCI, DAVE SENIOR VP TAFT, BOB GOV. R - OH 05-OCT $250BOCKIUS, LOUIS V. III BOARD OF DIRECTORS STARK COUNTY REPUBLICAN PARTY R - OH 05-FEB $1,000

SCHURING, KIRK REP. R - OH 06-MAY $2,50004-JUN $2,500

TAFT, BOB GOV. R - OH 07-JUN $2,500WYOMING REPUBLICAN PARTY R - WY 01-MAY $200

CONNOR, CHRISTOPHER M. BOARD OF DIRECTORS VOINIVICH, GEORGE SEN. R - OH 21-AUG $1,000TAFT, BOB GOV. R - OH 27-SEP $500HOUSEHOLDER, LARRY REP. R - OH 10-MAY $1,000MONTGOMERY, BETTY - AUDITOR R - OH 06-APR $250

10-MAY $1,000STRATTON, EVELYN - SUPREME COURT JUSTICE R - OH 19-JUL $1,000

12-SEP $500DETTINGER, WARREN VP TAFT, BOB GOV. R - OH 05-OCT $250FRANCIS-VOGELSANG, CHAREE VP & SEC SCHURING, KIRK REP. R - OH 24-SEP $70FRAZZITTA, BARTHOLOMEW VP TAFT, BOB GOV. R - OH 05-OCT $250GESWIN, GREG SENIOR VP & CFO TAFT, BOB GOV. R - OH 05-OCT $2,000INGRAM, LARRY VP SCHURING, KIRK REP. R - OH 24-SEP $35KRAKORA, KEVIN VP SCHURING, KIRK REP. R - OH 24-SEP $35LAUER, JOHN N. BOARD OF DIRECTORS VOINIVICH, GEORGE SEN. R - OH 21-AUG $1,000

REGULA, RALPH S. REP. R - OH 13-AUG $250REPUBLICAN SENATE CAMPAIGN COMMITTEE OF OH R - OH 07-JUN $500TAFT, BOB GOV. R - OH 21-MAR $1,000

17-SEP $250OH HOUSE REPUBLICAN CAMPAIGN COMMITTEE R - OH 10-JUN $500STRATTON, EVELYN - SUPREME COURT JUSTICE R - OH 19-FEB $1,000

MAHONEY, ROBERT CHAIRMAN EMERITUS STARK COUNTY REPUBLICAN PARTY R - OH 09-JAN $1,000OELSLAGER, SCOTT REP. R - OH 16-SEP $100OHIO REP. PARTY STATE CANDIDATE FUND R - OH 28-MAR $1,000

17-OCT $1,000TAFT, BOB GOV. R - OH 13-MAY $2,500

O'DELL, WALDEN PRES. & CEO TAFT, BOB GOV. R - OH 09-MAY $2,500SCHEURER, CHARLES VP TAFT, BOB GOV. R - OH 05-OCT $500TIMKEN, WILLIAM R. BOARD OF DIRECTORS RNC REPUBLICAN NATIONAL STATE ELECTIONS CMT. R - OH 10-OCT $40,000

BLACKWELL, KENNETH SOS R - OH 09-OCT $2,500DETERS, JOSEPH - TREASURER R - OH 11-OCT $2,500O'CONNOR, MAUREEN - STATE SUPREME COURT R - OH 18-OCT $2,200OH REPUBLICAN CAMPAIGN COMMITTEE R - OH 05-DEC $3,000REPUBLICAN SENATE CAMPAIGN COMMITTEE OF OH R - OH 19-NOV $3,000SIMON, BILL - CANDIDATE FOR GOV. R - CA 30-JUN $1,000SCHURING, KIRK REP. R - OH 06-MAY $2,500

24-MAY $2,500STRATTON, EVELYN - SUPREME COURT JUSTICE R - OH 10-OCT $2,200OH REPUBLICAN PARTY STATE CANDIDATE FUND R - OH 03-MAY $16,500TAFT, BOB GOV. R - OH 15-MAY $2,500

VANCE, WES PRES. NORTH AMERICA TAFT, BOB GOV. R - OH 13-MAY $2,500SCHURING, KIRK REP. R - OH 24-SEP $70

WALLACE, HENRY D.G. BOARD OF DIRECTORS MONTGOMERY, BETTY - AUDITOR R - OH 03-MAY $48DIEBOLD INC. REPUBLICAN NATIONAL COMMITTEE R 08-FEB $25,000

01-MAY $15,00019-SEP $25,000

CUPAC 17-JUN $100ROSEMONT VOTERS LEAGUE N/A 29-JAN $1,075




Diebold Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTBUCCI, DAVID SENIOR VP VOINOVICH, GEORGE SEN. R - OH 29-JUN $1,000

BUSH, GEORGE W. R 26-JUN $2,000BOCKIUS, LOUIS V. III BOARD OF DIRECTORS STARK COUNTY REPUBLICAN PARTY R - OH 10-FEB $1,000

02-APR $1,000BUSH, GEORGE W. R 24-JUN $2,000

CONNOR, CHRISTOPHER BOARD OF DIRECTORS VOINOVICH, GEORGE SEN. R - OH 13-AUG $1,000BUSH, GEORGE W. R 26-JUN $2,000DEWINE, MIKE SEN. R - OH 23-JUL $2,000CARE PAC R 29-DEC $500MONTGOMERY, BETTY - AUDITOR R - OH 19-NOV $500DETERS, JOSEPH - TREASURER R - OH 25-SEP $250

CROWTHER, JOHN M. CIO BUSH, GEORGE W. R 27-AUG $2,000D'AMICO, THOMAS R. VP BUSH, GEORGE W. R 03-SEP $2,000

VOINOVICH, GEORGE SEN. R - OH 21-JUN $500DETTINGER, WARREN W. VP VOINOVICH, GEORGE SEN. R - OH 25-JUN $500DIMMITT, WILLIAM R. SERVICE TECH. NATIONAL REP. CONGRESSIONAL COMMITTEE R 02-APR $200FRAZITTA, BART VP BUSH, GEORGE W. R 26-JUN $1,000

29-SEP $1,000GESWIN, GREGORY T. SENIOR VP & CFO VOINOVICH, GEORGE SEN. R - OH 30-JUN $2,000

BUSH, GEORGE W. R 26-JUN $2,000HILLOCK, JENNIFER L. BUSH, GEORGE W. R 27-AUG $2,000HILLOCK, MICHAEL J.. INTERNATIONAL PRES. VOINOVICH, GEORGE SEN. R - OH 21-JUN $2,000

BUSH, GEORGE W. R 26-JUN $2,000HOOVER, TIMOTHY EMPLOYEE SCHURING, KIRK REP. R - OH 02-OCT $50INGRAM, LARRY D. VP BUSH, GEORGE W. R 15-SEP $1,000

26-JUN $1,000LAUER, JOHN N. BOARD OF DIRECTORS VOINOVICH, GEORGE SEN. R - OH 09-AUG $2,000

18-NOV $1,000MAHONEY, ROBERT CHAIMAN EMERITUS CARE PAC R 30-NOV $250

VOINOVICH, GEORGE SEN. R - OH 29-JUN $1,000STARK COUNTY REPUBLICAN PARTY R - OH 13-JAN $1,000BUSH, GEORGE W. R 06-JUN $2,000

O'DELL, WALDEN PRES. & CEO VOINOVICH, GEORGE SEN. R - OH 25-JUN $2,000BUSH, GEORGE W. R 12-JUN $4,000

08-AUG $2,000ROSENBERG, WILLIAM VP BUSH, GEORGE W. R 19-SEP $2,000SCHEURER, CHARLES B. VP VOINOVICH, GEORGE SEN. R - OH 21-JUN $500

BUSH, GEORGE W. R 27-AUG $2,000SCHURING, KIRK REP. R - OH 05-JUN $100OELSLAGER, SCOTT SEN. R - OH 28-OCT $100

SWIDARSKI, THOMAS SENIOR VP BUSH, GEORGE W. R 09-JUL $2,000TIMKEN, WILLIAM R. BOARD OF DIRECTORS DEWINE, MIKE SEN. R - OH 11-MAR $1,000

VOINOVICH, GEORGE SEN. R - OH 21-JUN $2,000MCCOLLUM, BILL 2004 CAMPAIGN R - FLA. 27-AUG $1,000NATIONAL REP. SENATORIAL CAMPAIGN R 09-JUN $8,500

20-JUN $8,500CARE PAC R 31-DEC $5,000STARK COUNTY REPUBLICAN PARTY R - OH 20-FEB $2,000

24-OCT $1,500BUSH, GEORGE W. R 02-JUN $2,000REPUBLICAN NATIONAL COMMITTEE R 22-DEC $20,000

UROSOVICH, ROBERT PRESIDENT DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE D 18-DEC $2,500REPUBLICAN $105,950DEMOCRAT $2,500TOTAL $108,450

Sequoia’s bottom line. Was it money well spent? With

Shelley’s demand for voter-verifiedpaper audit trails, he has often been atodds with DRE manufacturers, whoinsist their products are safe and reli-able without paper receipts. Shelleyhas particularly had public differenceswith Riverside County registrarMischelle Townsend, one of theindustry’s most vocal backers of DREsnationally, and a Sequoia customer.11

LobbyingVendors have also paid for lob-

bying efforts at both the state andfederal level.

Analysis of these reports ismore problematic, given the widerange of state lobbying disclosurerequirements. For example, manylobbyist reports analyzed for thisstudy did not require lobbyists toinclude targeted officials or legisla-tion, but rather stated that generallyboth House and Senate officialswere lobbied.12

Moreover, lobbying expenses,compensation and expenditures var-ied from vendor to vendor withheavier activity in states consideringlarger contracts, such as California,New York and Ohio.

Nevertheless, even a cursorylook at state lobbying reports sug-gests that companies are activelyengaged in lobbying as part of theirbusiness efforts.

Between 2001 and 2003Diebold, ES&S, Hart InterCivic,Sequoia and VoteHere engaged lob-byists in 21 states and several at thefederal level.

ES&S employed the most lob-byists at the state level with lobby-ists registered in 14 states fromJanuary 2001 to June 2003. ES&Sspent a total of $100,000 on com-


$200 million bond for the purchaseof new voting systems. Nearly two-thirds of voters had previously beenusing punch-card machines.

Sequoia and ES&S were the toptwo contributors in the effort to passProposition 41, donating $100,000and $50,000 respectively. Theirefforts – which funded advertise-ments, a Web site and other activities– helped to nudge the Act over thetop in the March 2002 primary. Itwon with 51.6 percent of the vote onthe strength of strong majorities injust a few populous counties, includ-ing Los Angeles, San Francisco andMarin.9

But the influence that votingmachine companies buy with theircontributions is not at all clear.

Home-State GivingIf political contributions were

exclusively to curry favor amongstate voting decision-makers, thequestion arises: why did Dieboldgive so much money in Ohio, whereonly a handful of counties arereplacing voting systems this year,and none in Maryland and Georgia,two states that decided to purchasemulti-million dollar statewide vot-ing systems from the company?10

It could have to do withDiebold’s other business, banking,and because of its relationship withtop leaders in its home state, Ohio.Other companies, including HartInterCivic, ES&S and Sequoia, havesimilarly made contributions tohometown candidates, politicalaction committees, or both.

Sequoia, for example, con-tributed $2,000 to Secretary ofState Kevin Shelley’s election effortsin 2002. As the state’s top electionofficial, Shelley is directly responsi-ble for making decisions that impact

tions to Republicans andDemocrats. Republicans received$21,900 and Democrats $24,550.

Contributions from California-based Sequoia Voting Systemstotaled $3,500 to Republicans and$18,500 to Democrats. Texas-basedHart InterCivic made the smallestcontributions – totaling just over$6,000 with $3,750 to Republicansand $2,500 to Democrats.

Furthermore, political contribu-tions by voting machine manufac-turers to political parties and candi-dates could drop precipitously in thenear future. Diebold decided in June2004 to ban top executives frommaking any political contributions.7

According to a companyspokeswoman, ES&S has a policyagainst contributions by employeesin the company's name.8 This, how-ever, is offset by federal and staterequirements that donors disclosetheir employers.

While other companies havenot faced the same criticism asDiebold for political involvement,the decision by the company couldinspire others in the industry to stayout of elections, other than withtheir products.

Case Study in Influence:California’s Bond

There have been instanceswhere political activity by votingmachine vendors has had an impacton policy. The 2002 effort to securepublic funding for the purchase ofvoting systems to replace punchcards in California attracted theattention and support of two of the“big five” voting machine compa-nies: Sequoia and ES&S.

The Voting ModernizationBond Act of 2002, or Proposition41, would allow the state to secure a




past three years. Contrary to many conspiracy

theories that align voting machinecompanies with the Republican Party,voting machine companies are prag-matic in their political contributions.

In California, a state largelydominated by Democrats, votingmachine manufacturers have givento Democratic candidates. Similarly,in Republican-controlled Ohio, theGOP has been, by and large, theprimary recipient of voting machinecompany contributions.

Ohio-based Diebold, Inc.(which owns Diebold ElectionSystems) is most frequently cited asshowing partisan bias in its politicalgiving, and the numbers bear thisout. Figures show that the companywas the largest contributor of thevoting machine vendors to theRepublican Party, politicians andcandidates between 2001 and early2004.4 During this period, contribu-tions from Diebold and its executivestotaled $409,170 for Republicansand $2,500 for Democrats.5

Yet, these large numbers mask

two key differences betweenDiebold and its competitors: scopeof operations and transparency.

Scope of operations. Unlike itsrivals Election Systems & Software(ES&S), Hart InterCivic and SequoiaVoting Systems, companies that con-centrate solely on the manufacturingand distribution of voting machinesoftware and systems, Diebold Inc.engages in multiple business activi-ties with the majority of revenuestemming from the sale and mainte-nance of automatic teller machinesworldwide.6 Consequently, any analy-sis of Diebold’s political activity thatassociates every contribution with thecompany’s voting machine businessruns the risk of misleading the read-er.

Transparency. Moreover, unlikeits rivals, Diebold is a public com-pany and as such is much moretransparent in terms of corporateleadership. This, in turn, makes iteasier to identify and aggregatecontributions associated with thecompany. Also, the company’sbroader scope means that not allDiebold officers and directors whohave made political donations havea hand in the operation of the elec-tion systems division – in fact, manyplay dual roles in the company’sactivities. In addition, many of thecontributions are made by directorsnot involved in the day-to-dayoperation of the comapny.

Even Distribution Diebold aside, it appears that

political contributions by theother voting machine manufactur-ers are relatively small and fairlyevenly distributed between the twomajor parties.

Nebraska-based ES&S and itsexecutives made nearly equal dona-

activity especially troubling. “We all know that democracy

largely depends on the credibility ofthe process,” she said. “As youknow, there were rumors that themachines were going to be allrigged because [O’Dell] was a Bushcontributor. When you get to thisarea about the integrity of elections,it’s very important that there be noconflict of interest and no appear-ance of conflict of interest.”

Partisan GivingPreviously dominated by a

handful of companies, the marketfor electronic voting machines hasexpanded to 19 known vendorscompeting for multi-million dollarstate and local contracts.3

electionline.org’s analysis suggeststhat as the manufacturers joust formarket share around the country,there is no industry-wide partisantrend to political contributions.And, in fact, these contributionsmight not have been that significantin the burgeoning election machinemarket that has developed in the


DIEBOLD

$409,170

$2,500

SEQUOIA

$3,500

$18,500

ES&S

$24,550 $21,900

HART INTERCIVIC

$2,500 $3,750

TOTAL TO PARTIES

$48,050

$438,320



Partisan Contributions Summary2001 - 2003



ES &S Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTES&S MARION COUNTY DEM. CENTRAL COMMITTEE D - IN 31-JUL $450

MADISON COUNTY DEM. CENTRAL COMMITTEE D - IL 24-JAN $250SENATE DEM. 2002 OF CT. D 21-JUL $250

CARBULLIDO, KEN DIRECTOR VIGIL-GIRON, REBECCA - SOS D - NM 13-DEC $2,500GROH, JOHN DIRECTOR NRCCC R 13-NOV $300MCCARTHY, MICHAEL DIRECTOR JOHANNS, MIKE GOV. R - NE 5-JUN $1,000

BALLENGER, JEFFREY - CANIDATE FOR CONGRESS R - IA 14-NOV $250SANDHILLS PAC R - NE 29-AUG $5,000

REPUBLICANS $6,550DEMOCRATS $3,450TOTAL $10,000

ES &S Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTES&S GALE, JOHN - SOS R - NE 05-SEP $500

16-SEP $500SHELLEY, KEVIN - SOS D - CA 27-FEB $10,000

28-JUN $10,000YES ON PROP 41 - VOTING MODERNIZATION N/A 25-FEB $50,000HETTEL, JOE - LASALLE COUNTY STATE’S D - IL 12-AUG $550ATTORNEY. CANDIDATEABELL, MARSHA - CANDIDATE FOR HOUSE R - IN 12-AUG $600HOUSE REP. CAMPAIGN COMMITTEE OF CT R - CT 06-FEB $250WA STATE REP. PARTY R - WA 17-OCT $500

DONESON, LOUIS FIELD REP. OHIO STATE REPUBLICAN PARTY R - OH 04-NOV $750MCCARTHY, MICHAEL DIRECTOR HAWKS, HOWARD - BOARD OF REGENTS U OF NE N/A 09-APR $1,000

THUNE, JOHN - CANDIDATE FOR SENATE R - SD 21-AUG $1,000AMERICAN AGRISURANCE ASSOCIATION PAC N/A 07-JAN $5,000SANDHILLS PAC R - NE 29-APR $5,000

REPUBLICAN $9,100DEMOCRAT $20,550OTHER $56,000TOTAL $85,650

ES &S Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTES&S GREATER INDIANAPOLIS REP. FINANCE COMMITTEE R - IN 29-AUG $1,250

HETTEL, JOE - LASALLE COUNTY STATE'S D - IL 05-AUG $550ATTORNEY. CANDIDATE

MCCARTHY, MICHAEL DIRECTOR SANDHILLS PAC R - NE 17-OCT $5,000REPUBLICAN $6,250DEMOCRAT $550TOTAL $6,800



Hart InterCivic Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTFARMER, JOHN BOARD OF DIRECTORS NATL. ASSC. OF SMALL BUSINESS INVESTMENT CO. PAC 9-JUL $500

Hart InterCivic Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTHART, DAVID CHAIRMAN BENTZIN, BEN - CANDIDATE FOR SENATE R - TX 24-SEP $250

CORYN, JOHN SEN. R - TX 12-JUN $1,000KILCREASE, LAURA BOARD OF DIRECTORS WATSON, KIRK - CANDIDATE FOR ATTNY. GEN. D - TX 14-MAR $1,000

9-AUG $1,000STOTESBERY, BILL VP MARKETING WATSON, KIRK - CANDIDATE FOR ATTNY. GEN. D - TX 1-OCT $500

REPUBLICAN $1,250DEMOCRAT $2,500TOTAL $3,750

Hart InterCivic Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTLUMMIS, FRED BOARD OF DIRECTORS BUSH-CHENEY 2004 R 23-FEB $2,000

Sequoia Voting Systems Contributions 2001CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTBECKSTRAND, MARK VP NEY, ROBERT REP. R - OH 22-AUG $1,000SEQUOIA BROWN, WILLIE - CANDIDATE FOR STATE SENATE D - CA 08-NOV $3,000

REBUBLICAN $1,000DEMOCRAT $3,000TOTAL $4,000

Sequoia Voting Systems Contributions 2002CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTSEQUOIA CALIFORNIA DEMOCRATIC PARTY D 11-JAN $2,500

DAVIS, GRAY GOV. D - CA 07-MAR $2,000FIREBAUGH, MARCO - ASSEMBLY MEMBER D - CA 18-JUL $5,000SHELLEY, KEVIN SOS D - CA 15-MAR $2,000YES ON PROP. 41 - VOTING MODERNIZATION ACT 25-JAN $100,000DEMOCRATIC STATE CENTRAL COMMITTEE OF CA D 11-JAN $2,500SAN JOSE SILICON VALLEY CHAMBER OF COMMERCE 19-AUG $5,000

BECKSTRAND, MARK VP TAFT, BOB GOV. R - OH 28-MAY $2,500REPUBLICAN $2,500DEMOCRAT $14,000OTHER $105,000TOTAL $121,500

Sequoia Voting Systems Contributions 2003CONTRIBUTOR POSITION RECIPIENT DATE AMOUNTSEQUOIA DIAZ, MANNY - ASSEMBLY MEMBER D - CA 31-JAN $1,500

SOUTH BAY AFL-CIO LABOR COUNCIL ISSUES 03-OCT $5,000SANTA CLARA & SAN BENITO COUNTIES 31-JAN $1,000BUILDING CONSTRUCTION TRADES COUNCILSF LABOR COUNCIL & NEIGHBOR IND. EXPENDITURE 10-OCT $600

DEMOCRAT $1,500OTHER $6,600TOTAL $8,100

Political Activity and Voting MachineManufacturers

As concerns over the securityand accuracy of electronic voting sys-tems have grown, some manufactur-ers of voting systems have also had tograpple with concerns over their roleand influence in partisan politics.

Over the past year, there havebeen a variety of reports by thepress, individuals and independentorganizations into campaign contri-butions made by voting machinevendors and their executives. Therehave been suggestions that thesedonations are at best conflicts ofinterest and, at worst, signs thatvoting machine companies mightattempt or already have attemptedto “fix” elections in which theirproducts are used.1

Some see a direct link betweenDRE manufacturers and theRepublican Party. Norman J.Ornstein of the AmericanEnterprise Institute told TheWashington Post that for someDemocrats, the election of 2000created, "enormous unease and dis-trust in the democratic process.You've triggered not very latent sus-picions and paranoia amongDemocrats and liberals more thanin conservatives.”2

The now-infamous quote byWalden O’Dell, CEO of Ohio-basedDiebold, Inc. promising to “deliver”Ohio’s electoral votes to PresidentBush has become ubiquitous in presscoverage of the issue. Those whohave charged the 2000 election was“stolen” point to O’Dell andDiebold as proof that the same willhappen again in 2004, except this

time with newer technology. In response to these reports and

allegations, plus general skepticismabout e-voting systems, six electionsystem companies - AdvancedVoting Systems, Diebold ElectionSystems, Election Systems &Software, Hart InterCivic, SequoiaPacific Voting Systems, and Unilect– formed the Electronic TechnologyCouncil in December 2003, underthe umbrella of the InformationTechnology Association of America(ITAA) to advance the interests ofthese manufacturers.

Harris Miller, president of theITAA, stated he agrees that CEOsof voting machine companies mak-ing political contributions “couldcreate concerns that the process willbe distorted.”

However, Miller believes whenit comes to others who work forvoting machine companies, it’s adifferent story.

“Why should individuals giveup their constitutional rights to givemoney if they work for a votingmachine company? There is noth-ing intrinsically wrong with individ-uals giving money,” Harris said.

Any contribution from mem-bers of such an industry could betoo much, said Meredith McGehee,a campaign finance reform advocate.

McGehee, president of theAlliance for Better Campaigns, agroup that, like electionline.org,recieves funding from The PewCharitable Trusts, said the nature ofthe business performed by votingmachine companies make political




DIEBOLD SEQUOIA ES&S HART INTERCIVIC


$179,233

$105,950

$126,137

$4,000

$121,500

$8,100 $10,000

$85,650

$6,800$500

$4,250 $2,0000

$50,000

$100,000

$150,000

$200,000

2001 2002 2003 2001 2002 2003 2001 2002 2003 2001 2002 2003


Partisan Contributions by Company,Board Members and Executives

2001 - 2003



The once-overlooked election

industry has become the focus

of intense scrutiny in recent years

with the passage of the Help America

Vote Act (HAVA) and the promise of

nearly $4 billion in funds from

Washington to purchase new voting

machines, software and databases.

In the past two years, as con-

cerns over the security and reliability

of direct-recording electronic (DRE)

voting machines have increased, so

too has the public wariness over the

political activity of companies that

design, manufacture and maintain

them. Specifically, many press reports

and Web sites suggest a link between

DRE manufacturers and the

Republican Party, primarily owing to

the fundraising activity and state-

ments made by the CEO of the

largest election system company,

Diebold Inc., that he would help

“deliver Ohio’s electoral votes” to

President George W. Bush.

Electionline.org’s research found,

however, that there is no industry-

wide partisan trend to political con-

tributions among the largest election

system companies. While Diebold

and its executives gave more than

$400,000 to Republican candidates

and the party from 2001 to the pres-

ent, other companies, including

Election Systems & Software (ES&S)

and Sequoia Voting Systems gave a

slight edge to Democratic candidates

and party organizations.

Among other findings from 2001

to early 2004:

• Ohio-based Diebold Inc. con-

tributed $409,170 to Republicans


• Nebraska-based ES&S and execu-

tives gave $21,900 to Republicans


• Contributions from California-

based Sequoia Voting Systems and

executives totaled $3,500 to

Republicans and $18,500 to

Democrats.

• Texas-based Hart InterCivic

and executives donated $3,750

to Republicans and $2,500

to Democrats.

In addition, Sequoia and ES&S

contributed $150,000 to an effort to

pass Proposition 41, California’s

Voting Modernization Bond Act of

2002, a bill that provided nearly $200

million for the purchase of new vot-

ing machines to replace punch cards

in the state.

While some campaign finance

reformers say any political contribu-

tion from a company dealing with

something as important as elections

can raise questions about credibility,

an organization representing manu-

facturers agreed that while company

contributions could raise concerns,

executives and other employees do

not have to,“give up their constitu-

tional rights” because of the industry

in which they work. The influence

those contributions have on procure-

ment is questionable based on some

case studies.

Furthermore, despite employing

lobbyists in 10 states, the extent of

the “home-state advantage” gained by

election machine manufacturers in

the procurement process in their

own state is not altogether clear. It

has worked to the advantage of some

companies in procuring contracts for

voter registration databases, but

clearly not for all voting machine

manufacturers seeking to sell their

products in their home states.

Executive Summary



MethodologyInformation for “Election Reform Briefing #8: The Business ofElections,” came from a variety of publicly available sources. They aredetailed by area of interest below:Vendor Campaign Contributions* Campaign contribution information as of May 31, 2004 was gathered

from reports available on the following websites: Federal ElectionCommission, PolticalMoneyLine, the Institute on Money in StatePolitics, the Center for Responsive Politics and individual state websites.

Voting Machine Vendor Officers and Directors* The names of company board members, directors and executives

between the years 2001 and 2004 were gathered through phoneinquiries, emails, Lexis/Nexis, Dun & Bradstreet reports, HooversOnline, Forbes.com company profiles, Yahoo.com Finance searchengine, individual state corporation and business entity searches,Google News search and the websites of Diebold, Inc., ElectionSystems and Software, Hart InterCivic, Sequoia Pacific VotingEquipment and VoteHere.

Registered State and Federal Lobbyist Expenditures andCompensation* All lobbyist compensation and expenditure reporting includes only doc-

uments filed electronically and made available online through individualstate websites. Not all states require lobbyists to file reports electroni-cally, nor do they make the information available online. Federal lobby-ists’ compensation and expenditure reports are not available online.Principal and lobbyists names were gathered from states that providethe information online.

All interviewed sources are listed in the endnotes. Their opinions – andthe opinions expressed in secondary source material – do not reflect theviews of the nonpartisan, non-advocacy electionline.org or the ElectionReform Information Project. All questions concerning research and methods should be directed toSean Greene at [email protected] or Elizabeth Schneider [email protected].

Endnotes1 Diebold Inc. CEO Walden O’Dell’s Republican fundraising letter about“delivering votes” to Bush is cited repeatedly as a prime example of thisconflict of interest. Others have gone further and suggested vote-fixing inthe 2002 Senate election in Georgia (which has never been proven.) Agood summary of these allegations can be found here: Campos, Carlos.“Critics punch at touch-screen security,” Atlanta Journal Constitution,February 14, 2004. 2 Keating, Dan. “Groups Rally for Voting Receipts,” The Washington Post,July 14, 2004.3 http://www.fec.gov/pages/vendorslist.htm (Federal ElectionCommission list of established vendors of computerized vote tabulationsystems as of February 20, 2003.) 4 Diebold did not purchase Global Election Systems which becameDiebold Election Systems until January 2002. However, 2001 numbersare included because as early as June 2001 there were reports of Diebold’spending purchase of Global Election Systems. For more information, see“Diebold to buy Global Election Systems in stock swap,” Dallas BusinessJournal, June 21, 2001.5 Campaign contribution information as of May 31, 2004 for all data inthis report was gathered from reports available on the websites main-tained by the Federal Election Commission, PolticalMoneyLine, theInstitute on Money in State Politics, the Center for Responsive Politicsand individual state websites that provide campaign contribution infor-mation online. 6 Berr, Jonathan. “Diebold's Voting Machine Expansion Rattles Investors,States,” Bloomberg News, May 21, 2004.7 “Diebold stops top executive from making political contributions,” TheAssociated Press, June 6, 2004. 8 Verton, Dan. "Effort afoot to address e-voting at convention,"ComputerWorld, July 26, 2004.9 For more information, see the Web site for California Secretary ofState Kevin Shelley. www.ss.ca.gov/elections.

10 Because of a combination of funding delays and concerns about thesecurity and reliability of DRE voting systems, none of Ohio’s 88 coun-ties will switch to touch-screen voting systems in time for the 2004 elec-tion. For more information, see: McCarthy, John. “Ohio counties notrushing to replace voting machines,” The Associated Press as reported inThe Cleveland Plain Dealer, July 9, 2004. 11 Secretary Shelley also blocked the use of Sequoia DRE machines (andall other DREs in the state) in 2004 pending the adoption of securitymeasures and the inclusion of paper-ballot options for voters in the 10counties using electronic voting machines. Riverside Registrar MischelleTownsend dropped a lawsuit against Shelley and the state’s DRE direc-tives in mid-July. For more information, see: Martin, Hugo and Mehta,Seema, “2 counties, state reach deal on e-voting machines,” The LosAngeles Times, July 14, 2004. 12 All lobbyist compensation and expenditure reporting include only doc-uments filed electronically and made available online through individualstate websites. Not all states require lobbyists to file reports electronically,nor do they make the information available online. Federal lobbyist’scompensation and expenditure reports are not available online. Principaland lobbyists names were gathered from states that provide the informa-tion online. 13 Smith, Erika. “Diebold Bans Execs’ Political Gifts,” The Akron Beacon-Journal, June 8, 2004.14 Shane III, Leo. “Election machine firm blasted,” The News-Messenger,August 28, 2003. 15 2 United States Code § 441c, 11 C.F.R. § 115.1(d).16 Rule G-37 Municipal Securities Rulemaking Board.17 Rosenberg, Alec. “E-voting profits no pot of gold,” Tri-Valley Herald,June 14, 2004.18 Ibid. 19 “Second Quarter Earnings Up at Diebold,” The Assoccciated Press, July21, 2004.20 “The Primary System: History of Voting Technology,” PBS.org OnlineNews Hour, December 13, 2003. 21 Jones, Douglas W. “A Brief History of Voting,” Department ofComputer Sciences, University of Iowa, 2001. 22 Dugger, Ron. “Annals of Democracy: Counting Votes,” The NewYorker, November 7, 1988. 23 From phone interview with Roy Saltman, election technology consult-ant, June 4, 2004. 24 Remarks by Professor Stephen Ansolabehere, Massachusetts Instituteof Technology to the National Conference of State Legislatures ElectionReform Task Force, April 2001. Available here: http://www.ncsl.org/pro-grams/legman/elect/taskfc/MIT.htm.25 Ackerman, Elise. “E-voting regulators often join other side when leav-ing office,” Mercury News, June 15, 2004. 26 Sequoia Voting Systems Press Release, “Assistant Secretary of StateJoins Sequoia Voting Systems, the Oakland-Based Provider of TouchScreen Voting Systems,” August 22, 2002. 27 Schweers, Jeff. “Time short to certify ballot software,” The Las VegasSun, May 28, 1996.; also see: Schweers, Jeff. “County adds 536 votingmachines,” The Las Vegas Sun, December 17, 1997. 28 For more information, see “About Us” at http://www.unilect.com/.29 “Lobbyist made money from touch screen sales,” The Associated Press asprinted in The St. Petersburg Times, October 6, 2002.30 Internet sites tracking conspiracy theories (this info came fromConspiracyPlanet.com but other sources have the same information) arequick to point out the estimate made by one anti-paperless voting advo-cate who noted that the Urosevich brothers’ respective employers makethe machines and software that will collect about 80 percent of the votescast in the country. 31 Bolton, Alexander. “Hagel’s ethics filings pose disclosure issue,” TheHill, January 29, 2003. 32 “Statement of Avi Rubin of Relationship with VoteHere Inc.,” MediaAdvisory, Headlines @ Hopkins, August 17, 2003.33 ITAA Press Release: “Companies Form Election TechnologyCouncil,” December 9, 2003. 34 ITAA Statement: First Hearing of the U.S. Election AssistanceCommission, May 5, 2004.35 Mark, Roy. “E-voting group united on security concerns,”InternetNews.com, December 10, 2003.



36 “State Plan for the State of Georgia,” July 24, 2003, p. 4.37 Ibid, p. 5.38 Lemos, Robert and Festa, Paul. “Fight over e-voting leaves electionplans as casualties,” CNET News.com, May 20, 2004.39 Press Release, “Secretary of State Heller Announces Direct RecordingElectronic Voting Machine Choice,” December 10, 2003.40 “Nevada Clerks say New Voting Machines Needed Now,” TheAssociated Press as published in The Reno Gazette-Journal, Nov. 28, 2003.41 Zetter, Kim. “E-Vote Printers’ High Stakes Test,” Wired, May 27,2004.42 Howard, Tommy. “Possible Suit Against Election Group on Hold,”Georgetown Times, April 9, 2004.43 From telephone interview with Kevin Tyne, Arizona deputy Secretaryof State, June 8, 2004.44 Ibid.45 “State Plan to Implement the Help America Vote Act,” June 16, 2003,p. 26.46 McCarthy, John. “Electronic Voting on Hold,” The Associated Press,July 17, 2004.47 Selweski, Chad. “Many Communities Won't Have New VotingMachines,” The Macomb Daily, May 7, 2004.

48 “Agreement Between the County of Santa Clara and Sequoia VotingSystems, Inc. for a Direct Recording Electronic Voting System,” April11, 2003.49 Hoffman, Ian. “Solano County Cans Diebold System,” ANGNewspapers, May 26, 2004.50 “Commonwealth of Pennsylvania State Plan,” July 31, 2003, p. 9. 51 electionline.org survey response, October 2003.52 electionline.org survey response, December 2003.53 Carr Smyth, Julie. “To Win Contract, Diebold Offers the State aCarrot,” The Plain Dealer, August 10, 2003.54 Seymour, LaChelle. “Company Disputes County's Voting MachinePreference,” The Advocate, November 23, 2003.55 Mallett, Kent. “County Chooses Voting Machines,” The Advocate,January 13, 2004.56 Ibid. “Voting Machine Contract at Risk,” May 13, 2004.57 DuPlessis, Jim. “Contract Protest Rejected,” The State, May 14, 2004.58 Indiana Secretary of State Press Release. “Indiana’s Quest InformationSystems Selected to Create Statewide Voter Registration System,” May19, 2004. 59 Saber Consulting Press Release. “Saber Consulting to Build VoterRegistration System,” August 8, 2003.

localities to make voting easier,more accurate and more accessible.The industry, after all, is not likeany other. It is concerned with themost important exercise of democ-racy.

The machines, much likeHAVA itself, were intended torestore voter confidence that wasshaken after 2000. In the last year,however, the voting machine indus-try as a whole has faced questionsthat seem to have done the opposite.

Embarrassing internal docu-ments have found their way into themedia. Campaign donations and lob-bying expenditures – not unusual forbusinesses of any kind but new tothe world of election reform – aresuddenly a hot topic for these com-panies. Security reports by expertsboth inside and outside governmenthave challenged DRE security andaccuracy. Nationally, a call for voter-verified paper audit trail to serve as abackup to electronic results, is find-ing receptive ears in state capitalsfrom Sacramento to Columbus. Insome cases, this new scrutiny has hadan impact on the companies’ bottom

In this eighth edition in elec-tionline.org’s series of ElectionReform Briefings, we take an in-depth look at the “business of elec-tions” – the market for electiongoods and services that is both thecause and effect of the HelpAmerica Vote Act (HAVA) of 2002.

Election companies, once rela-tively anonymous in the pre-2000days when election administrationwas not a front-page issue, havefound themselves at the center ofdebate.

In this environment, votingmachine companies continue to beput on the defensive, forced to justi-fy not just their products but theirway of doing business.

Many industries and workers’unions that have dealings with thefederal government are politicallyactive. For election machine manu-facturers to do the same is certainlynot unique.

What is unique, however, is thedelicate role that voting machinesplay in our democracy – particular-ly the new machines that werespecifically purchased by states and

line, belying the old adage that“there is no such thing as bad pub-licity,” perhaps leading some compa-nies to rethink their investment inthe election business.

This Briefing is intended to adddepth and breadth to the currentfocus on election companies byoffering information in several areas.

It provides a comprehensiveanalysis of the campaign financesand lobbying expenditures of sever-al of the largest companies. election-line.org aims to elevate the level ofdebate both by making it clear thatpolitical activity is commonthroughout the “business of democ-racy” and by placing each compa-ny’s individual activity in the overallcontext of political activity.

This briefing also details thehistory of the election businessfrom the late 19th century to thepresent, looks at the process bywhich state and local election offi-cials procure the companies’goods and services and examinesthe role of “home-state advan-tage” in procurement.



Election companies, once relativelyanonymous in the pre-2000 days whenelection administration was not a front-page issue, have found themselves at thecenter of debate.

BriefingIn the aftermath of the 2000 election, voting machines became the

focus of efforts to improve the nation’s elections. With the passage of

the $3.86 billion Help America Vote Act (HAVA), counties and cities

across the country started to consider replacing older voting machines

with newer technologies.

Nearly four years later, the results are in. Mindful of Florida’s punch-card

follies in 2000, many state and local officials acted, and as a result, mil-

lions of voters will cast electronic ballots in 2004, many for the first time.

The switch from antiquated and maligned systems to state-of-the-

art direct-recording electronic (DRE) systems has been increasingly

controversial and divisive. As many now realize, paperless

DREs eliminate the ballot “middle man” that characterizes

punch cards, optical scanner ballots and old-fashioned,

hand-counted paper ballots. The DREs themselves dis-

play the ballot, store the vote, and generate the tally—

all within their sleek cases.

With high-tech machines now handling more parts of

the election process, the attention of many political

observers, activists and voters has turned to the typically-

ignored voting industry — the companies that make, market

and maintain voting machines nationwide.

Introduction . . . . . . . . . . . . . 1

Executive Summary . . . . . . . .3

Political Activity and VotingMachine Manufacturers . . . .4

The Industry . . . . . . . . . . . . . 8

Voting System Procurement 12

Tables . . . . . . . . . . . . . . . . . .16

Methodology/Endnotes . . .22

The Business of Elections

electionline.org

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lectionline.org, administered by the Election Reform Information Project, is the

nation’s only nonpartisan, non-advocacy website providing up-to-the-minute news

and analysis on election reform.

After the November 2000 election brought the shortcomings of the American

electoral system to the public’s attention, The Pew Charitable Trusts made a three-

year grant to the University of Richmond to establish a clearinghouse for election

reform information.

Serving everyone with an interest in the issue–policymakers, officials, journalists, schol-

ars and concerned citizens–electionline.org provides a centralized source of data and

information in the face of decentralized reform efforts.

electionline.org hosts a forum for learning about, discussing and analyzing election

reform issues.The Election Reform Information Project also commissions and conducts

research on questions of interest to the election reform community and sponsors con-

ferences where policymakers, journalists and other interested parties can gather to share

ideas, successes and failures.

electionline.org

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tel: 202-338-9860

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