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2006-10-29 Caribbean-Latin America
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U.S. Investigates Voting Machines Venezuela Ties
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The federal government is investigating the takeover last year of a leading American manufacturer of electronic voting systems by a small software company that has been linked to the leftist Venezuelan government of President Hugo Chávez.
Wow, I'm betting this will prove to be Karl Rover's cleverest caper yet, after the November results come in.
The inquiry is focusing on the Venezuelan owners of the software company, the Smartmatic Corporation, and is trying to determine whether the government in Caracas has any control or influence over the firms operations, government officials and others familiar with the investigation said.
The inquiry on the eve of the midterm elections is being conducted by the Committee on Foreign Investment in the United States, or Cfius, the same panel of 12 government agencies that reviewed the abortive attempt by a company in Dubai to take over operations at six American ports earlier this year.
The committees formal inquiry into Smartmatic and its subsidiary, Sequoia Voting Systems of Oakland, Calif., was first reported Saturday in The Miami Herald.
Officials of both Smartmatic and the Venezuelan government strongly denied yesterday that President Chávezs administration, which has been bitterly at odds with Washington, has any role in Smartmatic.
The government of Venezuela doesnt have anything to do with the company aside from contracting it for our electoral process, the Venezuelan ambassador in Washington, Bernardo Alvarez, said last night.
And then his lips could not be found
Smartmatic was a little-known firm with no experience in voting technology before it was chosen by the Venezuelan authorities to replace the countrys elections machinery ahead of a contentious referendum that confirmed Mr. Chávez as president in August 2004.
Seven months before that voting contract was awarded, a Venezuelan government financing agency invested more than $200,000 into a smaller technology company, owned by some of the same people as Smartmatic, that joined with Smartmatic as a minor partner in the bid.
In return, the government agency was given a 28 percent stake in the smaller company and a seat on its board, which was occupied by a senior government official who had previously advised Mr. Chávez on elections technology. But Venezuelan officials later insisted that the money was merely a small-business loan and that it was repaid before the referendum.
With a windfall of some $120 million from its first three contracts with Venezuela, Smartmatic then bought the much larger and more established Sequoia Voting Systems, which now has voting equipment installed in 17 states and the District of Columbia. 
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Posted by Nimble Spemble 2006-10-29 08:50||
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