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Chavez Uses Electronic Voting Company to Expand Power Base

Richard Brand has a fascinating article on how Smartmatic, a company with close ties to Venezuelan strongman Hugo Chavez, quietly purchased Sequoia Voting Systems, a U.S. e-voting company. Smartmatic was an integral part of the Chavez strategy to survive the 2004 recall aimed at legally removing him as President. Prior to the recall effort, Venezuela had a relatively modern and up-to-date voting system which Chavez ordered replaced by Smartmatic, a company that had no previous experience with electronic voting machines.

A Wall Street Journal editorial a month after the August 2004 recall vote points to a study by MIT professors Ricardo Hausmann and Roberto Rigobon suggesting Chavez stole the August '04 election with the aid of the Smartmatic voting machines.

Mr. Hausmann told us that he and Mr. Rigoban also "found very clear trails of fraud in the statistical record" and a probability of less than 1% that the anomalies observed could be pure chance. To put it another way, they think the chance is 99% that there was electoral fraud.

Brand elaborates on Smartmatic's checkered past in his column:

Smartmatic has a brief but controversial history. The company was started in Caracas during the late 1990s by engineers Antonio Mugica and Alfredo Anzola. They worked out of downtown Caracas providing small-scale technology services to Latin American banks. Despite having no election experience, the tiny company rocketed from obscurity in 2004 after it was awarded a $100 million contract by the Chávez-dominated National Electoral Council to replace Venezuela's electronic voting machines for the recall vote.

When the council announced the deal, it disingenuously described Smartmatic as a Florida company, though Smartmatic's main operations were in Caracas and the firm had incorporated only a small office in Boca Raton. It then emerged that Smartmatic's ''partner'' in the deal, Bizta Corp., also directed by Anzola and Mugica, was partly owned by the Venezuelan government through a series of intermediary shell corporations. Venezuela initially denied its investment but eventually sold its stake.

When the vote finally came, exit polls by New York's Penn, Schoen & Berland Associates showed Chávez had been defeated 59 to 41 percent; however, when official tallies were announced, the numbers flipped to 58-42 in favor of Chávez. Venezuela's electoral council briefly posted machine-by-machine tallies on the Internet but removed them as mathematicians from MIT, Harvard and other universities began questioning suspicious patterns in the results.

Flush with cash from its Venezuelan adventures, Smartmatic International incorporated in Delaware last year and purchased Sequoia, announcing the deal as a merger between two U.S. companies.

Sequoia's machines were used in the most recent election here in Chicago. A March 24th Chicago Tribune article detailing problems with the new voting system refers to the company as "California-based Sequoia." Nowhere in the article is it mentioned that the company is owned by Smartmatic. Brand details the Sequoia/Smartmatic ownership chain further:

Smartmatic International is owned by a Netherlands corporation, which is in turn owned by a Curacao corporation, which is in turn held by a number of Curacao trusts controlled by proxy holders who represent unnamed investors, almost certainly among them Venezuelans Mugica and Anzola and possibly others.

One would think with all of the connections to the Chavez regime the Smartmartic purchase of Sequoia would have raised some red flags inside the U.S. government. The truth is with all of the foreign policy focus on Iraq and the War on Terror, Chavez has been able to fly beneath the radar on many strategic issues. Sixty-dollar plus oil has given Chavez the opportunity to play sugar-daddy to many of the poor countries in the region, with the goal to make him the power broker in the region, not the United States. The U.S. should be under no illusion: the Chavez regime is a growing and dangerous menace.

Chavez is hoping to install Smartmatic voting machines in other Latin American countries, and while there are enough safeguards here in the U.S. to make it extremely unlikely Chavez would be able to influence U.S. elections through the Sequoia/Smartmatic machines, the same can not be said of other Latin American countries where Smartmatic may soon be employed - and where the Sequoia purchase and U.S. contracts will be used to lend credibility to the Smartmatic machines.

This is a story that deserves far greater press attention.