Diebold: the controversial manufacturer of voting and ATM machines, whose name conjures up the demons of Ohio’s 2004 presidential election irregularities, is now finally under indictment for a “worldwide pattern of criminal conduct.” Federal prosecutors filed charges against Diebold, Inc. on Tuesday, October 22, 2013 alleging that the North Canton, Ohio-based security and manufacturing company bribed government officials and falsified documents to obtain business in China, Indonesia and Russia.
Diebold has agreed to pay $50 million to settle the two criminal counts against it.
This is not the first time Diebold’s been accused of bribery. In 2005, the Free Press exposed that Matt Damschroder, Republican chair of the Franklin County of Elections in 2004, reported that a key Diebold operative told Damschroder he made a $50,000 contribution to then-Ohio Secretary of State J. Kenneth Blackwell's “political interests” while Blackwell was evaluating Diebold's bids for state purchasing contracts. Damschroder admitted to personally accepting a $10,000 check from former Diebold contractor Pasquale “Patsy” Gallina made out to the Franklin County Republican Party. That contribution was made while Damschroder was involved in evaluating Diebold bids for county contracts. Damschroder was suspended for a month without pay for the incident. Despite the scandal, he was later appointed as Ohio Secretary of State Jon Husted's Director of Elections.
The ghosts of 2004 election irregularities
Diebold was at the center of Ohio’s 2004 election debacle, much of this captured in an article by Free Press Senior Editor Harvey Wasserman and this author, entitled, “Diebold’s Political Machine.” Walden "Wally" O'Dell, chairman of the board and chief executive of Diebold, was a long-time funder of Republican candidates. In September 2003, he held a packed $1,000-per-head GOP fundraiser at his 10,800-square-foot mansion Cotswold Manor in Upper Arlington, Ohio. He was feted as a guest at then-President George W. Bush's Texas ranch, joining a cadre of “Pioneers and Rangers” who pledged to raise more than $100,000 for the Bush reelection campaign.
Most memorably, in 2003 O'Dell penned a letter pledging his commitment “to helping Ohio deliver its electoral votes to the President.” O'Dell defended his actions, telling the Cleveland Plain Dealer “I'm not doing anything wrong or complicated.” But he also promised to lower his political profile and “try to be more sensitive.” But the Diebold boss' partisan cards were squarely on the table.
Prior to the 2004 election, Blackwell tried to award a $100 million unbid contract to Diebold for electronic voting machines. A storm of public outrage and a series of lawsuits forced him to cancel the deal. But a substantial percentage of Ohio's 2004 votes were counted by Diebold software and Diebold Opti-scan machines which frequently malfunctioned in the Democratic stronghold of Toledo. It was revealed in 2006 that Blackwell owned Diebold stock.
Diebold's GEMS election software was used in about half of Ohio counties in the 2004 election. Because of Blackwell's effort, 41 counties also used Diebold machines in Ohio's highly dubious 2005 election.
Also in the Ohio 2004 election, a whistleblower leaked documents revealing that Diebold had allegedly used illegal, uncertified hardware and software during California election.
The ghosts in the Diebold election machines go bump in the 2002 election
Wherever Diebold and the other most well-known voting machine company Election Systems & Software (ES&S) go, irregularities and historic Republican upsets follow. Alastair Thompson, writing for scoop.co of New Zealand, explored whether or not the 2002 U.S. mid-term elections were “fixed by electronic voting machines supplied by Republican-affiliated companies.” The Scoop investigation concluded that: “The state where the biggest upset occurred, Georgia, is also the state that ran its election with the most electronic voting machines.” Those machines were supplied by Diebold. ES&S and Diebold would later merge and now count about 80 percent of all U.S. votes.
Wired News reported that “. . . a former worker in Diebold’s Georgia warehouse says the company installed patches on its machine before the state’s 2002 gubernatorial election that were never certified by independent testing authorities or cleared with Georgia election officials.” Questions were raised in Texas when three Republican candidates in Comal County each received exactly the same number of votes – 18,181 – on ES&S machines.
Following the 2003 California election, an audit of the company revealed that Diebold Election Systems voting machines installed uncertified software in all 17 counties using its equipment. In 2012, Ohio Secretary of State Jon Husted approved a secret last-minute contract allowing ES&S to install untested, “experimental” software patches on central voting tabulators in 39 Ohio counties. Congressional testimony exposed that last-minute patches were installed in several Ohio counties including Miami and Clermont in the 2004 election.
Johns Hopkins researchers at the Information Security Institute issued a report declaring that Diebold’s electronic voting software contained “stunning flaws.” The researchers concluded that vote totals could be altered at the voting machines and by remote access. Diebold vigorously refuted the Johns Hopkins report, claiming the researchers came to “a multitude of false conclusions.”
Perhaps to settle the issue, apparently an insider leaked documents from the Diebold Election Systems website and posted internal documents from the company to Bev Harris' Black Box Voting website. Diebold went to court to stop, according to court records, the “wholesale reproduction” of some 13,000 pages of company material.
The Associated Press reported in November 2003 that: “Computer programmers, ISPs and students at [at] least 20 universities, including the University of California, Berkeley and the Massachusetts Institute of Technology received cease and desist letters” from Diebold. A group of Swarthmore College students launched an “electronic civil disobedience” campaign to keep the hacked documents permanently posted on the Internet.
Diebold computer goblin causes the 2000 election to be called for Bush
The rush to embrace computerized voting, of course, began with Florida’s 2000 presidential election. But, in fact, one of the Sunshine State's election-day disasters was the direct result of a malfunctioning computerized voting system; a system built by Diebold. The massive screw-up in Volusia County was all but lost in the furor over hanging chads and butterfly ballots in South Florida. In part that is because county election officials avoided a total disaster by quickly conducting a hand recount of the more than 184,000 paper ballots used to feed the computerized system. But the huge computer miscount led several networks to incorrectly call the race for Bush. The first to call it was Fox News where Bush’s first cousin, John Ellis, was in charge of election night coverage.
The first signs that the Diebold-made system in Volusia County was malfunctioning came early on election night, when the central ballot-counting computer showed a Socialist Party candidate receiving more than 9,000 votes and Vice President Al Gore getting minus 19,000. Another 4,000 votes poured into the plus column for Bush that didn't belong there. Taken together, the massive swing seemed to indicate that Bush, not Gore, had won Florida and thus the White House. Election officials restarted the machine, and expressed confidence in the eventual results, which showed Gore beating Bush by 97,063 votes to 82,214. After the recount, Gore picked up 250 votes, while Bush picked up 154. But the erroneous numbers had already been sent to the media.
Harris has posted a series of internal Diebold memos relating to the Volusia County miscount on her website, blackboxvoting.com. One memo from Lana Hires of Global Election Systems, now part of Diebold, complains, “I need some answers! Our department is being audited by the County. I have been waiting for someone to give me an explanation as to why Precinct 216 gave Al Gore a minus 16,022 [votes] when it was uploaded.” Another, from Talbot Ireland, Senior VP of Research and Development for Diebold, refers to key “replacement” votes in Volusia County as "unauthorized."
Harris has also posted a post-mortem by CBS detailing how the network managed to call Volusia County for Bush early in the morning. The report states: “Had it not been for these [computer] errors, the CBS News call for Bush at 2:17:52 AM would not have been made.” As Harris notes, the 20,000-vote error shifted the momentum of the news reporting and nearly led Gore to concede. It also gave rise to the incorrect chant that, “Bush won twice.”
What's particularly troubling, Harris says, is that the errors were caught only because an alert poll monitor noticed Gore's vote count going down through the evening, which of course is impossible. Diebold blamed the bizarre swing on a "faulty memory chip," which Harris claims is simply not credible. The whole episode, she contends, could easily have been consciously programmed by someone with a partisan agenda. Such claims might seem far-fetched, were it not for the fact that a cadre of computer scientists showed a year ago that the software running Diebold's new machines can be hacked with relative ease.
In 2006, Princeton computer scientists revealed that a computer virus could be easily implanted on a Diebold AccuVote Touch Screen voting system allowing the vote to be flipped. Professor Edward Felten noted that a single individual, “with just one or two minutes of unsupervised access to either the voting machine or the memory card” could rig the system. Carnegie Mellon’s Michael Shamos called the discovery “the most severe security flaw ever discovered in a voting system.”
Diebold sued over faulty equipment, settles by giving away more faulty equipment
Cuyahoga County (Cleveland, Ohio) election officials accused Diebold of breach of contract, negligence and fraud following the 2008 Ohio primary. Then-Ohio Secretary of State Jennifer Brunner sued Diebold for breach of contract, warranty violations and misrepresentations by Diebold representatives involving 47 Ohio counties.
In a bizarre settlement in 2010, more than half of Ohio's county boards of elections received free and discounted voting machines and software from Premier Election Solutions (formally Diebold). This is a result of the August 2008 lawsuit against Diebold filed by Brunner. In the counterclaim filed by Brunner, she alleged that Diebold voting equipment "dropped votes in at least 11 counties." The failure to count votes occurred when Diebold memory cards were uploaded to computer servers.
Diebold in 2010 reached a settlement with the Securities and Exchange Commission (SEC) after the U.S. government sued them for $25 million in a fraud case. Diebold admitted that they had overstated the value of their election division by 300% in a stock manipulation scheme.
U.S. Attorney Steven Dettelbach noted that “Companies that pay bribes to public officials, whether those officials are in Cleveland, in Ohio, or overseas, violate the law.” Amen. Why would a free people allow a company with Diebold’s track record to have anything to do with our elections at all. The Diebold indictment underscores a much greater problem in the U.S. election system. As long as the United States allows corrupt, partisan private corporations to secretly count its votes, democracy remains in danger.
Harvey Wasserman contributed to this article.