SENATE ETHICS COMMITTEE DIRECTOR RESIGNS
Bev Harris, “Black Box Voting,” 425-228-7131 firstname.lastname@example.org /
Dan Spillane, Senior Test Engineer for voting machines: 206-860-2858
Chuck Hagel: 202-224-4224 -- Senate Ethics Committee: 202-224-2981
Charlie Matulka, ran for office against Chuck Hagel: 402-228-1009
Rebecca Mercuri, expert on computerized voting machines 215/327-7105
The Hill Article: http://www.thehill.com
“Hagel’s ethics filings pose disclosure
issue” -- “The Hill”
On October, 10, 2002 Bev Harris, author of the upcoming “Black Box Voting:
Ballot-Tampering” in the 21st Century, revealed that Republican Senator
Chuck Hagel has ties to the largest voting machine company, Election Systems
& Software (ES&S). She reported that he was an owner, Chairman and CEO
of Election Systems & Software (called American Information Systems until
name change filed in 1997). ES&S was the ONLY company whose machines
counted Hagel’s votes when he ran for election in 1996 and 2002. The Hill, a
Washington D.C. newspaper that covers the U.S. national political scene,
confirmed her findings today and uncovered more details.
Hagel’s campaign finance director, Michael McCarthy, now admits that Senator
Hagel still owns a beneficial interest in the ES&S parent company, the
McCarthy Group. ES&S counts approximately 60 percent of all votes cast in
the United States. According to the Omaha World-Herald which is also a
beneficial owner of ES&S, Hagel was CEO of American Information Systems,
now called ES&S, from November 1993 through June 2, 1994. He was Chairman
from July 1992 until March 15 1995. He was required to disclose these
positions on his FEC Personal Disclosure statements, but he did not.
Hagel still owns up to $5 million in the ES&S parent company, McCarthy
Group. But Hagel’s office, when interviewed by Channel 8 News in Lincoln,
Nebraska for the evening news on October 22, 2002, said he had sold his shares
before he was elected. His office issued a fact sheet claiming that he had
made full disclosure.
Last week, Hagel’s campaign finance director, Michael McCarthy (currently an
owner and a director of ES&S) admitted to Alexander Bolton of The
Hill that Hagel is still an owner of ES&S parent company, the McCarthy
Group, and said that Hagel also had owned shares in AIS Investors Inc., a
group of investors in ES&S itself. Yet Hagel did not disclose owning or
selling shares in AIS Investors Inc. on his FEC documents, a required
disclosure, nor did he disclose that ES&S is an underlying asset of
McCarthy Group, in which he lists an investment of up to $5 million in 1996,
1997, 1998, 1999, 2000, and 2001.
SENATE ETHICS COMMITTEE CHIEF COUNSEL / DIRECTOR RESIGNS
Harris spoke with Victor Baird of the Senate Ethics Committee office January
9, and asked him who is responsible for ensuring that FEC disclosures are
complete. She asked whether anyone had followed up to see why Senator Hagel
did not list his positions with the voting machine company, and she asked
about his characterization of the McCarthy Group as an “excepted investment
fund” and his failure to disclose that it owned ES&S. Baird was silent,
and then said “If you want to look into this, you’ll need to come in and
get hold of the documents.”
Unfortunately, according to Alexander Bolton, a reporter at The Hill, when he
went to the Senate Public Documents Room to retrieve originals of Hagel’s
1995 and 1996 documents he was told they were destroyed. “They said anything
over five years old is destroyed by law, and they pulled out the law,” says
Bolton. However, when he spoke with Hagel’s staff, they said had obtained
the documents from Senate Ethics Committee files. Copies of the documents are
available at OpenSecrets.org/pfds -- a repository for FEC disclosures.
In 1997, Baird asked Hagel to clarify the nature of his investment in McCarthy
Group on his 1996 FEC statement. Hagel had written “none” next to “type
of investment” for McCarthy Group. In response to Baird’s letter, Hagel
filed an amendment characterizing the McCarthy Group as an “Excepted
Investment Fund,” a designation for widely held, publicly available mutual
funds. He never disclosed his indirect ownership of ES&S at all, but
apparently no one questioned this omission, nor his curious characterization
of the McCarthy Group, a privately held company that is not listed on any
Baird told Bolton that the McCarthy Group did not seem to qualify as an
“excepted investment fund.” He reportedly met with Hagel’s staff on
Friday, January 25 and Monday, January 27, 2002. Then, also on Monday, he
stepped down. On Monday afternoon Baird’s replacement, Robert Walker,
provided a new, looser interpretation of “publicly available” (though
experts disagree, saying that a privately held company like the McCarthy Group
cannot be called “publicly available” in order to avoid disclosing
Hagel’s challenger in the Nebraska Senate race, Charlie Matulka, wrote to
Baird in October 2002 to request an investigation into Hagel’s ownership in
and nondisclosure of ES&S. Baird replied, “Your complaint lacks
merit and no further action is appropriate with respect to the matter, which
is hereby dismissed,” in a letter dated November 18, 2002.
SENATE CANDIDATE QUESTIONS HAGEL’S CONFLICT OF INTEREST
Charlie Matulka, the candidate who ran against Chuck Hagel in Nebraska’s
U.S. Senate race in November 2002, also wrote to the Nebraska Secretary of
State and to state elections officials in October 2002. He pointed out that
his opponent had ties to ES&S, and asked them to look into the conflict of
interest, but received no answer.
Several Nebraska ES&S machines malfunctioned on Election Day, and Matulka
filed a request for a hand count on December 10, 2002. It was denied, because
Nebraska has a new law that prohibits election workers from looking at the
paper ballots, even in a recount. The only machines permitted to count votes
in Nebraska are ES&S.
CAN VOTING MACHINES BE TAMPERED WITH THROUGH ACCESS TO PROGRAMMERS?
The Washington Post characterized Hagel’s election in 1996 as the biggest
upset of the election season. At the time, voters did not know that he owned
and had held key positions with the company that counted his votes. But is it
improper for a candidate to have ties with voting machine companies?
Harris examines the issue of tampering security in the upcoming “Black Box
Voting” book. One of her sources, Dan Spillane, a former Senior Test
Engineer for a voting machine company, believes that the computerized voting
machine industry is riddled with system integrity flaws.
“The problems are systemic,” Spillane says, and he contends that the
certification process itself cannot be trusted. Despite industry
characterizations that the code is checked line by line, this does not appear
to be the case. Spillane points to frequent, critical errors that occur in
actual elections and identifies omissions in the testing procedures
themselves. His own experience as a voting machine test engineer led him to
address his concerns about integrity flaws with the owner of the voting
machine company, who then suggested that he resign. He did not, but shortly
before a General Accounting Office audit, Spillane was fired, and so was his
supervisor, who had also expressed concerns about system integrity.
Election Technology Labs quit certifying voting machines in 1992. Its founder,
Arnold B. Urken, says that the manufacturers, specifically ES&S (then
AIS), refused to allow the detailed examination of code needed to ensure
system integrity. Wyle Labs refused to test voting machine software after
1996; testing then went to Nichols Research, and then passed to PSINet, and
then to Metamor, and most recently to Ciber.
But even if certification becomes adequate, nothing guarantees that machines
used in actual elections use the same programming code that was certified.
Machines with adjusted code can be loaded onto delivery trucks with inside
involvement of only ONE person. To make matters worse, “program patches”
and substitutions are made in vote-counting programs without examination of
the new codes, and manufacturers often e-mail technicians uncertified program
“updates” which they install on machines immediately before and on
Both Sequoia touch screen machines and Diebold Accuvote machines appear to
have “back door” mechanisms which may allow reprogramming after votes have
been cast. Diebold’s Accuvote machines were developed by a company founded
by Bob Urosevich, a CEO of Diebold Election Systems and Global Election
Systems, which Diebold acquired. Together with his brother Todd, he also
founded ES&S, where Todd Urosevich still works. ES&S and Sequoia use
identical software and hardware in their optical scan machines. All three
companies’ machines have miscounted recent elections, sometimes electing the
wrong candidates in races that were not particularly close.
For more information, call 425-228-7131.