Smartmatic

By 2004 several young software professionals in Caracas, Venezuela were called in by the embattled socialist regime of Hugo Chavez to help him and his Bolivarian Revolution, backed by Castro's Cuba, to survive a referendum. The previous Christian Democratic regime of Rafael Caldera had passed a law requiring automated voting and the US voting companies ES&S and the Spanish Indra Systems had established a presence in the country. ES&S was close to the Bush Republican Party.

In response to a bid process for the 2004 Venezuela recall election by Venezuela's CNE election authority, a new consortium known as SBC Consortium was formed and won the bid to run the referendum counting process. The SBC Consortium comprised Smartmatic (51%), Bitza software (2%), and state telecommunications organization CANTV (47%). The Chavez-appointed R&D Software head of Bitza was Omar Montilla Castillo, a Chavez Government official. Smartmatic had been founded a couple years before by two Venezuelan engineers living in Florida, Antonio Mugica and Alfredo Anzola. The 2004 referendum was their first venture into voting machines. The pro-Chavez Floridians won the bid and were awarded $128 million, with Smartmatic retrofitting gambling machines to be used for the process. Apparently it wasn't such a big step from rigged gambling machines to rigged voting machines for the clever Venezuelan entrepreneurs.

Smartmatic allegedly has 30 anonymous investors and silent partners who are mainly upper-class Venezuelans, including defense minister Jose Vicente Rangel and Chávez mentor Luis Miquelina, and others, according to a July 20, 2006, State Department diplomatic cable that was leaked to Wikileaks.

The company publicly acknowledged that Venezuela's government manipulated the results of the country's 2017 Constitutional Assembly election. Smartmatic said the turnout figures were overstated by at least 1 million votes, Reuters reported.

"We know, without any doubt, that the turnout of the recent election for a National Constituent Assembly was manipulated," Smartmatic CEO Antonio Mugica said at a news briefing in London in 2017. "We estimate the difference between the actual participation and the one announced by authorities is at least 1 million votes."

Chávez's successor, Nicolás Maduro, who is allied with the Chinese Communist Party and Russia, was indicted by the Trump administration in March on charges of "narco-terrorism." Cuba's Fidel Castro also mourned the death of Chávez, who called him a "father, a comrade," according to a 2005 interview with Cuban Communist Party newspaper Granma.

'Manipulated' Results

In Venezuela, Ana Mercedes Díaz was appointed deputy director general of the country's National Electoral Council in 1991. Then, in 2003 — just before the referendum — she was appointed director general of political parties of the council. (The electoral council is one of the five branches of Venezuela's government responsible for overseeing its elections and referendums.)

Díaz was fired in 2004 after she published information on electoral fraud occurring in Venezuela's referendum. She said that what's happening in the United States mirrors the issues with Smartmatic in Venezuela.

"It was admitted by Smartmatic that the results can be manipulated," Díaz told The Epoch Times. "Smartmatic later came out of Venezuela, but it's been proven that this type of fraud goes wherever they go. What's happening in the United States is exactly the same thing."

"The program can make those changes from Trump to Biden," she said, adding that "this change is almost impossible to detect."

After her firing, someone who still worked for the council sent Díaz a copy of the contract the government signed with Smartmatic. She saw that it was negotiated in only three days and thought it strange the government chose a company with no previous history or experience in elections, despite that being one of the criteria of the council's selection.

Díaz later emigrated to the United States. Since Venezuela's 2004 referendum until his death in 2013, Chávez won all of the country's elections through a "fraudulent system," she said.

Díaz noted other parallels and similarities between issues in this year's election and what she saw in Venezuela. Many American poll watchers and challengers have submitted sworn affidavits saying they couldn't see the actual ballots being counted, due to obstruction. She said in Venezuela, "observers were also not allowed to see the votes."

"In Venezuela, the opposition was winning, the light went off, and when it came back, the results were flipped. I was following the U.S. election and there came a moment where information stopped ... nobody knew what had happened," she said.

"There was nothing for a few hours — it's exactly, exactly, exactly how Smartmatic operated in Venezuela."

According to Díaz, Venezuela is exporting its voting machines to other Latin and Asian countries so they can influence elections across the globe. The U.S. government has repeatedly sanctioned officials of Maduro's regime who were involved in public corruption or undermining democracy.

Smartmatic "is thought to be backing out of Venezuelan electoral events, focusing now on other parts of the world, including the United States via its subsidiary, Sequoia," according to the leaked 2006 State Department cable.

"Smartmatic is a riddle. The company came out of nowhere to snatch a multimillion-dollar contract in an electoral process that ultimately reaffirmed Chavez's mandate and all-but destroyed his political opposition," the cable continues. "The perspective we have here, after several discussions ... is that the company is de facto Venezuelan and operated by Venezuelans."

A former CIA official who's an expert in Latin American politics and counterterrorism said his team found through an investigation that Chávez started to focus on voting machines to ensure victory as early as 2003, when more than 20 percent of Venezuelans signed a recall referendum to remove him as president.

"[Chávez] started talking to a company called Indra, a Spanish company which [ran] elections" in Venezuela at that time, he said.

After deciding that Indra's voting machines weren't "flexible" enough, Chávez contacted Smartmatic, according to the official. Smartmatic says that Chavez didn't contact the company but that the process went through the National Election Council; Smartmatic later won the bid over Indra, and the five-member Venezuelan electoral council, dominated by Chávez supporters, awarded a $91 million contract to Smartmatic for the referendum.

"At midnight on Election Day, the machine stopped counting," the official said, noting that Chávez was losing at that point. "By 3 a.m., Chavez had won by 10 percent."

Smartmatic spokesperson Samira Saba said that results aren't available in real time.

In 2005, Smartmatic bought Sequoia Voting Systems, a much larger and more established company based in Oakland, California. At the time, Sequoia had installed voting equipment in 17 U.S. states and Washington.

Concerns that Smartmatic had ties to Chávez were so widespread at the time that the U.S. government began investigating the takeover of the company a year after the purchase, The New York Times reported at the time. The probe was conducted by the Committee of Foreign Investment in the United States (CFIUS), which reviews deals by foreign acquirers for potential national security risks.

Among the points for concern was Smartmatic's convoluted business structure.

"Smartmatic has claimed to be of U.S. origin, but its true owners — probably elite Venezuelans of several political strains — remain hidden behind a web of holding companies in the Netherlands and Barbados," according to the State Department cable.

In 2006, Treasury Secretary John Snow had inquired whether the Venezuelan government could use Sequoia to manipulate U.S. elections. Then-Rep. Carolyn Maloney (D-N.Y.), another high-profile politician who raised similar concerns, was the first to voice the need for an investigation of the Sequoia deal.

Before it sold Sequoia, Smartmatic had refused to undergo such a review by the U.S. government, claiming all the allegations were simply rumors.

"It seems [Smartmatic] could not overcome the cloud of doubt surrounding this deal — had they been able to, we would not be talking about a sale of Sequoia today," Maloney said in a 2006 statement. "As I said in May, it seems that a CFIUS review was in fact the proper course."

Smartmatic attempted to respond to those concerns, but in 2007, ended up selling Sequoia to what the company described in a statement as "a group of private U.S. investors comprised by Sequoia's current executive management team, led by Sequoia President & CEO Jack Blaine and the company's chief financial officer, Peter McManemy."

Such private equity firms, as well as Dominion, were named in a scathing 2019 release by Sens. Elizabeth Warren (D-Mass.), Amy Klobuchar (D-Minn.), and Ron Wyden (D-Ore.), and Rep. Mark Pocan (D-Wis.), who had raised concerns about the poor condition and vulnerabilities of voting machines and other election equipment, along with a lack of transparency, in letters to these firms.

A year after Smartmatic sold Sequoia, the name of Sequoia's new owner was revealed through a 2008 lawsuit: "SVS Holdings." Court arguments uncovered that Smartmatic was still the owner of Sequoia's intellectual property.