Voting-machine firm denies Chavez ties
Maker of electronic voting machines says it has voluntarily submitted to a federal review and denied any links to the leftist government of Venezuelan President Hugo Chavez.

By Reuters
Published: October 29, 2006, 10:55 PM PST

A leading U.S. maker of electronic voting machines and its parent company said on Sunday they had voluntarily submitted to a federal review and denied any links to the leftist government of Venezuelan President Hugo Chavez.

The New York Times reported that the Committee on Foreign Investments in the United States was conducting a formal inquiry into Smartmatic Corp. and its U.S. subsidiary Sequoia Voting Systems.

"No foreign government or entity--including Venezuela--has ever held an ownership stake in Smartmatic, and we have voluntarily filed with CFIUS to put to rest the baseless but persistent rumors about our ownership," Smartmatic Chief Executive Officer Antonio Mugica said in a statement from the company's U.S. headquarters in Boca Raton, Fla.

CFIUS, a multiagency panel headed by the U.S. Treasury Department, approves or rejects foreign takeovers of American companies. Typically, approvals of foreign acquisitions are granted within 30 days unless national security concerns are raised.

"As a company, we sought out a CFIUS review because we are confident it will clear the air so we can focus on what we do best," Mugica said.

Smartmatic and Venezuelan government officials have strongly denied that Chavez--a longtime foe of the Bush administration--has any role in the firm, The New York Times said.

A Treasury Department spokeswoman declined to comment in the Times story on whether CFIUS was conducting a formal probe, but did confirm the panel had contacted the company.

Venezuela hired Smartmatic to replace its election machines ahead of the August 2004 recall referendum against Chavez, the newspaper said. The recall effort failed.

In March 2005, Smartmatic used the $120 million profit from its Venezuela deals to acquire Oakland, Calif.-based Sequoia which has installed electronic voting equipment in 17 U.S. states and the District of Columbia, it said.

Before that, a Venezuelan government financing agency invested more than $200,000 in a technology company that had some of the same owners of Smartmatic, which joined Smartmatic as a minor partner in the bid.

In return, the Venezuelan agency took a 28 percent stake in the smaller company and a seat on its board of directors, the Times said. An unnamed, senior Venezuelan official who had previously advised Chavez on election technology occupied the board seat.