Diebold Sells US Voting Machine Unit

NORTH CANTON, Ohio — ATM maker Diebold Inc. has sold its much-criticized U.S. voting-machine business to its bigger competitor, Election Systems & Software Inc. of Omaha, Neb.

Diebold, based in North Canton, announced the sale of its Allen, Texas-based subsidiary Premier Election Solutions Inc. on Thursday and said it will get $5 million plus payments representing 70 percent of collections of the unit's accounts receivable as of Aug. 31.

Diebold said it would disclose the additional payments at a later date.

Diebold expects to recognize a pretax loss on the deal in the range of $45 million to $55 million.

Last year Premier generated 2.8 percent of Diebold's revenue. Diebold faced repeated criticism of the reliability and security of its touch-screen voting machines and began looking for a buyer for Premier more than two years ago.

In 2007, Diebold distanced itself from the election unit, renaming it Premier, allowing it to operate more independently and giving it a separate board of directors.

Its touch-screen voting machines used in elections across the country often drew criticism that the technology could be manipulated. The company has insisted touch-screen voting is reliable and an improvement over punch-card ballots that resulted in the disputed recount in Florida during the 2000 presidential election.

The sale reflects Diebold's decision three years ago to focus on key markets, including ATMs and security systems, according to spokesman Mike Jacobsen. The company is determined to move forward and not reflect on past election-system problems, he said.

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Diebold's Brazilian subsidiary, which makes voting machines for Brazil's national elections board, is unaffected by the Premier sale.

Premier has about 180 employees in the United States and Canada. Premier operates in 33 states and ES&S operates election services in 39 states and overseas.

Aldo Tesi, ES&S president and CEO, said the company was determined to fulfill its responsibilities in the high-profile voting-machine market.

"This acquisition is an opportunity to continue fulfilling our company's core mission of maintaining voter confidence, and enhancing the voting experience," he said in a statement.

Candice Hoke, an election law professor at Cleveland State University, said the sale raises questions about the consolidation of election services. "It's a massive consolidation of voting-system vendors," she said.

The increased size and influence of ES&S could make it harder for smaller, innovative companies to enter the market, she said. "The market power (of ES&S) will be so significant," she said.

At the same time, Hoke said, ES&S's growth could allow it to spend more on research to develop better voting machines.

Diebold shares were up 44 cents to $30.47 in Thursday afternoon trading.

Comments

[ccpostman]

I'm surprised the GOP or Fox News did not pony up the money for it.

[rtb61]

It is meant to be a government of the people, by the people and, for the people. Involve people in the whole process, including vote counting and verification and, hold the elections on a Saturday so more people can more readily be involved in the process.

[Lahonda]

Voting machine software code must be written with all code being "Open Source". Every line of code must be reveiwable online. Otherwise, the system involved cannot be trusted.

[pmagellan]

Yes, and

the hardware/software architecture should be fully disclosed; and

a paper record/receipt has to be issuer per voter.

Then we can trust voting machines and processes. Simple.

[protagonia]

Why bother unless one is afraid of being busted?

[NoSillyName]

Bring back PAPER BALLOTS.

[ccpostman]

On rice paper.

[zukervati]

With these feckers realizing that they have a snowball's chance in he// of getting another George Bush or Rethuglican majority in the legislature, it's better to sell of their fraudulent business now rather than wait for their personal miracle of Rethuglican Majority.

[yemaya]

the ones that turned dem votes into republican ones in Ohio?

[Kathryn Maver]

Those darned machines didn't get you enough Republican votes last time around, huh Diebold? No wonder you're selling. Too bad. So sad.

[afgail]

Being able to see how votes are counted and provide a verifiable paper trail is essential to democracy. Any company who will not disclose to the public exactly how votes are counted should NEVER be allowed to tabulate election results. If they say it is proprietary information the answer is, "Adios, we''ll find a company that will show the public exactly how the votes are counted."

[bg66astoria]

Of course, they contribute to the GOP - the company's owned by a former GOP senator. No surprise! But the FEC and the State ECs should be investigating & maybe siccing their AGs on it.

[Gablib]

Right on bg66astoria! I agree.

[econobiker]

Who needs crooked voting machines when you can execute a “man-in-the-middle” exploit using servers hosting/forwarding election results - the same servers hosting the “off-government” email system for a sitting president (gwb43.com) at the time.

And then the server owner later convienently dies alone in a private plane crash prior to being deposed about it? (Mike Connell anyone?)

http://www.huffingtonpost.com/2008/12/25/the-intriguing-death-of-t_n_153518.html

http://en.wikipedia.org/wiki/Michael_Connell

[Gablib]

Scary! Almost disheartens one to the idea of voting at all..Of course, I will still vote but I really am left wondering each time I do, if my vote was manipulated? (sigh)

[Skyhawk]

New and improved vote stealing software is being developed.

[texastrixie]

Electronic voting machines should be outlawed. So what if we don't know the outcome of elections until the day after we vote? Give me a paper ballot where you have to fill in bubbles with a pencil anytime. Mess it up? Just turn it back in and get another. Pay every police officer off duty to take control of the ballots and transport them to a central counting area. The company is getting rid of this portion of its business because it means nothing but lawsuits.

Or, we could ask Visa or Mastercard to run our elections (for a fee per voter). They would probably be smart enough to have a contest where some voter won a million dollars for voting. If they can handle sales for millions of online retailers, surely they can handle voting.

[philko]

Electronic voting machines are note inherently less secure than ballot boxes or mechanical polling machines. All of these methods are vulnerable to fraud. A ballot box is by far easier to stuff than an electronic machine.

The two big drawbacks of electronic machines is their lack of a paper trail that could be used to verify their accuracy and the opportunity for widespread fraud (stuffing a ballot box is easily done at one polling place, but nearly impossible to do over a wide geographic area).

But both of these drawbacks can be overcome if the voting machine vendor wants to (or is forced to).

Consider this option: Each electronic machine *must* spit out a receipt that can be read by both the voter and a scantron machine. The voter votes, gets his/her receipt, verifies it, and places it in a ballot box. If the results from that precinct end up in question, the ballot box is opened and the receipts are fed into a machine MADE BY A DIFFERENT VENDOR and used to check the accuracy of the electronic machines. To make things even more secure, you could even add the mandatory verification of 2% of the precincts and the mandatory retention of the receipts for 2+ years. All the feds would have to do is specify a nationwide "standard" format for the receipt.

This ain't an unfixable problem. It's just one that can't be fixed at a bargain basement price.

[mystic]

Isn't it easier to have a corrupt Supreme Court? What great role models!! Why bother with machines?
Fraud is the American way, and that's what attracted immigrants from all over the world where they couldn't it make it in their own countries, so they came here in their zillions and now everyone is defrauding everyone else. Great country, where "elections" are illusory but the stupid sheeple, who still refuse to believe in evolution, are so gullible.
And look where we are, in the gutter. Not a surprise.

[noaxe397]

Another voting machine company (I think it was Sequoia) was bought by a Venezualian group and when the system was used in an election won by Hugo Chavez it was conservative in that country who were screaming voter fraud.

[plooger]

One might view this as good news, but the near monopoly of one company, ES&S, is anything but.