Florida Attorney General Investigating ES&S-Premier Merger

Source: Miami Herald

Voting-Machine Firm Merger Investigated

Florida's attorney general is investigating a voting-machine company merger that has voting-rights groups worried that the move will concentrate too much power over democracy in one private company.

Miami Herald/Times Tallahassee Bureau, Dec. 16, 2009

TALLAHASSEE -- Florida Attorney General Bill McCollum is conducting an anti-trust investigation of a voting-machine company merger that would create a near-monopoly over the levers of democracy in Florida and much of the United

McCollum's office has issued at least six subpoenas covering every major voting-machine company as part of a civil investigation of Election Systems & Software's $5 million acquisition of Diebold Inc.'s elections division -- a merger that would give a private company too much power over the machines used to castvotes, voting-rights groups say.

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"Our office engaged in this issue because anti-competitive behavior can seriously harm consumers," McCollum said in a written statement. "Competitive behavior encourages the best products be available to consumers, including technology, particularly in a market as sensitive as the voting systems market."

Under the state's 1980 anti-trust law, McCollum could persuade a court to levy fines against ES&S or prevent the company from operating in Florida. By next year, the company is expected to be the exclusive provider of voting machines and services in 65 of the 67 counties in Florida, the nation's most important swing state.
That means, under the acquisition announced Sept. 2, ES&S will provide election services to 92 percent of Florida's 11.2 million voters.

More broadly, ES&S's purchase of the competitor company gives it control of the voting machines in nearly 70 percent of the nation's precincts, according to a federal lawsuit in Delaware filed by a rival company, Hart Intercivic. The U.S. Department of Justice is conducting its own inquiry.

McCollum's investigation came to light Wednesday after eight voting rights groups sent him a letter urging him to open an inquiry -- unaware that his office had already opened its investigation Sept. 10. The first subpoena was sent out Oct. 2.
"I'm glad to hear there's an investigation. We need action now," sad Dan McCrea, president of the Florida Voters Foundation, one of the groups that sent the letter.

"Florida counties are negotiating their contracts now to prepare for the 2010 elections," McCrea said. "They can suffer the potential damages for dealing with a monopoly now. So intervention needs to happen now."

McCollum's spokeswoman, Sandi Copes, said the office could not comment on a pending investigation.

The subpoenas show that McCollum is searching for every type of document that the voting machine companies have, from "pencil jottings" to memos to canceled checks and even electronic images of websites.

Spokesmen and lawyers for ES&S, Diebold and the other voting companies could not be reached or would not comment on the case.

Documents show that the companies that received subpoenas are: ES&S, Diebold Inc., Hart-Intercivic, Sequoia Voting Systems, Scytl and Dominion Voting Systems Corporation.

In a Sept. 23 Herald/Times story about the initial concerns of the merger, ES&S offered assurances that the acquisition "will result in better products and services for all customers and voters alike.''

But Howard Simon, executive director of the American Civil Liberties Union of Florida, said monopolies are bad for voters and consumers.

"In a monopolistic situation," he said, "price goes up, quality goes down and there's almost no innovation."

Simon said a looming issue the Legislature will face next year: How to provide better voting equipment for disabled people who can only use touch-screen voting machines.

"We can't have separate but equal," said Simon, who signed Wednesday's letter along with McCrea's group and the Broward Election Reform Coalition, Common Cause, Florida Consumer Action Network, Florida Council of the Blind, Sarasota Alliance for Fair Elections and Voter Action.

In the Wednesday letter, the advocates suggested that McCollum's office cooperate with other states and the federal government, join the Delaware lawsuit filed by Hart-Intercivic and collect and submit data to the U.S. Senate Committee on Rules and Administration, which is investigating as well.

Marc Caputo can be reached at mcaputo[at]MiamiHerald[dot]com

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•Voting machine monopoly seen in Florida

Miami Herald, 12.16.09:

"The nation's largest election company is purchasing a rival in a major deal that will make it the sole provider of voting machines in 65 of Florida's 67 counties and much of the nation.
Election Systems & Software's $5 million acquisition of Diebold Inc.'s voting company has prompted fears that the private company will become a monopoly that's bad for democracy.
Last week, another voting company, Hart InterCivic, asked a federal court to declare the transaction an illegal monopoly. A U.S. senator also asked the Department of Justice's antitrust division for a review."

•Guard against voting-machine monopoly

Miami Herald Op Ed, 12.17.09:

"Florida election officials must protect against a voting-machine monopoly. The nation's largest election company is purchasing a rival in a major deal that will make it the sole provider of voting machines in 65 of Florida's 67 counties and much of the nation."