Canadian Company Buys Allen-based Diebold/Premier Election Solutions

Updated June 2, 2010 @ 11:58 P.M.
The company that markets the old Diebold/Premier electronic voting machines, used by Collin County voters, finally found someone to buy its failed Allen, Tx based Diebold/Premier Election Solutions business unit. Canadian-based Dominion Voting Systems, Inc has acquired the primary assets of Premier Election Solutions, including all intellectual property, software, firmware and hardware for Premier’s current and legacy optical scan, central scan, and touch screen voting systems, and all versions of the GEMS election management system. Dominion also has the right to hire former Premier employees.

Diebold's failed election division (renamed Premier Election Solutions in 2007) was purchased from Diebold for a pittance by Election Systems & Software, Inc. (ES&S) in September 2009 following a long three search for a buyer.

The Department of Justice's Anti-trust division later determined that the purchase of Diebold's Allen, TX based "Premier Election Solutions," by ES&S, resulted in a voting systems monopoly.

Collin County voters have been voting on Diebold Election Solutions DRE AccuVote touch screen voting systems, like the machine pictured left, since the March 4, 2004 primary election.

In 2008 Collin County purchased 410 of a newer version of the AccuVote voting booth machines (pictured right) to use for early voting. The newer AccuVote machine was used for the first time in Collin Co. during early voting for the November 2008 general election. Collin County continues to use the now antiquated "2004" AccuVote voting machines for Election Day voting. Collin Co. currently has a total inventory of about 1400 AccuVote voting booth machines.

On March 8, 2010 the U. S. Department of Justice, along with nine state attorneys general, filed an antitrust lawsuit in U. S. District Court in Washington, D.C. alleging that ES&S’ 2009 acquisition of Premier harmed competition. In settlement of that lawsuit ES&S agreed to look for someone willing to buy the assets of Premier.

In May 2010 Canadian-based Dominion Voting Systems, Inc agreed to acquire the assets of Premier Election Solutions from ES&S. From the Press Release announcing the acquisition:

Dominion Voting Systems, Inc. Acquires Premier
Election Solutions Assets From ES&S

Transaction Approved by the U. S. Department of Justice, Will Significantly Increase Competition in the United States Voting Systems Industry

Dominion’s Engineering and Customer Service Expertise Will Support Premier’s
Voting Products Throughout the U.S.

JAMESTOWN, New York .... Dominion Voting Systems, Inc. today announced that it has acquired from Premier Election Solutions, Inc. (Premier) a wholly owned subsidiary of Election Systems and Software (ES&S), the primary assets of Premier, including all intellectual property, software, firmware and hardware for Premier’s current and legacy optical scan, central scan, and touch screen voting systems, and all versions of the GEMS election management system.

As part of the transaction, Dominion also acquired an irrevocable, perpetual license for the AutoMark voting terminals used by voters with disabilities, a similar license for the VoteRemote absentee vote-by-mail processing solution, and rights to spare parts, supplies and other resources necessary to support and service these installed systems. In addition, Dominion will acquire a percentage of existing Premier inventory.

Under terms of the agreement, which was approved by the U. S. Department of Justice (DOJ) and nine state attorneys general, Dominion has secured the right to hire current and former Premier employees and to enter into agreements with Premier dealers experienced in deploying and supporting these systems. In addition, the transaction requires that current Premier customers be provided with the opportunity to assign their existing contracts to Dominion without penalty. As part of the transaction, Dominion granted license rights back to Premier, subject to certain restrictions. The transaction also provides limitations on the ability of ES&S to continue to sell the Premier equipment going forward. Premier voting systems are currently in use in over 1,400 jurisdictions in 33 states and serve nearly 28 million American voters.

Included in the acquisition are Premier’s legacy products as well as Premier’s new ASSURE 1.2 solution suite which includes hardware, software and firmware with enhanced functionality and strengthened security and auditability features.

Updated March 8, 2010 @ 11:45 A.M.
The Department of Justice's Anti-trust division has determined that the purchase of Diebold's Allen, TX based "Premier Election Solutions", by Election Systems & Software, Inc. (ES&S), has resulted in a voting machine monopoly.

A settlement has been struck, pending approval by a federal judge, between the DOJ, nine states, and ES&S requiring that the private company find a DoJ-approved purchaser of the Diebold/Premier assets. The proposed settlement, signed by the DoJ, ES&S, and representatives of state attorneys general in Arizona, Colorado, Florida, Maine, Maryland, Massachusetts, New Mexico, Tennessee, and Washington has been posted here [PDF]. Announcement of the DoJ-ordered unwinding of the merger and proposed settlement is also posted here.

Updated March 4, 2010 @ 4:49 A.M.
This story is again in the news with a just released AP news article. The AP story does not report much new news, but since it puts the story in circulation again, we'll pull our old post back up to the top of the list. The AP story includes this quote:

"If you end up with 70 percent of the voting machines and the people rely on them, and if entry into the market is difficult or impossible, it would certainly seem to be a legitimate target for antitrust enforcement," said Charles "Rick" Rule, a longtime Washington attorney who ran the Justice Department's antitrust division from 1986-89 during the merger-friendly Reagan administration.

Updated December 20, 2009 @ 10:22 A.M.
In September 2009 privately owned Omaha, Neb. based Election Systems & Software Inc., the largest voting machine company in the country, bought its biggest competitor, Diebold's Allen, TX based "Premier Election Solutions," without advance public notification.

The New York Post reports today that the U.S. Dept. of Justice and 14 states are actively investigating the already-completed merger of the two biggest makers of voting machines in advance of possible anti-trust legal action to unwind the merger as soon as next month.

The Miami Herald reports that Florida's AG office launched an investigation into the acquisition for possible violations of Florida's anti-trust statutes.

The U.S. Dept. of Justice joins Florida and 13 other states in similar investigations to investigate the merger that put privately held ES&S in control of the voting machines in nearly 70 percent of the nation's election precincts. (Separate from Justice's review, competing voting machine firm Hart InterCivic Inc. has sued ES&S, alleging that the company holds an unfair anti-competitive monopoly on the U.S. voting machine market.)

Given ES&S is a privately held company it issues no financial reports and it was not required by law to give advanced notice to the Securities and Exchange Commission (SEC) or the Dept. of Justice about its acquisition of the Premier Election Solutions unit of Diebold. However, the government does have jurisdiction to take action in such transactions, if they create unfair anti-competitive monopolistic markets.

In a letter sent to Attorney General Eric Holder in September 2009, just after ES&S announced its acquisition of Premere, U.S. Senator Charles E. Schumer (D-NY), the Chairman of the Senate Rules and Administration Committee and a senior member of the Senate Judiciary Committee, expressed concerns over the deal and requested that the Justice Department’s Antitrust Division launch an investigation. In the September 2009 letter Schumer writes:

“If this acquisition proceeds, one company could control over three-quarters of the U.S. market for voting systems. Given other factors, including high barriers to entering the market, I am deeply concerned that local governments and taxpayers will not be getting a fair deal because too much market power will be held in too few hands.”

“It is in the public interest to maintain a range of choices in voting systems” -- noting that increased consolidation in the election-machine market could make elections more susceptible to fraud.

Originally Posted on September 3, 2009 @ 9:49 A.M.
After a three year search Diebold has at long last found a buyer for its Allen, TX based "Premier Election Solutions" business unit. The company announced Thursday that Premier Election Solutions, Diebold’s beleaguered voting machine division, had been acquired by Election Systems and Software (ES&S).

Collin County voters have been voting on Diebold Election Solutions DRE AccuVote touch screen voting systems, like the machine pictured left, since the March 4, 2004 primary election.

In 2008 Collin County purchased 410 of a newer version of the AccuVote voting booth machines (pictured right) to use for early voting. The newer AccuVote machine was used for the first time in Collin Co. during early voting for the November 2008 general election. Collin County continues to use the older "2004" AccuVote voting machines for Election Day voting. Collin Co. currently has a total inventory of about 1400 AccuVote voting booth machines.

In 2006, Diebold began attempts to distance itself from its election solutions division because controversies swirling around its computerized voting system line of business tarnished its mainline banking ATM business, plus, the added profits Diebold envisioned when it purchased the elections systems business never fully materialized. Diebold endured numerous lawsuits in addition to its PR problems over its Election Systems product.

Wired Magazine: Diebold, an Ohio-based maker of ATMs and security systems, purchased the elections business from Global Election Systems for $31 million in January 2002, just as Congress was passing the Help America Vote Act, which allocated billions to states to purchase new voting machines.

Instead of reaping the flow of federal HAVA funds the new Diebold Elections Systems division immediately ran headlong into controversy when Diebold Inc. CEO Walden O’Dell, a fundraiser for former President George Bush, wrote in a letter to Republican supporters in 2003 stating that the company was “committed to helping Ohio deliver its electoral votes to the president” in 2004.

[Diebold's AccuVote computers were widely used throughout Ohio and O’Dell's letter suggested to some that Diebold might install software on the AccuVote machines "rigged" to throw the Ohio vote to Bush.]

The company then became a target of additional bad "PR" after it inadvertently put its AccuVote computer source code on a public internet access FTP computer. This gave computer scientists an opportunity to examine the AccuVote software code. The computer scientists who studied the software code said they discovered numerous security problems with the voting system [that might allow someone to hack and change votes recorded on the voting machines].

Criticism of Diebold Elections Systems' voting equipment remained constant as the voting system experienced numerous problems in election districts around the country, and reports surfaced that company officials had applied untested and uncertified software updates to voting computers. [Did E-Vote Firm Patch Election?]

[Atlanta Progressive News' Matthew Cardinale filed a report reviewing the history and concerns about software patches illegally installed on Georgia's Diebold touch-screen voting systems.]

Wired Magazine: The most recent problem with the company’s system occurred in the 2008 presidential election in Humboldt County, California, when Diebold’s tabulation software randomly deleted nearly 200 votes. An examination of the system revealed that its audit logs failed to record significant events, such as someone deleting votes from the system; it also contained a delete button that allowed anyone with access to the system to erase the audit logs.

Diebold began looking for a buyer for the troubled touch-screen and optical scan voting, and electronic voter registration business in early 2006. Following a year-long failed attempt to find anyone willing to buy the e-voting business, Diebold spun it off as a wholly owned subsidiary business, renamed the subsidiary "Premier Election Solutions" and gave the business unit its own separate management team and board of directors in August 2007.

Diebold continued to actively search for someone to buy for its election system business unit until Election Systems & Software, another company in the election systems industry, finally aggre Diebold has at long last found a buyer and has sold its controversial U.S. election systems business to competitor Election Systems & Software, another company in the election systems industry. The sale closed Wednesday September 2, 2009 and consists primarily of Diebold’s Allen, Texas-based subsidiary, Premier Election Solutions.

Diebold reportedly agreed to sell the business for $5 million in cash, plus payments representing 70 percent of any cash collected on outstanding accounts that were receivable as of Aug. 31. Diebold expects to recognize a pre-tax loss in the range of $45 million to $55 million as a result of the transaction. The pre-tax loss includes the assets and liabilities of the business, certain retained legal liabilities, and other transaction costs.

Read more at:

• BradBlog: Diebold Admits Audit Logs in ALL Versions of Their Software Fail to Record Ballot Deletions
  
• Wired Magazine: Diebold Admits Systemic Audit Log Failure; State Vows Inquiry
• California Secretary of State's report (.pdf) on the audit log problem
• Diebold May Face Criminal Charges

Bill White's Call To Audit The Texas Enterprise Fund

The White campaign has distributed the following email:

Support my call for an independent audit of the Texas Enterprise Fund, so we can have accountability for how Rick Perry is spending public funds. Visit AuditTEF.com Today >>

Rick Perry is using taxpayer dollars from the Texas Enterprise Fund to subsidize companies he selects. He's even drained payroll tax dollars from small businesses and then handed the money to larger competitors.

Texas taxpayers deserve to know whether we have gotten our money's worth from each and every dollar handed out by Rick Perry.

Support the call for an independent audit of the Texas Enterprise Fund -- sign my petition today.

Perry has handed out taxpayer money with questionable results. Some examples:

• A $35 million subsidy for biotech firm Lexicon Genetics, a company whose investors have ties to Perry's political campaigns. Perry said the subsidy would increase employment, but after the firm received the subsidy, they laid off employees.

• A $20 million subsidy for failed sub-prime lender Countrywide Financial, a key player in the global financial meltdown.

Texas taxpayers deserve independent, audited answers to important questions. What was the process for awarding subsidies? Were subsidies necessary for their intended purposes? Did companies live up to their promises? Were lobbyists paid to influence decisions about where the money would go? Did subsidized firms compete with other Texas businesses?

Learn more and support my call for an independent audit of the Texas Enterprise Fund, so we can account for how Rick Perry is spending public funds.

Texans deserve a governor who will put our interests ahead of special interests, a governor who will squeeze the value out of every tax dollar.

Pol. Adv. Bill White Campaign

70,000 Barrels Of Oil Gushing Into Gulf Every Day

'Angry' Obama Talks About Gulf Disaster... SPILL IS 10X WORSE THAN PREVIOUSLY BELIEVED.. 70,000 Barrels Gushing Every Day.. Note: In little noticed comments to McClatchy Newspapers, Ira Leifer, University of California researcher and member of the Obama Administration's Flow Rate Technical Group, said on Monday June 7, 2010 that even BP itself estimated the worst-case flow of an oil leak in the Gulf could reach 100,000 barrels of oil a day. "In the data I've seen, there's nothing inconsistent with BP's worst case scenario," Leifer was quoted as saying. Equivalent Of Exxon Valdez Every Four Days.. Oil spill could go on for years, experts say BP Has 'No Certainty' Of Disaster's Scale.. BP CEO Tony Hayward says: the ongoing gulf spill is "relatively tiny" Mississippi Gov. Haley Barbour (R) downplays the spill to the Associated Press Offshore Platform Sinks Off Coast Of Venezuela

PBS Morning Edition Listen to "Gulf Spill Could Be Much Worse Than Believed" BP has said repeatedly that there is no reliable way to measure the oil spill in the Gulf of Mexico by looking at the oil gushing out of the pipe. But scientists say there are actually many proven techniques for doing just that. Steven Wereley, an associate professor of mechanical engineering at Purdue University, analyzed videotape of the seafloor gusher using a technique called particle image velocimetry. A computer program simply tracks particles and calculates how fast they are moving. Wereley put the BP video of the gusher into his computer. He made a few simple calculations and came up with an astonishing value for the rate of the oil spill: 70,000 barrels a day — much higher than the official estimate of 5,000 barrels a day. The method is accurate to a degree of plus or minus 20 percent. mp3

The press, for the most part, has been reporting that 5,000 barrels of oil has been spilling into the gulf every day. Until today they have ignored reports from growing numbers of scientists and experts that the flow may be at a rate of at least 24,000 barrels a day.

The press even failed to widely report that on Tuesday, May 4, British Petroleum executives told the Energy and Commerce Committee of the US Congress’ House of Representatives that up to 60,000 barrels of oil per day may be flowing from the well into the Gulf of Mexico.

Analysis of seafloor video, that BP had withheld until two days ago, indicates that approximately 70,000 barrels could be gushing out every day, NPR reports. That figure is at least 10 times the U.S. Coast Guard's original estimate of the flow, and "the equivalent of one Exxon Valdez tanker every four days."

Federal officials are carefully tracking the trajectory of the oil that's made it to the water's surface and, increasingly, on shore. They even put out a daily map.

But there's never been an oil spill this big and this deep before. Nor have authorities ever used chemical dispersant so widely.

As a result, scientists are finding that a lot, if not most, of the oil is lurking below the surface rather than on it, in a gigantic underwater plume the size and trajectory of which remain largely a mystery.

Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.

“There’s a shocking amount of oil in the deep water, relative to what you see in the surface water,” said Samantha Joye, a researcher at the University of Georgia who is involved in one of the first scientific missions to gather details about what is happening in the gulf. “There’s a tremendous amount of oil in multiple layers, three or four or five layers deep in the water column.”

The plumes are depleting the oxygen dissolved in the gulf, worrying scientists, who fear that the oxygen level could eventually fall so low as to kill off much of the sea life near the plumes.

Where is this gigantic underwater plume of oil heading? Oceanographers believe the Gulf Oil Spill Could Devastate U.S. Eastern Seaboard To Canada.

Al Gore has said: Starting 40 years ago, when America's domestic oil production peaked, our dependence on foreign oil has steadily grown.

We are now draining our economy of several hundred billion dollars a year in order to purchase foreign oil in a global market dominated by the huge reserves owned by sovereign states in the Persian Gulf. This enormous and increasing transfer of wealth contributes heavily to our trade and current-account deficits, and enriches regimes in the most unstable region of the world, helping to finance both terrorism and Iran’s relentless effort to build a nuclear arsenal...

Here at home, the illusion that we can meaningfully reduce our dependence on foreign oil by taking extraordinary risks to develop deep reserves in the Outer Continental Shelf is illuminated by the illustration below. The addition to oil company profits may be significant, but the benefits to our national security are trivial.

The small yellow wedge on the top of the graph is the amount of oil available from Continental Shelf oil wells.


Update May 18, 2010 @ 4:55pm
Under pressure from congress BP released two new videos of the leaking riser from their Mississippi Canyon Block 252 well showing the leak after activation of the riser insertion tool. BP claims the insertion tool is siphoning 1,000 barrels of the 70,000 barrels per day flowing from the broken riser pipe.

The first video of the insertion in the end of the broken riser:


The second video (click full screen bottom right of the video frame) the bent section of the riser pipe juxg above the blowout preventer. As was reported to me earlier, it looks like it is definitely getting worse. At about 2:30 into the video, is a closeup -- scary stuff:

30% Of Americans Are Unsure If Or Believe Environmentalists Blew Up the Deepwater Horizon Drilling Rig

Ten percent of Americans believe environmentalists intentionally sabotaged the oil rig Deepwater Horizon off the Gulf Coast according to a poll released Tuesday by Public Policy Polling. I'm still hearing some of my conservative friends say liberal environmentalists plotted with Obama's government to blow up the Deepwater Horizon oil drilling platform in the Gulf of Mexico to advance their radical environmentalist anti-drilling political agenda!

Conservative radio host Rush Limbaugh floated the idea on his nationally syndicated talk show. "Think Progress reported on Limbaugh's conspiracy that is intended to shift blame from Big Oil to liberals in general and Obama in particular:

As the scale of the disaster caused by the explosion at an oil rig off the coast of Louisiana became more apparent last week, right-wing radio talker Rush Limbaugh unleashed a conspiracy theory suggesting that someone intentionally blew up the rig in order to “head off more oil drilling” ... "So, since they’re sending SWAT teams down there, folks, since they’re sending SWAT teams to inspect the other rigs, what better way to head off more oil drilling, nuclear plants, than by blowing up a rig? I’m just noting the timing here," said Rush Limbaugh on his radio program

Picking up on Limbaugh’s and oil spill truther's liberal conspiracy theory on fringe websites the Fox News conservative megaphone is also pushing the conspiracy theory that hardcore liberal environmentalist plotted with Obama's government to blow up the rig to advance their environmentalist anti-drilling political agenda. On Fox and Friends, former Bush Press Secretary Dana Perino said she was “not trying to introduce a conspiracy theory, but was this deliberate,” wondered Perino.

Public Policy Polling director Tom Jensen noted that if "undecideds" are included in the polling results, the number of Americans who are unsure about or believe the environmental sabotage theory rises to more than thirty percent." Just 9% of voters say they think environmentalists caused the spill while 22% are unsure and 69% don't believe they had anything to do with it," Jensen writes.

What really caused the blowout? An account given by two workers on the drilling rig and corroborated to some extent by Transocean, owner of the Deepwater drilling platform claims that BP, owner of the well, made key decisions to cut costs by short cutting proper procedures.

The final short cut was to reverse the order of cementing steps used to seal the well. After, cementing the casing, filling in the area between the pipe and the walls of the well, it is standard procedure to pour wet cement down the inside of the drill pipe, which then sinks thousands of feet down through the drilling mud before the cement hardens into a plug. Then the standard procedure is to wait for the cement plug to harden for a period of six hours before the drilling mud is removed. The account given by the two rig workers says that the drilling mud was removed before the cement was poured down the riser pipe.

Weighted drilling mud fills the pipe to hold back the oil and gas formation pressure while the well is being drilled. Properly weighted drilling mud prevents a blowout during drilling. As the heavy drilling mud was displaced by lighter sea water, without the cement plug in place, the reduced pressure inside the well riser pipe allowed the formation pressure to blowout of the pipe.

According to account, BP asked for and receive permission from the federal Minerals Management Service to displace the mud before the final plugging operation had begun. [WSJ Online]

Why didn't the blowout preventer work after the blowout occured?The blowout preventer had a dead battery in its control pod, leaks in its hydraulic system that provides emergency power to the "variable bore ram" device that was supposed to cut and seal the pipe to stop the flow of oil, a ram cutting tool that wasn’t strong enough to shear through pipe joints that made up 10 percent of the drill pipe, all of which really made no difference because the blowout preventer had been modified so that one of its "variable bore ram" drivers could be used for routine testing and was no longer designed to activate in an emergency. That’s the story told in the WashPost coverage on the devastating opening statement in a hearing of the House Energy and Commerce Committee.

Rep. Henry Waxman says that his House Committee's investigation into the Gulf oil spill reveals that the blowout preventer had a leak in a crucial hydraulic system before the blowout. Without hydraulic pressure the blowout preventer's "variable bore ram," intended to close tight around the pipe and seal it, can not activate. And at a hearing in Louisiana on Tuesday, the government engineer who gave oil giant BP the final approval to drill admitted that he never asked for proof that the blowout preventer worked. [Huffington Post]

In the days after the blowout BP engineers tried to activate the blowout preventer, but failed because the device had been greatly modified and the diagrams BP got from the equipment's owner didn't match the device's new configuration, congressional investigators said Wednesday. BP engineers wasted many hours before figuring this out. Who ordered the alterations in the blowout preventer? Transocean, the owner of the blowout preventer and of the sunken Deepwater Horizon rig, said any alterations would have come at BP's instigation; BP, which owns the well and hired Transocean to drill it, said it had never sought the changes.

Testimony given before the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations, said alterations to the blowout preventer prevented the massive "variable bore ram" from activating. This ram is intended to cut the pipe and seal it. The alteration had connected a useless test ram - not the variable bore ram - to the socket that was supposed to activate the variable bore ram. [Kansas City Star, a McClatchy Newspaper]

More:

• Huffington Post: Eyewitness accounts of the Deepwater Horizon well blowout
• Gulf Oil Spill Could Devastate U.S. Eastern Seaboard
• Offshore Drilling Outpaced Oil Industry's Safety Knowledge
• Deepwater Horizon Blowout - The True Story
• Oil industry failed to heed blowout warnings - The warnings were there a decade ago.