In 2006, Wikileaks published a confidential memo written by Robert Downs, Political Counselor/spy for the U.S. in Venezuela. The subject of the memo is fraud in the 2004 Venezuela election allegedly perpetrated by Smartmatic.
The Venezuelan-owned Smartmatic Corporation is a riddle both in ownership and operation, complicated by the fact that its machines have overseen several landslide (and contested) victories by President Hugo Chavez and his supporters. The electronic voting company went from a small technology startup to a market player in just a few years, catapulted by its participation in the August 2004 recall referendum. 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. The Smartmatic machines used in Venezuela are widely suspected of, though never proven conclusively to be, susceptible to fraud. The company is thought to be backing out of Venezuelan electoral events, focusing now on other parts of world, including the United States via its subsidiary, Sequoia [Voting Systems].
Downs details the strong circumstantial evidence of fraud in the 2004 election. Although the evidence is not conclusive, and Chavez's opposition of course has a political interest in claiming fraud on the election, the design of Systematic's voting architecture left the door open to change votes secretly.
Of course, the Venezuelan opposition is convinced that the Smartmatic machines robbed them of victory in the August 2004 referendum. Since then, there have been at least eight statistical analyses performed on the referendum results. Most of the studies cross-check the results with those of exit polls, the signature drives and previous election results. One study obtained the data log from the CANTV network and supposedly proved that the Smartmatic machines were bi-directional and in fact showed irregularities in how they reported their results to the CNE central server during the referendum. (Note: The most suspicious data point in the Smartmatic system was that the machines contacted the server before printing their results, providing the opportunity, at least, to change the results and defeat the rudimentary checks set up by international observation missions. Since August 2004, the CNE has not repeated this practice.) These somewhat conspiratorial reports perhaps serve to breathe life into a defeated opposition, but have never proved conclusively the fraud.
(Emphasis added.) Smartmatic's founding is also suspicious.
If Smartmatic can escape the fraud allegation, there s still a corruption question. Well before Smartmatic, Venezuelan law had dictated that voting ought to be automated to limit fraud—the U.S. company ES&S [Election Systems & Software] and Spanish firm Indra had already sold systems to the electoral body. When the new pro-Chavez CNE was named in September 2003, however, it immediately set out to replace all existing systems. Declaring the bid process to be an emergency (though there was as yet no referendum scheduled), the CNE bypassed normal procedures and initiated a closed bid process. Smartmatic won the contract, which totaled at least US$128 million, including the delivery of 20,000 touch-screen voting machines (re-engineered lottery machines) yet to be built. There were immediate questions about how a virtually unknown company with no electoral experience could have landed such a large contract. . . . There were additional allegations of impropriety in October 2005 when the press reported that Smartmatic had paid the bill of CNE President Jorge Rodriguez at an exclusive Boca Raton resort. The company claimed Rodriguez had reimbursed them for the stay, during which Rodriguez reportedly examined an unspecified electoral system Smartmatic was developing. There were subsequent, unconfirmed rumors that Rodriguez was lobbying for Smartmatic in other countries.
(Emphasis added.) Smartmatic expanded into the U.S. in 2005 with the purchase of Sequoia.
Smartmatic acquired the U.S voting machine company Sequoia Voting Systems on March 8, 2005, Mugica reported. All U.S. election machinery is assembled in New York, he said. Mugica noted that while their U.S. operations were important, more than half their sales were outside of Venezuela and the United States. The other Smartmatic company was based in Bridgetown, Barbados, where Mugica said the international sales operation was located. Most of the manufacturing for their electoral and other electronic machinery was done in China, Mugica said, with some component work also done in Taiwan. Smartmatic also manufactures some items in Italy through the company Olivetti (which built the original Smartmatic machines for Venezuela).
Olivetti created the first electronic voting systems for the European Parliament in 1981. It is worth noting Smartmatic assembled the machine in N.Y. in 2005, while Hillary Clinton was Senator of the state. It is highly likely Clinton had some knowledge of Smartmatic developing the machines in her state, as evidenced by her 2006 comment "we should have made sure that we did something to determine who was going to win [the Palestinian election]," which strongly suggests she had knowledge of the existence of technology to rig elections.It is also of note component work was done in China. There is also a family connection between one of the founders of Smartmatic and the then Venezuelan Ambassador to the U.S.
Mugica has told poloffs [political officers, viz., U.S. intelligence assets] on several occasions that Anzola, Pinate, and he are the owners of Smartmatic, though they have a list of about 30 investors who remain anonymous. Jose Antonio Herrera, Anzola's father-in-law (and first cousin to Venezuelan Ambassador to the United States Bernardo Alvarez), told poloff in 2004 the silent partners were mainly upper class Venezuelans, some of whom were staunch Chavez opponents.
The fact is there are 30 unidentified seed investors in Smartmatic; it could be disinformation the money behind the company is from Venezuela. If rich Venezuelan businessmen were operating for Chavez in the background, why go through the charade of selling itself as an American-based company to Chavez's representatives?
Mugica pitched Smartmatic as a U.S. company registered in Delaware with offices in Boca Raton, Florida. In fact, poloffs had several discussions with Mugica in the course of facilitating his L-1 inter-company transfer visa to work in the United States. Mugica said the company's corporate offices were in Boca Raton, but most of the research staff of some 70 employees remained in Caracas.
In summary, the wikileaks cable shows US intelligence was aware in 2006 that:(1) Smartmatic had the technical ability and opportunity to rig the 2004 Venezuelan election, even if it did not do so in fact. (2) Smartmatic had a presence in the U.S. as early as 2005 through Sequoia. (3) The original source of funding behind Smartmatic is unknown.