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California AG joins lawsuit suit against voting companies


Associated Press 07 September 2004

California Attorney General Bill Lockyer joined a lawsuit Tuesday alleging that voting equipment company Diebold Inc. sold the state shoddy hardware and software, exposing elections to hackers and software bugs.

California's Alameda County also joined the false claims case, originally filed by a computer programmer and voting rights advocate. Faulty equipment in the March primary forced at least 6,000 of 316,000 voters in the county east of San Francisco to use backup paper ballots instead of the paperless voting terminals used throughout the county.

The lawsuit is the first e-voting case to rely on an obscure legal provision for whistleblowers who help the government identify fraud. Programmer Jim March and activist Bev Harris, who first filed the case in November, are seeking full reimbursement for Diebold equipment purchased in California.

Alameda County has spent at least $11 million on paperless touchscreen machines. State election officials have spent at least $8 million.

Because the lawsuit relies on an obscure provision called "qui tam," March and Harris could collect up to 30 percent of a reimbursement. The state could collect triple damages from Diebold, or settle out of court.

The attorney general's decision to join the e-voting lawsuit is unusual. The government declines to participate in about 70 percent of all qui tams filed, said Bob Bauman, a private investigator and former government consultant.

"The state clearly believes there's merit to the case," said Berkeley, Calif., attorney Lowell Finley, who represents March and Harris. "This is a significant event and good news for us."

Thomas W. Swidarski, Diebold senior vice president, said the state's intervention could lead to a "fair and dispassionate examination of the issues raised in the case."

Also Tuesday, the attorney general announced he would not pursue criminal charges against Diebold. Earlier this year, California Secretary of State Kevin Shelley banned one Diebold system after he found uncertified software that "jeopardized" the outcome of elections in several counties, and state voting officials began considering filing a criminal lawsuit against the company.

"We fully cooperated with the State as it looked into the issues and have always believed that the attorney general would reach this conclusion," Swidarski said.

Tom Dresslar, spokesman for Lockyer, said the decision to join the lawsuit came after months of investigation into problems with Diebold equipment. In the March primary, 573 of 1,038 polling places in San Diego County failed to open on time because of computer malfunctions.

The state will likely file its own complaint or an amended complaint within several weeks, if the parties don't settle out of court, Dresslar said.

Qui tam - often used to find fraud involving Medicare or defense contracts - is a provision of the Federal Civil False Claims Act. Some states have similar acts.

Individuals tip off the government to embezzlers or shoddy contractors - and the whistleblowers get up to 30 percent of the reimbursement.

Qui tam is an abbreviation from a Latin phrase meaning, "someone who sues on behalf of the king and on behalf of himself." The idea originated in 13th century England but wasn't used much until 1986, when rampant procurement fraud persuaded U.S. regulators to boost whistleblowers' share of payments. Whistleblowers filed 33 cases in 1987 and 326 cases in 2003.

In June 2003, pharmaceutical firm AstraZeneca agreed to pay $355 million after it set the average wholesale price for Zoladex higher than prices physicians paid - but failed to report discounts to Medicare. A vice president for sales at a rival filed the suit and received $47.6 million.

Federal qui tams totaled $7.8 billion through 2003. Whistleblowers collected $1.3 billion, according to San Jose, Calif.-based Bauman & Rasor Group, Inc.


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