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State joins lawsuit against Diebold

By Ian Hoffman, STAFF WRITER ANG News  08 September 2004

California ped its criminal investigation of Diebold Election Systems Inc. on Tuesday, instead joining Alameda County and two electronic-voting activists in suing the Texas-based touch-screen voting machine maker.

Diebold officials hailed the move by Attorney General Bill Lockyer, saying, "We are pleased with the attorney general's decision that there is no basis for a criminal prosecution."

State and local officials said Diebold was far from exonerated.

Lockyer and Alameda County, Diebold's first major West Coast client, added themselves to a False Claims Act case that, with a national election under way, could send tens of millions of dollars of voting-system sales revenue back to state and local coffers if Diebold were found liable.

More likely, the entry of California and one of its largest counties into the case increases pressure on Diebold to offer some combination of cash and guarantees that its voting systems will operate well in November.


Either way, according to Cindy Cohn, legal director for the Electronic Frontier Foundation and a critic of paperless touch-screen voting, the state's entry "dramatically changes the dynamic of the case."

"This is a representative of the people of the state of California saying we think false claims were made in this case, and that adds to the weight of the claims," she said.

Activists Bev Harris and Jim March of BlackBoxVoting.org, a group that has challenged e-voting and Diebold in several states, originally sued Diebold in November.

Their False Claims Act suit, filed under seal and in the name of state and local taxpayers, alleged that Diebold sold a nearly $13 million touch-screen system to Alameda County by misrepresenting its accuracy, security and government approval. As state and county attorneys weighed the case, state and local elections officials found that Diebold had installed unapproved software in Alameda County's touch-screens, that its system was vulnerable to hacking and that its central vote-tabulating program gave thousands of absentee votes to the wrong candidates.

"We received assurances when they sold a voting system to us, and those assurances have not been met," said Alameda County Counsel Richard Winnie.

Secretary of State Kevin Shelley blasted Diebold for what he called a "culture of deceit" and referred the company to the state attorney general for criminal investigation.

Diebold attorneys at the firm Jones Day argued that no criminal laws were broken state officials had not required all voting software to be individually certified under former Secretary of State Bill Jones and said that if Diebold were in violation, so was almost every other voting-system vendor.

In recent months, state elections officials have concluded that Diebold's main competitors, Oakland-based Sequoia Voting Systems and Omaha, Neb.-based Election Systems & Software, also were operating voting systems lacking clear certification.

By late last week, state prosecutors had decided instead to pursue Diebold in civil court.

"At this point, based on our investigation, we determined it would not be fruitful or wise to continue with the criminal investigation," said Tom Dresslar, spokesman for the Office of the Attorney General.

"We determined there was sufficient evidence for the False Claims case," he said.

Under California's False Claims Act, a government supplier can be sued by anyone with evidence that the contractor used false statements to secure the sale. The contractor automatically is subject to three times the damages, which could be based on the entirety of the original sale.

In a prepared statement Tuesday, Diebold officials said "the company is confident that the state's decision to intervene will aid in a fair and dispassionate examination of the issues in the case."

Alameda County's Winnie said his county wants reimbursement for the extra staff and material costs of shoring up its Diebold voting system, and enforceable assurances that the equipment is secure and accurate.

Lowell Finley, an Oakland-based elections lawyer who filed the original suit on behalf of Harris and March, said his clients will watch to ensure the state and county to pursue the case with vigor.

"Now that the state's attorney general has waded into this controversial issue, it is going to be important for him and the people of the state that he delivers something substantial, either in terms of a verdict or a very favorable settlement for California taxpayers," Finley said. "I don't think he would have made the decision to intervene if he didn't think that was possible."

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