United States digs for voting machine links to Hugo Chavez

In the debate about the reliability of electronic voting technology, the South Florida parent company of one of the nation's leading suppliers of touch screen voting machines is drawing special scrutiny from the U.S. government.

Federal officials are investigating whether Smartmatic, owner of Oakland, Calif., Sequoia Voting Systems, is secretly controlled by Venezuelan President Hugo Chavez, the Miami Herald and the New York Times report, citing people familiar with the inquiry.

In July, a Treasury Department spokeswoman disclosed that a Treasury-led panel had contacted Smartmatic, and a company representative said his firm was "in discussions" with the panel. At the time, those discussions were informal. The government has now upgraded to a formal investigation, the newspapers reported.

Sequoia's electronic voting machines operate in 17 states. In Florida, the machines are used in four counties: Pinellas, Hillsborough, Palm Beach and Indian River.

Concerns about Smartmatic are keen on the eve of the Nov. 7 election, given fears that someone with unauthorized access to the electronic system could create electoral chaos. Some critics believe that if the Venezuelan government is involved, Smartmatic could be a ''Trojan horse" designed to advance Chavez's anti-American agenda.

However, officials in all four Florida counties using Sequoia said they were satisfied with the machines and were not concerned about allegations of a Chavez connection because company officials told them the Venezuelan government had no stake in the company.

''We are very satisfied," said Kathy Adams, a spokeswoman for the Palm Beach County supervisor of elections.

The inquiry stems from a May 4 letter to the Treasury Department by Rep. Carolyn Maloney, D-N.Y., raising concerns about Smartmatic's purchase of Sequoia last year. Maloney said she was disturbed by a 2004 article in the Miami Herald revealing that the Venezuelan government owned 28 percent of Bizta - a company operated by two of the same people who own Smartmatic. Bizta bought back those shares after the article appeared, and Smartmatic now characterizes the deal as a loan.

Bizta and Smartmatic had partnered with Venezuelan telephone giant CANTV to win a $91-million contract to supply electronic voting machines for Venezuelan elections, including the controversial 2004 referendum Chavez won.

Officials of both Smartmatic and the Venezuelan government strongly denied Saturday that Chavez's administration, which has been bitterly at odds with Washington, has any role in Smartmatic.

"The government of Venezuela doesn't have anything to do with the company aside from contracting it for our electoral process," the Venezuelan ambassador in Washington, Bernardo Alvarez, said Saturday night.

Botched municipal elections involving Sequoia machines in Chicago in March added to the suspicions.

When the Chicago City Council grilled Sequoia executive Jack Blaine in April, he revealed that some Venezuelans had provided technical support during the election and that some of the glitches could be traced to a component developed in Venezuela to print and transmit results to a central tabulation computer.

The Chicago Board of Election Commissioners is withholding further payment to Sequoia until after the Nov. 7 election.

Sequoia machines in Florida do not use the component involved in the Chicago problems, however.

The Smartmatic investigation is being conducted by the Treasury-led Committee on Foreign Investment in the United States, which determines whether deals involving foreign investors compromise national security.

Determining whether there really is a hidden connection to Chavez or anyone in his government is difficult because of Smartmatic's complex, though legal, corporate structure.

Smartmatic's corporate papers, obtained in Curacao by the Miami Herald, reveal a convoluted trail of companies incorporated abroad and operating through dozens of proxy holders - a structure seemingly designed to cloak the true owners.

The founders and principal owners of Smartmatic are Antonio Mugica and Alfredo Anzola. They are also the founders and owners of Bizta - the company the Venezuelan government once partly owned.

Though both men come from wealthy families, a decidedly anti-Chavez sector, their reluctance to provide specific details about ownership has continued to fuel suspicions about the company.

Information from the New York Times was used in this report.