Smartmatic

History

Founding

In 1997, three engineers, Antonio Mugica, Alfredo José Anzola and Roger Piñate, began collaborating in a group while working at Panagroup Corp. in Caracas, Venezuela. Smartmatic was officially incorporated on 11 April 2000 in Delaware by Alfredo José Anzola. Smartmatic then established its headquarters in Boca Raton, Florida, with seven employees. Following the 2000 United States presidential election and its hanging chad controversy in Florida, the group proposed to dedicate a system toward electoral functions. After receiving funds from private investors, the company then began to expand.

Expansion

Smartmatic was a little-known firm with no experience in voting technology before it was chosen by the Venezuelan authorities to replace the country's elections machinery ahead of a contentious referendum that confirmed Hugo Chávez as president in August 2004. Before the election, Smartmatic was part of a consortium that included a software company partly owned by a Venezuelan government agency. In March 2005, with a windfall of some $120 million from its first three contracts with Venezuela, Smartmatic then bought the much larger and more established Sequoia Voting Systems, which by 2006 had voting equipment installed in 17 states and the District of Columbia. On 26 August 2005, Sequoia Voting Systems announced that Mr. Jack Blaine would serve in the dual role as President of Sequoia Voting Systems and President of Sequoia's parent company, Smartmatic.

Sale of Sequoia Voting Systems

On 8 November 2007, Smartmatic announced that it was divesting ownership of the voting machine company Sequoia Voting Systems. However, in April 2008, Smartmatic still held a $2 million note from SVS Holdings, Inc., the management team which purchased Sequoia Voting Systems from Smartmatic, and at that time Sequoia's machines still used Smartmatic's intellectual property.

SGO Corporation

In 2014, Smartmatic's CEO Antonio Mugica and British Lord Mark Malloch-Brown announced the launching of the SGO Corporation Limited, a holding company based in London whose primary asset is the election technology and voting machine manufacturer. Lord Malloch-Brown became chairman of the board of directors of SGO since its foundation, while Antonio Mugica remained as CEO of the new venture. They were joined on SGO's board by Sir Nigel Knowles, Global CEO of DLA Piper, entrepreneur David Giampaolo and Roger Piñate, Smartmatic's COO and co-founder. Malloch-Brown stepped down as chair in December 2020.

The aim of SGO, according to its CEO was "to continue to make investments in its core business (election technology), but it is also set to roll out a series of new ventures based on biometrics, online identity verification, internet voting and citizen participation, e-governance and pollution control."

Elections

The company was contracted in 2004 for the automation of electoral processes in Venezuela. Since 2004, its election technology has been used in local and national elections in Africa, Argentina, Belgium, Brazil, Bulgaria, Chile, Ecuador, Italy Mexico, the Philippines, Singapore, the United Kingdom, the United States and Venezuela.

Africa

Smartmatic has operated in Uganda, Zambia and is still deploying an identity management project in Sierra Leone. In 2010, Smartmatic has worked with the United Nations Development Programme and Zambian authorities to modernise the voter registry using biometric technology. In 2016, they maintained the voter registry ahead of the elections. Smartmatic also assisted the Electoral Commission of Uganda to modernise its election processes to increase the transparency of the 2016 general elections. The polling company supplied over 30,000 biometric machines across 28,010 polling stations, from the capital of Kampala to remote rural communities to verify the identity of over 15 million people.

Armenia

During the 2017 Armenian parliamentary election, a voter authentication system was used for the first time. The identity of the voter was validated prior to voting using Voter Authentication Devices (VADs), which contained an electronic copy of the voter lists. The introduction of new technologies in the electoral process was strongly supported by the opposition and civil society. Smartmatic provided 4,000 Voter Authentication Devices to the UNDP project "Support to the Electoral Process in Armenia" (SEPA). It was funded by the EU, United States, Germany, United Kingdom, and the Government of Armenia.

According to final reports from The International Elections Observation Missions (IEOM) "The VADs functioned effectively and without significant issues." Observers reported the introduction of the VADs was welcomed by most IEOM interlocutors as a useful tool for building confidence in the integrity of Election Day proceedings. Observers also mentioned in the final report that the late introduction of the VADs could have led to a limited time for testing of equipment and training of operators, stating "Observers noted some problems with scanning of ID documents and fingerprints; however, this did not lead to significant disruptions of voting. IEOM observers noted 9 cases of voters attempting multiple voting that were captured by the VADs. The VADs provided the possibility for voters to be redirected, in case they were registered in another polling station in the same TEC, and this was observed in 55 polling stations."

Belgium

Electronic voting in Belgium has been utilized since the 1991 Belgian general election. Belgium is one of the few European countries that use electronic voting. In 2012, Belgium approved a ten-year contract with Smartmatic to be the election technology supplier after an evaluation period of three years. In an evaluation by constitutional law researcher Carlos Vegas González, he stated that the printout ballot increased transparency and noted that Smartmatic's system was independently certified by PricewaterhouseCoopers.

Brazil

Smartmatic provided election technology services to Brazil's Superior Electoral Court (TSE) for the 2012 Brazilian municipal elections, 2014 Brazilian general election and 2016 Brazilian municipal elections cycles.

In October 2012, Smartmatic provided election support for data and voice communications to 16 states in Brazil, and the Federal District (FD) (deploying 1,300 Broadband Global Area Network (BGAN) satellite devices), as well as support services to voting machines. These services implied hiring and training 14,000 technicians who worked at 480,000 polling stations. In 2014, the Brazilian electoral commission relied on an increased number of BGAN terminals, deployed by Smartmatic, to enable results transmission. BGAN satellite broadband voice and data service was used to connect voting stations to the nation's electronic voting system.

Estonia

In 2014, Smartmatic and Cybernetica, the Estonian IT lab that built the original Internet voting system used in the country, co-founded the Centre of Excellence for Internet voting. The centre is working with the government of Estonia to advance Internet voting on a global scale.

Estonia is the only country to run Internet voting on a wide scale, where citizens can access services through their eID card. The e-voting system, the largest run by any European Union country, was first introduced in 2005 for local elections, and was subsequently used in the 2007, 2011 and 2015 parliamentary elections, with the proportion of voters using this voting method rising from 5.5 per cent to 24.3 per cent to 30.5 per cent respectively.

Some experts have warned that Estonia's online voting system might be vulnerable to hacking. In 2014, J. Alex Halderman, an associate professor at the University of Michigan, and his group, described as being "harshly critical of electronic voting systems around the world", reviewed Estonia's voting system. Halderman described the Estonian "i-voting" system as "pretty primitive by modern standards ... I got to observe the processes that they went through, and there were just—it was just quite sloppy throughout the whole time". A security analysis of the system by the University of Michigan and the Open Rights Group that was led by Halderman found that "the I-voting system has serious architectural limitations and procedural gaps that potentially jeopardize the integrity of elections". The analysis concluded:

As we have observed, the procedures Estonia has in place to guard against attack and ensure transparency offer insufficient protection. Based on our tests, we conclude that a state-level attacker, sophisticated criminal, or dishonest insider could defeat both the technological and procedural controls in order to manipulate election outcomes. ... Due to these risks, we recommend that Estonia discontinue use of the I-voting system.

The Estonian National Electoral Committee responded to the report, stating that the claims "were unsubstantiated and the described attacks infeasible." Before each election, the system is rebuilt from the ground up, and security testing including penetration testing and denial-of-service mitigation tests are carried out. In their statement, the Estonian National Electoral Committee says: "every aspect of online balloting procedures is fully documented, these procedures are rigorously audited, and video documenting all conducted procedures is posted online. In addition to opening every aspect of our balloting to observers, we have posted the source code of our voting software online. In the past decade, our online balloting has stood up to numerous reviews and security tests. We believe that online balloting allows us to achieve a level of security greater than what is possible with paper ballots".

Philippines

On 11 August 2008, automated elections was implemented in the Philippines through the 2008 Autonomous Region in Muslim Mindanao general election with it overseen by the Carter Center. In the Maguindanao province, voters used Smartmatic's electronic voting machines, while voters in the other 5 provinces (Shariff Kabunsuan, Lanao del Sur, Basilan, Sulu, and Tawi-Tawi) used manually marked ballots processed using OMR technology. The overall reaction of both the public and authorities was positive toward the process. Random audits performed by the Commission on Elections (Comelec) resulted in an accuracy rate over 99.5% in all elections from 2008 where Smartmatic equipment was utilized.

The implementation of the system was also controversial as several groups which were benefiting from the traditionally fraudulent conduct of Philippines polls found themselves facing great political and economic loss with the promised transparency and audit-ability of the automated elections system. The Manila Times stating that "only the truly uninformed would still find Smartmatic's combination of PCOS/VCM and CCS an acceptable solution to the automation of Philippine elections" and that "glitches" as well as the "lack of transparency ... convinced us of the system's unreliability and its vulnerability to tampering". Others supported Smartmatic's entry into the nation, with one group, the Concerned Citizens Movement, praising the company's performance after initially requesting Comelec to not use Smartmatic's systems.

On May 10, 2010, Monday, Smartmatic adapted the system to the national level following its usage at ARMM two years earlier and preparations for the former from 2009 to 2010. It covered live with full coverage from ABS-CBN, ANC and GMA Network. Senator Benigno Aquino III succeeded Gloria Macapagal Arroyo as President, while Makati City mayor Jejomar Binay succeeded Noli de Castro as Vice President of the Philippines by June 30, 2010. Elected legislators of this year, together with the incumbent congresspersons from the 2007 elections, constitute the 15th Congress of the Philippines.

A survey conducted by the Social Weather Stations (SWS) showed that 75% of Filipinos questioned were satisfied with the conduct of the automated elections. The survey also showed that 70% of respondents were satisfied with Smartmatic.

On 13 May 2013, halfway between its last Presidential elections in 2010 and its next in 2016, the Philippines held its midterm elections where 18,000 positions were at stake. Smartmatic again provided technology and services to Comelec. The same 82,000 voting machines used in 2010 were deployed.

Singapore

From the 2020 general election onwards, Smartmatic was used for the electronic registration of voters at polling stations on polling day, replacing the need for election officials to manually strike out each voter's particulars from a hardcopy register of electors when a voter has voted.

United States

In the 2016 Utah Republican caucus, where Utah Republicans voted to choose the party's nominee for president in the 2016 US Presidential election, the voters had the opportunity to vote using traditional methods or to vote online. For online voting, the Utah Republican Party used an internet voting system developed by the Smartmatic-Cybernetica Internet Voting Centre of Excellence, based in Estonia.

Despite warnings from security experts, Utah GOP officials billed the online voting system, for which the state paid $150,000. Multiple issues occurred with the system, with voters receiving error messages and even being blocked from voting. Smartmatic received thousands of calls from Utah voters surrounding issues with the process. The Washington Post states that "the concern seems to be less with the technology and more with the security of the devices people use to vote".

According to Joe Kiniry, the lead researcher of Galois, a technology research firm:

Several of us did a lightweight analysis of it remotely, to see how it was built and deployed and this sort of thing ... we found that they were using technologies that even modern Web programmers stay away from. ... It's like the dumbest possible choices are being made by some of these companies with respect to deployed technology that should be mission-critical!

Responses from voters, who participated in the caucus from more than 45 countries, was positive: 94% approved of the experience, 97% responded that they were interested in participating in future online elections and 82% thought online voting should be used nationally.

In 2017, Los Angeles County signed a $282 million contract with Smartmatic to create an election system to be used for future elections, and became the first publicly owned voting system in the United States. The system was first used during the 2020 California primary elections. Both software and hardware were developed in the United States by Smartmatic, while ownership of all products and intellectual properties were then given to Los Angeles County. The machines developed incorporate an interactive ballot that is printed by each voter to validate results, and then deposited back into voting machines. According to The Voting System Assessment Project, interest in the voting system was expressed by other districts in the United States and internationally.

Venezuela

Smartmatic was the main technology supplier for fourteen Venezuelan national elections. In March 2018, Smartmatic ceased operations in Venezuela.

Venezuela's previously existing laws that were established before Hugo Chávez's Bolivarian Revolution stated that automated voting was required in Venezuela, with United States firm Election Systems & Software and Spanish company Indra Sistemas already being used in the country. In response to a bid process for the 2004 Venezuela recall election initiated by the National Electoral Council (CNE), Venezuela's electoral authority, the SBC Consortium was formed in the third quarter of 2003. The SBC Consortium comprised Smartmatic, Bizta, and telecommunications organization CANTV. For the 2004 elections, the SBC Consortium competed with Indra and other companies, ultimately winning the contract worth $128 million. The voting machines used previously, furnished by Indra Sistemas, were mere ballot scanners having only basic functions for storing cast votes until the end of Election Day, with no feedback whatsoever for the voter. Smartmatic had re-engineered Olivetti lottery machines used in Italy, essentially state-of-the-art PCs, each providing a colour touchscreen, a thermal printer, and advanced programming handling the voting process and printing of VVPAT receipts for the voter to check, and also tally reports and data transmission at voting session closure, with special emphasis on security. Other than the touchscreen (operating under program control), there was no input device or communications in force during Voting Day. Smartmatic's role in the election was to oversee electoral workers' training and the preparation, testing and deployment of voting machines. Bizta sent manual votes in remote areas to software centers and CANTV provided logistical assistance.

In October 2012, Smartmatic participated in the elections of 3 countries. In Venezuela, 7 October, for the first time in the world, national elections were carried out with biometric voter authentication to activate the voting machines. Out of 18,903,143 citizens registered to vote in the presidential elections, voter turnout was around 81%, both record figures in Venezuelan electoral history.

Smartmatic stated that the results of the 2017 Venezuelan Constituent Assembly election were manipulated. On 2 August 2017, Smartmatic CEO Antonio Mugica stated on a press briefing in London "We know, without a doubt, that the result of the recent elections for a National Constituent Assembly were manipulated," and added "We estimate that the difference between actual and announced participation by the authorities is at least one million votes." Reuters also reported that according to internal CNE documents leaked to the agency, only 3,720,465 votes were cast thirty minutes before polls were expected to close, though polls were open for an additional hour. The company later left Venezuela in 2018.

Other endeavors

Automation

In 2011, The District of Cartagena, Colombia selected Smartmatic as technology provider for the new Financial Administration Service of the Integrated Mass Transit System (Transcaribe), which operates based on a highly automated fare collection and fleet control system.

Identification

Smartmatic was chosen to develop Mexico's new ID card in 2009, with the process involving the biometric registration of over 100 million people. Bolivia also used Smartmatic's biometric capabilities with the registration of 5.2 million people for electoral systems.

Security

Smartmatic launched its banking security endeavor in 2002 utilizing its Smartnet system, which it described as "one of the earliest platforms to enable the 'Internet of Things'". The company began providing security technology and surveillance equipment for Santander-Serfin Bank in Mexico at their bank branches in 2004. Since 2006, the Office of the Mayor of Metropolitan Caracas in Venezuela began the installation of the integrated public security system that helps authorities to provide immediate response to citizens whose safety has been jeopardized.

Controversy

Venezuela

After the presidential recall referendum of 2004 in Venezuela, some controversy was raised about the use of electronic voting (SAES voting machines) in that country. Studies following the 2004 Venezuela recall elections found that Smartmatic's network was "bi-directional" with data being able to be transferred both ways between Smartmatic devices and the telecommunications company CANTV, with alleged irregularities found between the Smartmatic and Venezuela's National Electoral Council election results. Other independent election monitors claimed fraud and submitted appeals, and statistical evaluations including a peer-reviewed article in 2006 and a special section of 6-peer-reviewed article in 2011 concluded that it was likely that electronic election fraud had been committed. The analysis of communication patterns allowed for the hypothesis that the data in the machines could have been changed remotely, while another of the articles suggested that the outcome could have been altered from about 60% against the sitting president, to 58% for the sitting president.

Representatives from international election observation agencies attested that the election conducted using SAES was at that time fair, accurate and compliant with the accepted timing and reliability criteria. These agencies included the Carter Center, the Organization of American States (OAS), and the European Union (EU). Jennifer McCoy, Carter Center Director for the Americas, stated that several audits validated the accuracy of the machines. "We found a variation of only 0.1% between the paper receipts and the electronic results. This could be explained by voters putting the slips in the wrong ballot box."

Dr. Tulio Alvarez, who had performed an independent observation of the election which detailed the networks between CNE and Smartmatic, described the Carter Center's findings as "insufficient, superficial and irresponsible".

Prior to the 2005 Venezuela parliamentary election, one technician could work around "the machine's allegedly random storage protocols" and remove voting secrecy. Following this revelation, voter turnout dropped substantially with only 25% of registered Venezuelans voting and opposition parties withdrawing from the election. This resulted in Hugo Chávez's party, as well as his allied parties, to control 100% of Venezuela's National Assembly.

Affiliations with Bolivarian government politicians raised suspicions, with instances of an interior vice minister, Morris Loyo Arnáez, being hired to lobby for Smartmatic contracts and with the company paying for the National Electoral Council (CNE) president Jorge Rodríguez and his sister Delcy Rodríguez to stay at the Boca Raton Resort & Club in Boca Raton, Florida. Vice Minister Loyo was paid $1.5 million by Smartmatic as a "sales commission" and his continual payments with the company eventually doubled.

United States

At local elections in 2006 in Chicago and Cook County, allegations arose that Smartmatic might have ties to the Venezuelan government. These allegations were picked up again in 2020 by a legal representative of President Donald Trump, who accused it of working with the socialist government of Venezuela in order to derail President Trump's reelection.

Following the 2004 Venezuelan recall election, Smartmatic acquired Sequoia Voting Systems, one of the leading US companies in automated voting products from the British company De La Rue in 2005. Following this acquisition, U.S. Representative Carolyn B. Maloney requested an investigation to determine whether the Committee on Foreign Investment in the United States (CFIUS) had followed correct processes to green-light sale of Sequoia to Smartmatic, which was described as having "possible ties to the Venezuelan government". The request was made after March 2006 following issues in Chicago and Cook County, where a percentage of the machines involved were manufactured by Sequoia, and Sequoia provided technical assistance, some by a number of Venezuelan nationals flown in for the event. According to Sequoia, the tabulation problems were due to human error, as a post-election check identified only three mechanical problems in 1,000 machines checked while election officials blamed poor training. Other issues were suspected to be related to software errors linked to the voting system's central computer.

Following the request, Smartmatic and Sequoia submitted a request to be reviewed by the CFIUS while also denying links to the Venezuelan government. The company disclosed that it was mainly owned by four Venezuelans—Antonio Mugica (78.8%), Roger Piñate (8.47%), Jorge Massa Dustou (5.97%), and Alfredo José Anzola (3.87%)—with a small amount of shares owned by employees (2.89%). Smartmatic subsequently sold Sequoia and later withdrew from Cook County in December 2006.

For similar legal actions, see Dominion Voting Systems defamation lawsuits.

Smartmatic was the subject of accusations of fraud in the aftermath of the 2020 United States presidential election, notably promoted by the personal attorney to President Donald Trump, Rudy Giuliani, who asserted the company was founded by the former socialist Venezuelan leader Hugo Chávez and that it owned and provided software to a related company, Dominion Voting Systems. Giuliani asserted Dominion is a "radical-left" company with connections to antifa that sent American voting data to foreign Smartmatic locations. Others falsely asserted that Smartmatic was owned by George Soros and that the company owned Dominion. Smartmatic voting machines were not used in any of the battleground states that determined Joe Biden's election victory.

Philippines

Smartmatic has been criticized by various entities for its motives and handling of elections in the Philippines. In opinion polls, voters have approved of Smartmatic's automated system used by the Commission on Elections (COMELEC), with 84% of respondents stating that they had "big trust" in the automated process according to a June 2019 Pulse Asia Research poll.

The Manila Times has stated that Smartmatic's system was unreliable, glitchy and vulnerable to tampering. After the newspaper reported that Smartmatic had been funneling voter information through "unofficial servers", The Manila Times ultimately called on officials from the country's electoral body, COMELEC, to resign. William Yu of the Parish Pastoral Council for Responsible Voting, an election NGO, stated that such servers perform "many other activities before the elections" and that it "does not necessarily, automatically mean that data has been transmitted", though he requested that COMELEC and Smartmatic provide an explanation.

In early 2017, The Manila Times reported that Smartmatic machines were equipped with SD cards where voter entries are recorded, citing Glenn Chong, a former congressman of the NGO Tanggulang Demokrasya (TANDEM) stating that "at least one SD card was tampered with", allegedly showing that Smartmatic's system was "very much open to hijacking or sabotage". A reviewer of the Philippine Linux Users' Group stated that hacking into Smartmatic's system is "very difficult for outsiders" and that "it's not as difficult to hack into the system if you're a COMELEC or a group of COMELEC or Smartmatic personnel", expressing importance of monitoring by COMELEC and asking the public to have good faith in the electoral body.

The IBON Foundation, a non-profit research organization based in the Philippines also criticized Smartmatic's system, stating in 2016 that "Why Smartmatic keeps on winning COMELEC contracts boggles the mind especially considering the numerous and major malfunctions by the machines and services that Smartmatic provided in the past two elections" and that there were "allegations of rigged bidding to favor Smartmatic such as designing contracts where only Smartmatic can qualify or omitting requirements that will otherwise disqualify Smartmatic".

Prior to the elections, Filipino-Americans called on President Barack Obama to investigate the background of Smartmatic prior to the elections due to its links to the Venezuelan government. Smartmatic described these actions as "trying to rehash a story based on market share". Following allegations of fraud, some employees of Smartmatic had their passports temporarily held. At a fraud inquiry on 20 May 2010, Heider Garcia of Smartmatic was questioned on the transparency and what he called "unforeseen" occurrences during the election process, with Philippine official Teodoro Locsin Jr. – an automated poll advocate – sharply rebuking Garcia. On 29 June 2010, the Philippine Computer Society (PCS) filed a complaint with the country's Ombudsman against 17 officials of the Commission on Elections and the Smartmatic-TIM Corp. for alleged "incompetence", graft and unethical conduct.