Verified Voting Blog: On the Proposed ES&S Merger

Bad for the country, bad for New York

On the face of it, it would seem that the proposed merger of Premier Voting Systems (aka Diebold) and Election Systems & Software (ES&S) shouldn’t matter much to New York State. After all, Premier pulled out of the state over a year ago, and ES&S splits the state’s voting system sales with a competitor, Dominion Voting Systems. But there’s plenty of reason for New Yorkers to be wary of further consolidation of the rapidly shrinking voting machine industry. Recall the not so distant past when ES&S, along with Sequoia Voting Systems, jointly decided that paperless voting was New York’s future and offered only touch screen DREs to the state. When New Yorkers for Verified Voting organized the first ever demonstration of a paper ballot system with an accessible Ballot Marking Device and an optical scanner at the Albany State Capitol, the makers of the AutoMark ballot marking device, with whom we had arranged the demo, were ordered by ES&S to remove the scanner because it didn’t fit their product plans. The New York Daily News reported this story in 2005:

At the Capitol recently, a lobbyist managed to shut down a demonstration of optical scanning by getting his client to pull its machine from the display. Assemblywoman Sandra Galef of Westchester called the company to object and was told that New York is “a touch-screen state.” ” I said, ‘We are?’” Galef recalled. “I’m a legislator. I don’t think I’ve voted on anything.”

Thanks to citizen activism, DREs were ultimately defeated in New York, but four years after that incident there remain only two vendors supplying voting systems to the state. Sequoia Voting Systems recently turned over their New York State contract to Canadian based Dominion Voting. That leaves this relatively small company up against the only other vendor left standing – ES&S, which by merging with Premier seeks to dominate US voting machine sales and service contracts. Domination of the voting system industry by a single corporation is bad for many reasons – less leverage for states to negotiate reasonable prices; transparency issues; even greater risks to security and reliability. Somehow, I can’t see it being good for New York.

But New York has two vendors, so there is competition, right? Yes, we do – for now. But a possible future New Yorkers might consider is one where Dominion is swallowed by ES&S, ceding it’s New York State voting machine contracts to ES&S just as Sequoia has with Dominion. This is not so unthinkable. A small company has incentive to sell out to a larger company anytime the company principals deem it in their best interests to do so. Recent history is full of small companies swallowed by larger ones which were swallowed in turn by even larger ones, as once diverse industries shrink and consolidate until controlled by just a few. This consolidation process is taking place in the voting machine industry right now, with ES&S and Premier’s merger effort as the most recent example. Is it so hard to imagine a scenario where ES&S makes an offer they can’t refuse and swallows Dominion, bringing New York State’s voting machine contracts under its exclusive control?

New York State’s own Senator Schumer has already spoken up, calling for the DOJ to investigate the potential merger. But it is also critical that local election officials and state Attorneys General weigh in on this, as they are in the best position to represent the interests of voting machine customers and the public. Unfortunately there is little time and the only opportunity to do so may be before the upcoming November 12 hearing of the Hart InterCivic antitrust complaint, which alleges violations of the Sherman Antitrust Act. Here in New York, we need to urge state Attorney General Cuomo to intervene along with other state Attorneys General and support Hart’s effort at injunctive relief. The proposed merger of ES&S and Premier is bad for the country, and bad for New York.

Originally posted at Bo Lipari’s Blog.

Comments are closed.