Premier Election Solutions

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Premier Election Solutions
Type Public (NYSE: DBL)
Founded Flag of the United States Ohio (January 22, 2002)
Headquarters North Canton, Ohio, United States
Key people Thomas W. Swidarski, CEO & President
Kevin J. Krakora, EVP & CFO
David Bucci, SVP
Charles E. Ducey, Jr, SVP
George S. Mayes, Jr., SVP
Dennis M. Moriarty, SVP
James L.M. Chen, VP
John M. Crowther, VP & CIO
Warren W. Dettinger, VP
M. Scott Hunter, VP, Chief Tax Officer
Industry Electronic Voting hardware
Consulting
Products AccuVote-TSX, AccuVote-OS, AccuView Printer Module, Global Election Management System (GEMS), DIMS-NeT, ExpressPoll-2000, ExpressPoll-4000, VoteRemote Suite
Revenue US$2.8 billion ▲ (TTM 1Q2005)[1]
Operating income US$147.9 million ▲ (TTM 1Q2005)
[1]
Net income US$96.7 million ▲ (TTM 1Q2005)
[2]
Employees 14,603 2005)[3]
Website Premier Election Solutions

Premier Election Solutions[4], formerly Diebold Election Systems, Inc. (DESI) is a subsidiary of Diebold that makes and sells voting machines. Another subsidiary selling electronic voting systems in Brazil is Diebold-Procomp.

Contents

[edit] History

Premier Election Solutions, Inc. is currently run by David Byrd[5]. Previously, DESI was run by Bob Urosevich, who worked in the election systems industry since 1976. In 1979, Mr. Urosevich founded American Information Systems. He served as the President of AIS now known as Election Systems & Software, Inc. (ES&S) from 1979 through 1992. Bob's brother, Todd Urosevich, is Vice President, Aftermarket Sales with ES&S, DESI's chief competitor. In 1995, Bob Urosevich started I-Mark Systems, whose product was a touch screen voting system utilizing a smart card and biometric encryption authorization technology. Global Election Systems, Inc. (GES) acquired I-Mark in 1997, and on July 31, 2000 Mr. Urosevich was promoted from Vice President of Sales and Marketing and New Business Development to President and Chief Operating Officer. On January 22, 2002, Diebold announced the acquisition of GES, then a manufacturer and supplier of electronic voting terminals and solutions. The total purchase price, in stock and cash, was $24.7 million. Global Election Systems subsequently changed its name to Diebold Election Systems, Inc.

In 2006 Diebold decided to remove its name from the front of the voting machines for strategic reasons. CEO Thomas Swidarski announced he would decide in the beginning of 2007 if Diebold stays in the election business.[6] In August 2007 the company changed its name to "Premier Election Solutions".

[edit] Software

Together, ES&S and Premier Election Solutions are (as of 2004) responsible for tallying approximately 80% of the votes cast in the United States[7]. The software architecture common to both is a creation of Mr. Urosevich's company I-Mark[citation needed]. Some experts claim that this structure is easily compromised, in part due to its reliance on Microsoft Access databases. Britain J. Williams, responsible for certification of voting machines for the state of Georgia and a consultant to Diebold, has provided an assessment based on his accounting of potential exploits.[citation needed]

The Diebold GEMS central tabulator software, version 1.18.15, of which counted most votes in the United States[citation needed] in the U.S. presidential election, 2004, is at the center of controversy for apparent irregularities versus the 2004 United States presidential election controversy, exit polls. The Diebold AccuVote voting machine has also come under scrutiny especially by Ralph Nader's campaign.

[edit] Controversy

[edit] Ethical questions about Diebold personnel

Jeff Dean, Senior Vice-President and Senior Programmer at Global Election Systems (GES), the company purchased by Diebold in 2002 which became Diebold Election Systems, was convicted of 23 counts of felony theft for planting back doors in software he created for ATMs using, according to court documents, a "high degree of sophistication" to evade detection over a period of two years[8]. In addition to Dean, GES employed a number of other convicted felons in senior positions, including a fraudulent securities trader and a drug trafficker[9].

In December 2005, Diebold's CEO Wally O'Dell left the company following reports that the company was facing securities fraud litigation surrounding charges of insider trading[10].

[edit] O'Dell's fundraising

In August 2003, Walden O'Dell, chief executive of Diebold, announced that he had been a top fund-raiser for President George W. Bush and had sent a get-out-the-funds letter to Ohio Republicans. In the letters he says he is "committed to helping Ohio deliver its electoral votes to the president next year." Critics of Diebold interpreted this as implying that he might rig the company's electronic voting machines to give an unfair advantage to Bush. The letter also was seen as an indication of a perceived conflict of interest by critics. He has responded to the critics by pointing out that the company's election machines division is run out of Texas by a registered Democrat. He also claims the statement about delivering Ohio's electoral votes to Bush was simply a poor choice of words. Nonetheless, he vowed to lower his political profile lest his personal actions harm the company. O'Dell resigned his post of chairman and chief executive of Diebold on December 12, 2005 following reports that the company was facing securities fraud litigation surrounding charges of insider trading.

[edit] Security issues

For more information in the 2004 elections see: 2004 United States presidential election: Specific issues relating to Diebold machines and practices

DESI claims its systems provide strong immunity to ballot tampering and other vote rigging attempts. These claims have been challenged, notably by Bev Harris on her website, Blackboxvoting.org, and book by the same name. Harris claims there is also evidence that the Diebold systems have been exploited to tamper with American elections — a claim Harris expands in her book Black Box Voting. DESI has also come under fire for the recent discovery that the Diebold voting machines do not and did not in 2004 meet the Help America Vote Act (HAVA) error standard.[citation needed]

The controversy regarding electronic voting machines is related to a larger debate concerning the relative merits of open source and proprietary security products. Advocates of the open source model say that systems are more secure when anyone can view the underlying software code, identify bugs and make peer-reviewed changes. Advocates of proprietary systems claim that so-called black box systems are more secure because potential weaknesses are hidden.

Avi Rubin, Professor of Computer Science at Johns Hopkins University and Technical Director of the Information Security Institute has analyzed the source code used in these voting machines and reports "this voting system is far below even the most minimal security standards applicable in other contexts."[11] Following the publication of this paper, the State of Maryland hired Science Applications International Corporation (SAIC) to perform another analysis of the Diebold voting machines. SAIC concluded “[t]he system, as implemented in policy, procedure, and technology, is at high risk of compromise.”[12]

The company RABA did a security analysis of the Diebold AccuVote in January 2004 confirming many of the problems found by Avi Rubin and finding some new vulnerabilities.[13]

In June 2005, the Tallahassee Democrat reported that when given access to Diebold vote-counting computers, Bev Harris—a critic of Diebold's voting machines—was able to make 65,000 votes disappear simply by changing the memory card that stores voting results for one that had been altered. Although the machines are supposed to record changes to data stored in the system, they showed no record of tampering after the memory cards were swapped. In response, a spokesperson for the Department of State said that, "Information on a blog site is not viable or credible."[14]

In early 2006 the Diebold Election Systems subsidiary came under considerable fire from alternate media sources for creating voting systems without reasonable auditing, no paper trail, security holes, and software bugs. The attention negatively affected Diebold stock (though elections are only a small part of their business) and triggered investigations in several states after insiders revealed irregular practices in Diebold's election division. Diebold was the first major vendor to experience a serious backlash from poor quality, service and preparation in the election industry, and condemnation of Diebold helped to focus attention on other vendors (ES&S). According to Avi Rubin, the Johns Hopkins University computer science professor who first identified flaws in the technology in 2003, the machines are "much, much easier to attack than anything we've previously said... On a scale of one to 10, if the problems we found before were a six, this is a 10. It's a totally different ballgame." According to Rubin, the system is intentionally designed so that anyone with access can update the machine software, without a pass code or other security protocol. Diebold officials said that although any problem can be avoided by keeping a close watch on the machines, they are developing a fix. [15] Michael I. Shamos, a professor of computer science at Carnegie Mellon University who is a proponent of electronic voting and the examiner of electronic voting systems for Pennsylvania, stated "It's the most severe security flaw ever discovered in a voting system." Douglas W. Jones, a professor of computer science at the University of Iowa, stated "This is the barn door being wide open, while people were arguing over the lock on the front door." Diebold spokesman David Bear played down the seriousness of the situation, asserting that "For there to be a problem here, you're basically assuming a premise where you have some evil and nefarious election officials who would sneak in and introduce a piece of software. I don't believe these evil elections people exist."[16]

On July 31, 2006 the Open Voting Foundation released a press release which explains, with photographs, how to open the case with a screwdriver and alter the boot configuration of the Diebold TS so as to boot from EPROM, on-board flash memory or external flash memory. The implication is that a previously tested and certified machine could be booted using an unauthorized boot profile, and that such a boot profile could be activated with relatively little technical expertise. [17]

On October 30, 2006 researchers from the University of Connecticut demonstrated new vulnerabilities in Diebold AccuVote-OS optical scan voting terminal. The system can be compromised even if its removable memory card is sealed in place.[18]

On November 2, 2006, HBO premiered a documentary entitled "Hacking Democracy", concerning the vulnerability of electronic voting machines (primarily Diebold) to hacking and inaccurate vote totals. The company attempted to block the documentary prior to its broadcast, but was ultimately unsuccessful.

On January of 2007, a photo of the key used to open Diebold voting machines was posted in the company's website. Hackers and just about anyone with a knack for lockpicking were then able to produce their own duplicate key based on the photo. The key unlocks a compartment which contains a removable memory card, leaving the machine vulnerable to tampering. [19]

A report commissioned by Ohio’s top elections official on December 15, 2007 has found that all five voting systems used in Ohio (made by Elections Systems and Software; Premier Election Solutions, formerly Diebold; and Hart InterCivic) have critical flaws that could undermine the integrity of the 2008 general election.[20]

[edit] States rejecting Diebold

In 2004, after an initial investigation into the company's practices, California Secretary of State Kevin Shelley issued a ban on one model of Diebold voting machines in that state. The Attorney General of California, Bill Lockyer, sued Diebold charging that it had given false information about the security and reliability of Diebold Election Systems machines that were sold to the state. To settle the case, Diebold agreed to pay $2.6 million and to implement certain reforms. [21] On August 3, 2007, California Secretary of State Debra Bowen decertified Diebold and three other electronic voting systems after a "top-to-bottom review of the voting machines certified for use in California in March 2007."[22][23]

In April 2007 the Maryland General Assembly voted to replace paperless touchscreen voting machines with paper ballots counted by optical scanners, effective in time for the 2010 general (November) elections. The law, signed by the Governor in May 2007, was made contingent on the provision of funding by no later than April 2008. As of June 2007, Governor O'Malley (Democrat) had not requested budget for the purchase of optical scanners and ballot-marking devices (for handicapped voters to use in lieu of hand-marking their ballots.) Under the Maryland Constitution, such a request from the Governor is required before the General Assembly may vote the funding. The next time that the General Assembly meets is January-April 2008.

In March 2006, the Maryland House of Delegates voted to ban Diebold machines from state primary and general elections. Republican governor Robert Ehrlich has had heated argument against the use of Diebold equipment with one of its strongest proponents, Linda Lamone, a Democratic appointee from a previous administration. The Senate still has to pass the bill in order for it to become law, but the proposal highlights concerns that the Diebold machines do not leave a paper trail. The text of the law states that Diebold must equip its touch-screen voting machines to produce paper receipts by the 2008 elections in order to keep its contract with the state. Similar concerns have been voiced in other states, including Florida and California.

[edit] Leaked memos

In September 2003, a large number of internal Diebold memos, dating back to mid-2001, were posted to the Web by the website organizations Why War? and the Swarthmore Coalition for the Digital Commons, a group of student activists at Swarthmore College. Congressman Kucinich (D-OH) has placed portions of the files on his websites.[24] Diebold's critics believe that these memos reflect badly on Diebold's voting machines and business practices. For example: "Do not to [sic] offer damaging opinions of our systems, even when their failings become obvious."[25] In December 2003, an internal Diebold memo was leaked to the press, sparking controversy in Maryland. Maryland officials requested that Diebold add the functionality of printing voting receipts. The leaked memo said, "As a business, I hope we're smart enough to charge them up the wazoo [for this feature]".

Diebold attempted to stop the publication of these internal memos by sending cease and desist letters to sites hosting these documents, demanding that they be removed. Diebold claimed the memos as their copyrighted material, and asserted that anyone who published the memos online was in violation of the Online Copyright Infringement Liability Limitation Act provisions of the DMCA found in § 512 of the United States Copyright Act. When it turned out that some of the challenged groups would not back down, Diebold retracted their threat. Those who had been threatened by Diebold then sued for court costs and damages, in OPG v. Diebold. This suit eventually led to a victory for the plaintiffs against Diebold, when in October 2004 Judge Jeremy Fogel ruled that Diebold had abused its copyrights in its efforts to suppress the embarrassing memos.

[edit] Stephen Heller (Whistleblower)

In January and February of 2004, a whistleblower named Stephen Heller brought to light memos from Jones Day, Diebold's California attorneys, informing Diebold that they were in breach of California law by continuing to use illegal and uncertified software in California voting machines. California Attorney General Bill Lockyer filed civil and criminal suits against the company, which were dropped when Diebold settled out of court for $2.6 million. In February 2006, Heller was charged with three felonies for this action.[26][27] On November 20, 2006 Heller made a plea agreement to pay $10,000 to Jones Day, write an apology, and receive three years probation.[28][29]

[edit] Diebold and Kenneth Blackwell's Conflict of Interest

Ohio State Senator Jeff Jacobson, Republican, asked Ohio Secretary of State Ken Blackwell in July, 2003 to disqualify Diebold's bid to supply voting machines for the state, after security problems were discovered in its software,[30] but was refused. Blackwell had ordered Diebold touch screen voting machines, reversing an earlier decision by the state to purchase only optical scan voting machines which, unlike the touch screen devices, would leave a "paper trail" for recount purposes. Blackwell was found in April 2006, to own 83 shares of Diebold stock, down from 178 shares purchased in January 2005, which he attributed to an unidentified financial manager at Credit Suisse First Boston who had violated his instructions to avoid potential conflict of interest, without his knowledge.[31] When Cuyahoga county's primary was held on May 2, 2006, officials ordered the hand-counting of more than 18,000 paper ballots after Diebold's new optical scan machines produced inconsistent tabulations, leaving several local races in limbo for days and eventually resulting in a reversal of the outcome of one race for state representative. Blackwell ordered an investigation by the Cuyahoga County Board of Elections; Ohio Democrats demanded that Blackwell, who was also the Republican gubernatorial candidate in 2006, recuse himself from the investigation due to conflicts of interest, but Blackwell did not do so.[32]

The Republican head of the Franklin County Board of Elections, Matt Damschroder, said a Diebold contractor came to him and bragged of a $50,000 check he had written to Blackwell’s "political interests."[33]

State finance records indicate Kenneth Blackwell has received a total of $40,000 in funds during his 2006 gubernatorial race from Diebold's only two registered lobbyists, Jonathan Hughes and Mitch Given and their wives. The donations were coordinated with the two pairs occurring on the same dates.[citation needed]

[edit] See also

[edit] References

  1. ^ a b Diebold Inc financial statements at morningstar.com
  2. ^ Diebold Annual report 2005, p. 19
  3. ^ Diebold Annual report 2005, p. 19
  4. ^ Diebold Election Systems, Inc. (August 16, 2007). "Diebold Election Systems to Become Premier Election Solutions". Press release. Retrieved on 2007-08-16.
  5. ^ Diebold Election Systems, Inc. (November 3, 2006). "Point-by-point Response to HBO Documentary". Press release. Retrieved on 2007-03-30.
  6. ^ Rage against the machine: Diebold struggles to bounce back from the controversy surrounding its voting machines (Fortune, 3. November 2006)
  7. ^ Kimball Brace (2004). "Overview of Voting Equipment Usage in United States, Direct Recording Electronic (DRE) Voting". . Election Data Services Retrieved on 2006-05-11.
  8. ^ http://www.blackboxvoting.org/bbv_chapter-8.pdf
  9. ^ Con Job at Diebold Subsidiary
  10. ^ The Raw Story | Diebold CEO resigns after reports of fraud litigation, internal woes
  11. ^ Analysis of an Electronic Voting System
  12. ^ [1][dead link]
  13. ^ Trusted Agent Report Diebold AccuVote-TS Voting System, RABA Innovative Solution Cell (RiSC)
  14. ^ Tests in Leon County, Florida, Demonstrate Ease of Vote Count Hacking
  15. ^ Experts see new Diebold flaw: They call it worst security glitch to date in state's voting machines and a 'big deal' TMCnet.com, May 12, 2006
  16. ^ New Fears of Security Risks in Electronic Voting Systems New York Times, May 12, 2006. Also see Security Focus in depth four page report.
  17. ^ The Open Voting Foundation press release 31 July 2006
  18. ^ Security Assessment of the Diebold Optical Scan Voting Terminal (UConn VoTeR Center and Department of Computer Science and Engineering, University of Connecticut, October 30. 2006)
  19. ^ Diebold shows how to make your own voting machine key.
  20. ^ Ohio Elections Official Calls Machines Flawed
  21. ^ Diebold to Settle with California
  22. ^ Top-To-Bottom Review. California Secretary of State (2007-08-03). Retrieved on 2007-08-10.
  23. ^ Numerous media outlets publish misleading attacks on decision to limit electronic voting. Media Matters for America (2007-08-09). Retrieved on 2007-08-10.
  24. ^ "Kucinich Calls for Suspension of Electronic Voting", Common Dreams, April 23, 2004.
  25. ^ Diebold Election Systems, "Election Support Guide", Revision 1.0 (October 21, 2002), p. 10.
  26. ^ On November 20, 2006, Heller pled guilty to one felony count of unauthorized access to a computer and was sentenced to probation.Whistle-Blower or Thief in Diebold Case? Stephen Heller's alleged theft of papers about the firm's electronic voting machines spurs praise and scorn as he faces felony charges. Los Angeles Times Mar 18, 2006
  27. ^ E-vote case puts actor in limelight
  28. ^ Diebold Whistleblower Strikes Plea Deal on Felony Charges
  29. ^ Los Angeles County District Attorney's Office statement regarding Stephen Heller's plea bargain
  30. ^ US-CERT Cyber Security Bulletin SB04-252 Summary of Security Items from September 1 through September 7, 2004
  31. ^ Blackwell reports embarrassing buy of Diebold stock Rivals pounce on controversy over accidental share purchase Cleveland Plain Dealer, April 4, 2006
  32. ^ Democrats want Blackwell to remove himself from election probe Canton Repository, May 9, 2006
  33. ^ Vendor’s donation questioned Columbus Dispatch, July 16, 2005

[edit] Further reading

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