News

With e-voting, Diebold treads where IBM wouldn't

June 13, 2004

OAKLAND, Calif.--History can be an important lesson when it comes to computerized voting, according to a story in the Oakland Tribune.

Back in 1969 IBM took a chance on a new computerized voting venture and a mere four years later they had little income and suggestions that the firm's otherwise reputable computers couldn't count, were unreliable or being manipulated secretly for political purposes.

California was the place that battered IBMs reputation and Big Blue got out of the voting business and never looked back. While history has proved the accusations wrong, IBM's image was too valuable to risk on e-voting again.

"Even though it was my job, I agreed: For IBM, this was not the place to be," said Robert P. Varni, former western regional sales manager for IBM's Votomatics. "The business was too risky for their reputation to continue."

The same scenario is playing out for Diebold Inc. except their turn for the worse has been even faster. But Diebold is staying in the elections business because, analysts say, the market and the potential profits are vastly more alluring than the market IBM faced in the late 1960s.

By 2006, Diebold executives estimate their voting subsidiary will control 48 percent of the U.S. elections market, its products touching voters at every step from registration to vote tabulation. Getting there could be an uphill battle.

In the last 11 months, Diebold lost control of its proprietary voting software and the secret that it contained the same password -- "111" -- and encryption keys that allow administrator-level access to tens of thousands of touch screens nationwide.

"We stepped out in the open here, and we've taken a lot of incoming (criticism)," Diebold CEO Walden O'Dell told investors recently. "But let me tell you, we're doing the right thing, we're working hard to do the right thing. And when the rhetoric comes down and the country decides to continue moving forward after the November election, I'm sure that Diebold will play a very, very important and a very, very successful role in helping America vote securely and accurately."

To throw fuel on the fire, the U.S. Election Assistance Commission is about to release $2.3 billion to states for purchasing new voting systems.

The money is the largest chunk yet of $3.9 billion from the 2002 Help American Vote Act, or HAVA, and about $1.5 billion is solely for vote-tabulation systems such as Diebold's.

By January 2007, HAVA requires at least one handicapped-accessible voting machine, such as the touchscreens that Diebold makes, in all of the hundreds of thousands of U.S. polling places.

Regardless of Diebold's future, a host of competitors -- from voting-systems giant Election Systems & Software and Oakland-based Sequoia Voting Systems to a dozen smaller e-voting firms -- face a market reshaped by Diebold's experience.

And the debate over printed backup copies of electronic ballots, used to check and verify if choices were recorded accurately, will continue, with or without Diebold.

"These types of questions are going to remain," said Rishi Sood, a principal analyst at Gartner, a technology research firm. "All of these issues about paper trail and security apply to all of them. And the mind-set of the vendors is starting to change."