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Strategies & Market Trends : Voting Machine Companies -- Ignore unavailable to you. Want to Upgrade?

To: NotNeiderhoffer who wrote (30)11/17/2000 9:48:16 AM
From: levy  Read Replies (1) | Respond to of 69
NotN since everyone has been jerking around I
I am trying to provide straight answers for people...I believe Gore has won it.
Message 14828865

Doyouknowfromwhatstatetheterm"dryhump"camefrom? is the article about their voting machines from WSJ...I imagine this may be why their stock is going up right now.


A Brazilian Firm Sees Dollar Signs
Amid America's Electoral Chaos


SAO PAULO, Brazil -- The world may see farce in America's
presidential impasse, but the company that brought computerized voting to
the inner recesses of Brazil's Amazon sees historic opportunity. And it is
rushing to cash in.

When Joao Abud Jr. awoke Wednesday in Sao Paulo to news of political
confusion in the U.S., dollar signs danced on his television screen. "We
have the solution," says the marketing and sales director for Procomp
Industria Eletronica, which developed cheap, simple and secure electronic
voting machines used by about 100 million Brazilians in October local
elections. "My thoughts were commercial: How can I sell this terminal to
the U.S. authorities?"

Two days later, Mr. Abud hurriedly was printing promotional material in
English about his product, called the UE2000. Diebold Inc., which
bought Procomp last year, had just called to say, "Take the first plane to
Miami with the voting terminal in your hands!" Monday, Mr. Abud will
show off the prized machine smack in the eye of America's political

For Diebold, based in North Canton, Ohio, the $225 million purchase of
Procomp gave the U.S.'s biggest automated-teller-machine provider
control of Brazil's ATM market leader. But elections soon offered a new
strategic outlet: Procomp's $106 million contract to supply 186,000 voting
machines in Brazil was the largest order in Diebold's history.

Then came Florida. "There's been a tremendous increase in interest and
contacts asking us to talk about this technology," says Michael Hillock,
Diebold's senior vice president for international sales. "We're looking at
where we think we could move this product."

Perhaps more remarkable is how Brazil, which restored democracy in
1985 after two decades of military rule, quickly has become a model for
electoral probity. President Fernando Henrique Cardoso took a dig at the
U.S. on Saturday, saying that "the example of the most powerful neighbor
shows that not even there were they able to count the votes as quickly as

There have been bumps along the way. After Brazil's dictatorship ended,
the first popularly elected president won through dirty tricks and resigned
on the eve of impeachment for alleged corruption. Even in October's polls,
many ballots hosted candidates with dubious pasts. The weekly magazine
Veja reported that nearly 10% of those running for mayor and city
councilor in the nine largest state capitals were under investigation for
crimes ranging from tax evasion to murder.

But thanks largely to Procomp's electronic voting machines, no one is
questioning the integrity of the vote count. Brazil began introducing
electronic voting in 1996, but this year was the first fully automated
nationwide election. The dimensions are staggering: With an area bigger
than the continental U.S., many of the 326,000 polling stations in regions
lacking reliable electricity and one-fifth of the voters illiterate, Brazil poses
the greatest challenge to a fair election of any country outside of India.

Procomp used technology to simplify the process, just as it had adapted its
traditional products to the needs of Brazil's banking market. Procomp's
electronic ballot box, which is the size of a toaster-oven and weighs 17
pounds, has a numeric keypad and a small liquid-crystal display monitor.
Voters tap in the designated number of their preferred candidate,
producing the candidate's digitalized photograph on the screen. Then they
press a green button to confirm the vote or an orange button to correct
their vote. A white button lets them abstain. (Voting is required by
Brazilian law.)

People can't vote twice because their registration numbers are recorded
electronically, just as an ATM might prevent a customer from withdrawing
too much money in a single day. It is almost impossible to tamper with the
results, which are stored on an encrypted floppy disk. Even Procomp
doesn't have access to the encryption code.

The terminal operates on a Pentium-equivalent microprocessor, but
Procomp stripped down the peripherals to reduce cost and energy
consumption. It can run for at least 12 hours on a rechargeable battery --
a crucial consideration for polling outposts in the Amazon.

Procomp received a rousing reception on election night in Brasilia, where
the U.S. Embassy borrowed four terminals for a simulated presidential
election. Noting that foreign diplomats "had no difficulty using them," a
local newspaper published a photograph of Ambassador Anthony
Harrington in front of the voting machine, arms extended with two thumbs

For the record, Gore won the instantly tabulated mock vote: 139-53.

To: NotNeiderhoffer who wrote (30)11/19/2000 7:07:05 PM
From: levy  Read Replies (1) | Respond to of 69
Presidential Race Brings Attention
To the Business of Voting Machines


Get ready for another post-election scramble -- this time by officials searching for more accurate vote counts and voting-machine vendors looking for new business.

Around the country, local election officials are talking about scrapping old systems and switching to new, more accurate ways of tallying the vote. In Georgia this week, Fulton County's elections chief announced that she was trading in punch-card ballots -- similar to those used in the dispute over presidential voting in Palm Beach, Fla. -- for an optical-scan system.

Though local governments are notoriously pinched for money, help might be on the way. This week, Sen. Charles Schumer, a New York Democrat, proposed legislation that would call for the Federal Elections Commission to establish guidelines for modernizing elections and make $250 million available to state and local governments to buy new equipment. Lawmakers in individual states also have talked about providing more money to municipalities.
See a table illustrating the different types of voting machines

Punch-card voting, however, isn't likely to get their support. Even though it was the most widely used voting method in 1998, it already was seen as a shrinking business. Larger companies have focused more on selling optical-scan systems over the past decade and left the punch-card business to smaller competitors.

Optical-scan systems, which require voters to fill in an oval or connect an arrow with a pen, have replaced many punch-card systems, although primarily in smaller jurisdictions. The other fast-growing alternative is electronic-voting machines, which automatically record a voter's selection from the touch of a button. Electronic units usually resemble an automatic-teller machine or employ a touch screen.

Jim Ries Jr., president of MicroVote Corp., Indianapolis, says his electronic-voting machines cost about $4,000. The overall system cost can be double that of an optical-scan system because multiple machines are needed in every precinct. Mr. Ries tells municipalities they can usually recoup that difference within five to 10 years and eventually save money through lower ballot-printing costs.

Internet voting or voting by mail are possibilities but appear doubtful for widespread use in the near term.

Some elections officials aren't confident that optical scans are any better than using punch cards. Both allow overvoting, or voting for two candidates in the same race, which can cancel out the vote.

And optical-scan systems have run into high-profile problems. In Hawaii two years ago, Election Systems & Software Inc., Omaha, Neb., had to pay for a statewide recount in the governor's race because six optical-scanning machines failed to read ballots. The company says it was one of the first elections for a new model and the problem was fixed.

In Georgia, Secretary of State Cathy Cox is pushing for a uniform electronic-voting system. Her office began contacting voting-machine vendors last week to develop a budget request for next year. She envisions a pilot project by 2002 in about 25 counties and possibly a statewide rollout in time for the next presidential election.

"We feel this type of electronic equipment is superior to all other systems out there," says Ms. Cox, adding, "No doubt it will be a multimillion-dollar expense to switch over. But do people want to bite the bullet to have an accurate system?"

Industry officials agree that both punch cards and optical-scanning offer about the same degree of accuracy. "Our margin of error is far less than 1%," says Todd Urosevich, vice president of customer services at Election Systems & Software, one of the big three voting-machine vendors.

Bill Kimberling, deputy director of the FEC's election administration office, warns that better, smarter technology may never eliminate one of the top variables in an election count's execution: human error. Despite all the talk of "hanging chads," in the Florida vote, key errors in Volusia and Palm Beach counties -- that resulted in more than 900 ballots being overlooked in the first returns -- were the result of an elections worker improperly operating a vote-counting machine.

"The day we get voting equipment that operates perfectly and without error is the same day we get a car that never gets into an accident," says Mr. Kimberling.

Industry players who could benefit:

* Election Systems & Software. The company was formed from the 1997 merger of American Information Systems Inc., Omaha, Neb., and Business Records Corp., Dallas. ES&S works with about 2,000 counties and sells both optical scanning and electronic systems.

* Global Election Systems Inc., a Vancouver, British Columbia, company traded on the Toronto Stock Exchange. The company's stock hit a 52-week high of C$2.65 (US$1.71) on Monday on optimism that the presidential recount will lead to more business.

* Sequoia Pacific Voting Equipment Inc., Jamestown, N.Y., a subsidiary of Jefferson Smurfit Group PLC, a paper-products company based in Ireland. Riverside County in California had the first large countywide election using electronic touchscreen voting last week -- a $14 million system purchased from Sequoia.

Losing out may be smaller companies invested in punch cards. Paul Nolte, president of Election Resources Corp., Little Rock, Ark., an eight-employee company which primarily sells punch-card systems -- including the one used in Palm Beach County -- says he will focus now on developing an Intranet voting system that avoids security problems related to the Internet.

"I expect this current situation will cost us a number of good-sized counties in the next two years," he says.

Write to Chad Terhune at and Joni James at