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Diebold Unplugged...Page 3 Rick Gagliano | 12/19/05
As the week progressed, this story, devastating to Diebold and confirming the desperate - and largely ignored by the mainstream press - pleas of fair election advocates for an investigation into the 2004 results in Ohio and elsewhere - that the election had been stolen by Bush operatives with Diebold leading the way - began to make its way into major newspapers and onto web sites.
Ion Sancho, the Supervisor of Elections for Leon County, upon seeing the hack test results first hand, said he would never use Diebold voting machines in an election again and would seek funds from the state to replace the Diebold systems in the county.
Diebold responded to the Black Box Voting hack test, saying through their spokesman, David Bear, that the tests were "unrealistic because they bypassed normal security procedures."
On Wednesday (Dec. 14), Ivan Feinseth, chief analyst of Matrix USA in New York City, reaffirmed his "sell" rating on Diebold, which he had maintained since November 2004.
According to the AP, Feinseth said, "All the things that are messed up don't get unmessed up because you have a new CEO."
It was also on Wednesday that news of a second class action lawsuit was filed against Diebold, by the firm of Stull, Stull & Brody. The suit made the same allegations as the first class action, saying that stockholders during the "class period" of October 22, 2003 and September 21, 2005, were eligible to participate in the action to seek relief for damages caused by the company. This new lawsuit reiterated the charges of insider trading by company officials, including former CEO O'Dell, newly-appointed CEO Swidarsky and the other named defendants.
By the end of the day on Wednesday, Diebold shares began to succumb to the onslaught of negative news, losing 76 cents to close at 38.98.
On Thursday, Diebold's spin machine went into motion, issuing a pair of press releases promoting new product development and the combination of several divisions which would focus on supply chain management. In the typical style of denial, Diebold executives ignored the controversy swirling about the company and instead put on their bravest face as though nothing in the world was wrong.
But in the real world, news was spinning out of the company's control. USA Today went public with a story detailing the hack test in Leon County, Florida, under the headline, "County says electronic voting machines can be hacked" in which Diebold, through it's senior legal counsel, Michael Lindroos, called the test "a very foolish and irresponsible act" that may have violated licensing agreements.
It would not be the first and probably not the last time Diebold would attempt to deflect blame for flaws in their own products, attempting to shift blame to the user instead of the manufacturer. Lindroos' statement was clearly nothing more than a threat, aimed directly at Sancho, Black Box Voting, and the scores of county elections officials who hold similar reservations about the security of electronic voting equipment.
The company statement was intended to scare off criticism, to keep users of Diebold voting equipment to toe the line, keep their mouths shut and accept the company's word that their voting machines were secure and could not be compromised.
Newspapers and TV stations in Ohio cities of Akron, Cincinnati, Cleveland, Dayton and Columbus carried news of the Florida hack test and similar information was being published in newspapers in North Carolina - where state election officials are being sued by the Electronic Frontier Foundation for violating their own laws in certifying equipment from Diebold, ES & S, and Sequoia Voting Systems without having obtained the system code - and in California, where a critical security test on Diebold equipment continues to face delays and controversy. All states must decide on voting equipment suppliers prior to December 31 of this year in order to qualify for grants made available by the 2002 federal Help America Vote Act (HAVA).
Despite news flowing through the mainstream media, investors were not seeing or hearing much of it as shares of Diebold actually gained a few cents on Thursday to close at 39.07, but Friday would provide more evidence that the integrity of the entire company was at stake.
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