7-20-2005: Internal documents reveal ...

Author Message   admin Board Administrator Username: admin Post Number: 850 Registered: 12-2004 Best of Black Box?  Votes: 2 (A keeper?) Posted on Tuesday, July 19, 2005 - 8:24 pm:        Financial documents found by Black Box Voting investigator Kathleen Wynne reveal questionable payments, and show that some items may have been untruthfully reported to government authorities. A document, first published online by Black Box Voting in July 2004, exposes large payments to entities investigated for unusual payments to political figures. Black Box Voting has identified a $144,000 payable to “Lottery Services of Georgia,” which was one of 16 companies found to have received "pass-through" payments from GTECH in a 1995 probe (1), and payments to a participant in ACG Group, LLC, run by Juan Andrade and Pasquale “Pat” Gallina. Gallina allegedly funneled $10,000 to the Franklin County Republican Party by way of the local elections director, and reportedly bragged of giving $50,000 to political interests associated with Ohio Secretary of State Kenneth Blackwell (2). accounts payable document Permission granted to reprint, with link to this site. Please forward to your lists, to online blogs and to the media. NEW DOCUMENTS FROM DIEBOLD ELECTION SYSTEMS HAVE A “STINK” TO THEM JULY 20, 2005: One late night in Texas, 51-year-old Kathleen Wynne did something she never thought she would consider: She jumped into a dumpster. An ordinary citizen who had become concerned about the integrity of Diebold voting machines, Wynne was amazed to find hundreds of pages of documents in the trash. Among them: internal notes and memos, planning information, problems with equipment and customers, price bid worksheets, staff bonuses, and financial statements from Diebold Election Systems. It was early July, just after second quarter financials, and the Diebold elections division seemed to be cleaning house. Wynne was a citizen volunteer then – she is now a full-time investigator for Black Box Voting, a nonprofit, nonpartisan 501c(3) consumer protection group for elections. Diebold, a company that boasts of its security, had made no attempt to shred the documents, or protect them in any way. Instead, the company was in the habit of discarding its internal records in various publicly available locations -- an apparent violation of the management requirements of the Sarbanes-Oxley Act. The first batch of documents is posted here: http://www.bbvforums.org/forums/messages/2197/4466.html (We’ll come back to the document stash in a minute.) DIEBOLD DENIES INVOLVEMENT IN GALLINA MONEY In May, Black Box Voting broke the story of ACG Group, LLC, which has been funneling money from Diebold into the pockets of . . . someone. The ‘G’ in ACG stands for Gallina – Pasquale “Pat” Gallina. According to the Columbus Dispatch, Gallina was caught giving $10,000 to the Franklin County Republican Party, handed off through the Franklin County Director of Elections. The Dispatch also contains a report of a $50,000 donation by Gallina to Ohio Secretary of State Ken Blackwell’s political interests. Diebold, according to the Akron Beacon Journal, denies any involvement in the donations by Gallina, pointing to “Celebrezze & Associates” and vowing to fire that organization (set up by Anthony Celebrezze, now deceased) if it is proved to have “provided the check in the name of Diebold.” Excerpts from the above news articles can be found in posts following this article. Let us now dissect the spin: 1. The money was flowing through ACG Group LLC. A few dollars may also have wandered into Gallina’s pocket through “Celebrezze & Associates,” but the large, UNDISCLOSED cash was flowing through ACG Group LLC, an entity Diebold has not uttered a word about. ---------------------------------------------- CORRECTION: It turns out that Diebold did utter a word, to an excellent investigative reporter, Julie Carr-Smythe, of the Plain Dealer: The check Gallina wrote to the group came through Celebrezze & Associates Inc., a company Gallina formed with former Ohio Attorney General Tony Celebrezze, a Democrat, in 2002. Celebrezze died in July 2003. The check to the Franklin County GOP was written from the account of ACG Group LLC, another joint venture of Gallina and Celebrezze. A Diebold spokesman said Friday that the company had no involvement in either contribution. ------------------------------------------------- 2. Who in their right mind would write a check “in the name of DIEBOLD?” According to the Dispatch story, Gallina showed up at the Franklin County elections office with a check in hand and said "I'm here to give you $10,000. Who do I make it payable to?” Gallina claims the money was his own. However, another principal of ACG Group LLC is Juan Andrade (the ‘A’ in ACG). Andrade told Black Box Voting on videotape that Diebold money is paid to him directly, and Diebold money also goes through ACG Group, for purposes that are largely for “persuasion.” (click the VIDEO camera picture at Black Box Voting (.ORG) and select “Cook County Money Trail” to clips of Andrade talking about Diebold and ACG Group) More details of Andrade and Gallina and Ohio money dealings can be found here: http://www.bbvforums.org/forums/messages/1954/7638.html 99 PAGES OF NEW DOCUMENTS REVEAL MORE PROBLEMS Diebold financial documents found by Black Box Voting investigator Kathleen Wynne reveal questionable payments, and show that some items may have been untruthfully reported to government authorities. A document, first published online by Black Box Voting in July 2004, exposes large payments to entities investigated for unusual payments to political figures. Black Box Voting has identified a $144,000 payable to “Lottery Services of Georgia,” which was one of 16 companies found to have received "pass-through" payments from GTECH in a 1995 probe. The same document, and others, show $20,000 per month payments to Andrade, Gallina’s partner in the Diebold-funded ACG Group. Accounts payable document: http://www.bbvdocs.org/diebold/accts-payable1.pdf Documents also show payments to California lobbying firm Rose & Kindel, whose executive recently popped up with an appointment in new California Secretary of State Bruce McPherson’s administration. The payment, over $45,000, does not match the amount reported by Diebold for the same period (around $7,000). http://www.bbvdocs.org/moneytrail/rose-kindel-pymts.pdf (copies of Diebold disclosures to California can be found here): http://www.bbvforums.org/forums/messages/1954/4447.html In another document, an executive memo, Diebold execs admit to a culture of ethics problems, and you can sense the gnashing of teeth as they describe trying to explain to the Diebold audit committee about the lying and obfuscating that California Secretary of State Kevin Shelley's administration caught them in. The memo states that this cost the company dearly, resulting in a $3 million loss for the year. http://www.bbvdocs.org/diebold/confidential-exec-memo1.pdf A document from Coconino County, Arizona describes refusal to pay Diebold’s bill due to quality problems with the machines. http://www.bbvdocs.org/diebold/coconino.pdf A hand-written note asks why voting machines originally sold to Canada were re-sold as “new,” tracing serial numbers to Mendocino County and LHS (a company that services Diebold accounts in New England.) http://www.bbvdocs.org/diebold/mendocino-sold-used.pdf Note that another voting organization, http://www.countthevote.org, has unearthed other devastating documents revealing specific failures in Georgia in 2002. Additional information about problems with Georgia’s Diebold touch-screens, and links to The Count the Vote documents, can be found here: http://www.bbvforums.org/forums/messages/1954/7646.html The GEMS central tabulator program has been pummeled by computer programmers for its flawed, hack-friendly design. Documents found by Black Box Voting show flabbergasting pricing for GEMS. (Click here to see $325,000 price quote for GEMS on the bid worksheet for Sacramento County, California): http://www.bbvdocs.org/diebold/sacramento-estimates.pdf For a company that sells its voting system to unions (especially the International Brotherhood of Electrical Workers), both security flaws and union-bashing tactics should give union members a moment of pause. Latest security failures outlined in this one-sheet: http://www.bbvdocs.org/general/BBVreport-1sheet.pdf Union-squashing tactics shown in this planning sheet: http://www.bbvdocs.org/diebold/union-busting1.pdf. (See page 3, plans to “research Teamsters Local 38 as to finances, misconduct etc). Additional documents, and analysis of the current ones, will appear here throughout this week. Folks, it is YOUR tax dollars that pays for these shenanigans. Diebold recently achieved statewide touch-screen sales for Mississippi, Utah and Ohio. We may not win this battle by being “polite” and “working within the system.” The system has been broken for some years now. We need to rekindle our confidence as Americans – Kathleen Wynne, an ordinary citizen, has shown that simple actions can have lasting repercussions. It sometimes seems that we have an inferiority complex – instead of believing in our own innate good judgement, we continue to “leave it up to the experts.” It is the experts who got us into this mess. It is the experts who certified Diebold and the other machines (see http://www.blackboxvoting.org.BBVreport for a devastating technical report showing just how flawed these systems are.) It is the “experts” who gave us the Help America Vote Act (HAVA). With this kind of help, maybe we need to go back to basics. To participate in discussions of your local elections, and these issues, make friends with the “FORUMS” tab on our home page: http://www.blackboxvoting.org. Let us hear from you. Together, let’s fight this beast. * * * * (1) Atlanta Journal-Constitution; 11 January 1995 "Democratic chief got payment from firm with GTECH ties" (2) Columbus Dispatch: 16 July 2005, "VENDOR'S DONATION QUESTIONED; Diebold rep gave $10,000 to county GOP" ...to be continued shortly (we are adding to this article throughout the day on July 20, to provide analysis of the 99 pages we are initially releasing.) Note: If you experience problems loading these documents, first try clicking them again, because we adjusted the links. If that doesn't work, go here: http://www.adobe.com/products/acrobat/readstep2.html and do a free update on your Adobe Acrobat reader.   admin Board Administrator Username: admin Post Number: 852 Registered: 12-2004 Best of Black Box?  Votes: 2 (A keeper?) Posted on Wednesday, July 20, 2005 - 7:00 am:        FOOTNOTES: (1) Democratic chief got payment from firm with GTECH ties Richard Whitt STAFF WRITER 498 words 11 January 1995 Atlanta Constitution C/5 English (Copyright 1995 The Atlanta Journal-Constitution) Bowling Green, Ky. - A Kentucky shell company that received $71,000 in brokerage fees from lottery giant GTECH Corp. paid Georgia Democratic Party Chairman Edgar Sims Jr. $22,500 in 1993, according to testimony in U.S. District Court here Tuesday. Bluegrass Industrial Distributors, which is owned by Sims' friend, Kentucky businessman L. Rogers Wells, did nothing to earn the brokerage fees, according to testimony. Wells, a former Kentucky state finance secretary, and J. David Smith, who resigned as GTECH's national sales manager last year, are on trial on fraud and conspiracy charges in a scheme to defraud GTECH, which operates most state lotteries, including Georgia's, of $31,588. It was not clear from testimony why Bluegrass paid Sims the money, and there was no indication the payment was improper. A company ledger, introduced as evidence, lists Sims' name and the word "attorney." Sims could not be reached Tuesday night, but Phil Bradley, a partner in his law firm, confirmed Sims had received a payment from Bluegrass and had talked to the FBI about it. "It would be inappropriate to comment on the services provided to a client," Bradley said. Goodwill gesture detailed Bluegrass is one of at least 16 companies in eight states that routinely receive "pass-through" payments from GTECH without performing any work, according to lawyers and witnesses. Attorneys for Smith and Wells introduced memos and documents showing that high-level GTECH officials were aware of the payments to Bluegrass and approved of them. The company makes such payments to prominent people and companies in states where it does business as a goodwill gesture, said Wells' attorney, Frank Haddad. An Atlanta company, Lottery Services of Georgia, is one of several companies that receive pass-through payments without doing work for GTECH, Haddad said. However, an attorney for the company, Michael Dever, said the company has a contract with GTECH to service machines at retail locations in about half of the state. Dever would not comment on the ownership of the company. The chief executive officer is listed in the secretary of state's office as Lloyd T. Baccus and the secretary as Sandra Baccus, both of the same Johnson Road address in Atlanta. Most of Tuesday's testimony centered on how Bluegrass received payments from GTECH and passed the money on to Smith. Donald Owens, president of RMF Corp., of Buffalo, N.Y., which supplies ticket printing paper to GTECH, said his company routinely would add 10 percent to the invoices for payment to Bluegrass. He also said RMF makes similar "commission" payments in several other states, including Georgia. Georgia Attorney General Michael J. Bowers declined to say Tuesday whether he would investigate the matter in Georgia. "It's unsettling, and I would like to know more. But to say I would or would not launch an investigation is premature," he said.   admin Board Administrator Username: admin Post Number: 853 Registered: 12-2004 Best of Black Box? N/A Votes: 0 (A keeper?) Posted on Wednesday, July 20, 2005 - 7:04 am:        FOOTNOTES (2) A contractor who represents Diebold Election Systems arrived at the office of Franklin County Board of Elections Director Matthew Damschroder with an open checkbook on the same day the county was opening bids for voter-registration software. Pasquale "Pat'' Gallina arrived unannounced, Damschroder said. "I'm here to give you $10,000,'' the elections director recalls Gallina saying. "Who do I make it payable to?'' "Well, you're certainly not going to make it out to me,'' Damschroder says he told Gallina. "But I'm sure the Franklin County Republican Party would appreciate a donation.'' Gallina wrote the check, and Damschroder says he took it on Jan. 9, 2004. That weekend, Damschroder said, he mailed the check to the county party. Damschroder had been executive director of the party until June 2003, when he was appointed director of the elections board. Diebold, the highest of four bidders, didn't get the software contract, and Damschroder says he never recommended the company. Gallina said yesterday that the $10,000 was his money and had nothing to do with Diebold. He said he's always supported county Republican parties in areas where he lives. "I donate to Licking and to Franklin,'' he said. The check incident remained between Gallina and Damschroder until late last month when an assistant county prosecutor called Damschroder. Election Systems & Software, a company that is suing Secretary of State J. Kenneth Blackwell over the state's policies for buying electronic voting machines, wanted to talk with Damschroder about allegations that Diebold was paying to play, the prosecutor told him. Damschroder told him about the $10,000 check and had another story to tell. In May, he said, Gallina called him and bragged about a $50,000 check he had written to Blackwell's "political interests.'' "Isn't it great that Diebold and the county are going to do business?'' he says Gallina asked him. Damschroder said Gallina went on to tell him that he had met with Norm Cummings, a Blackwell campaign consultant, in Washington, D.C., to work out a deal: Diebold would cut the price of its electronic voting machines to $2,700 each if the company had a guarantee that it would receive all of the state's business. "Then Gallina tells me that he then wrote a check for $50,000 to Blackwell's political interests.'' Carlo LoParo, Blackwell's spokesman, called Damschroder's assertions "wild accusations'' and said, "You can't point me to anything that substantiates what he says.'' LoParo acknowledged that Gallina had contributed to Blackwell's campaigns since 1998 -- Blackwell received $8,000 from Gallina during that period -- but denied that any of Blackwell's campaign interests received $50,000 from Diebold or Gallina. Blackwell is running for governor. "I have no idea why he (Damschroder) would say anything like that other than that every encounter we've had with Matt Damschroder has shown a little bit about his character,'' LoParo said. Gallina would not say yesterday whether he wrote a $50,000 check to any organization associated with Blackwell. He would say only that all of his donations are public record. He would not say whether he wrote a $50,000 check to a 527 organization, which does not have to report donations, or to a political fund that has not yet been required to disclose its financial statements this year. He blamed rival election machine vendor ES&S and racism for the allegations. He is of Italian descent, and Blackwell is black. "A lot of this has been racially driven, a lot of it is vendor-driven,'' he said. In April, Blackwell announced that he had negotiated a new price for touch-screen voting machines from Diebold, which would allow the state to buy enough touch screens for counties that want them. Based on state rules requiring such systems to have paper printers, Diebold's machine would be the only choice. Damschroder has clashed with Blackwell's office since before the 2004 elections, when he criticized and sometimes defied directives he said would hinder voter registration. In the months since the election, he has questioned orders by Blackwell that first would have had counties choose paper-ballot voting systems and then would have limited their electronic-voting choices to only Diebold machines. LoParo said Blackwell appointed a team to negotiate prices with voting-machine vendors and he denied that Gallina and Cummings negotiated a deal. "We opted for a competitively bid, multivendor approach,'' LoParo said. "This process has been open and transparent, and we negotiated the best prices in the nation.'' He said the "unfortunate situation is that Matt did something he shouldn't be doing'' by taking the $10,000 contribution in his office from Gallina. Damschroder agreed that he made a mistake when he took the check. "I should have thrown Mr. Gallina out of the building,'' he said yesterday. Board of Elections Chairman William A. Anthony Jr., who's also chairman of the Franklin County Democratic Party, said the four-member elections board is considering suspending Damschroder. County Prosecutor Ron O'Brien is investigating whether Damschroder broke any laws, Anthony said, and has already recommended that the elections board fire Damschroder. The elections board meets on Monday. O'Brien declined to comment. Meanwhile, ES&S wants to depose Blackwell, Gallina, Cummings and Dana Walch, Blackwell's director of legislative affairs. ES&S sued Blackwell in May, saying it was unfairly excluded from the selection process. Blackwell ordered counties to make their selections by May 13, but only Diebold was certified to sell electronic voting machines in Ohio. ES&S said Blackwell had met secretly with officials from the North Canton company. Franklin County and 31 others joined the suit, and Blackwell agreed last month to push the deadline back to September. The change wasn't a settlement of the lawsuit, however. Ohio must use new voting machines in the 2006 elections to qualify for federal funding through a congressionally mandated upgrade. dcaruso@dispatch.com jhallett@dispatch.com rvitale@dispatch.com   admin Board Administrator Username: admin Post Number: 854 Registered: 12-2004 Best of Black Box? N/A Votes: 0 (A keeper?) Posted on Wednesday, July 20, 2005 - 7:24 am:        Follow-up stories on Gallina payments: $10,000 check not from us, Diebold says; Election official punished for passing donation along 20 July 2005 - Akron Beacon Journal (OH) Diebold Corp., the Green-based maker of electronic voting machines, is denying any involvement in a $10,000 check one of its outside consultants handed to Franklin County's elections director on a day the board was opening bids for new voter-registration software. But that check has landed the Columbus-area election director in hot water. Matthew Damschroder will lose 30 days' pay for forwarding a $10,000 check to the Republican Party from an outside consultant representing Diebold. Damschroder acknowledged last week that the consultant, Pasquale ``Pat'' Gallina of Celebrezze & Associates, came to his office and offered $10,000 in January 2004 as the board was considering which firm to award its software business. Damschroder told Gallina to make the check out to the Franklin County Republican Party as a donation. Diebold didn't get the software contract, and Damschroder said he never recommended the company. But Damschroder said he should not have taken the check. Damschroder used poor judgment when he accepted the donation and violated an agency rule against soliciting or accepting political contributions on the job, Chairman William A. Anthony Jr. said. Diebold spokesman Mike Jacobsen said Celebrezze & Associates was employed by Diebold to promote the company's touch-screen election system. He said that if the consulting firm is proved to have provided the check in the name of Diebold, it will be fired. (NOTE THAT DIEBOLD AVOIDS MENTIONING ACG GROUP, LLC, THE FIRM RUN BY GALLINA AND JUAN ANDRADE. BLACK BOX VOTING HAS A VIDEOTAPED INTERVIEW WITH ANDRADE WHERE HE STATES THAT THE MONIES FLOWING THROUGH ACG GROUP WERE USED FOR ACTIVITIES RELATED TO PERSUASION, IN CONNECTION WITH DIEBOLD. THE BANK ACCOUNT RECORDS FOR ACG GROUP WILL PROVE TO BE VERY INFORMATIVE.) Diebold announced in June 2004 -- six months after the check incident -- that company executives are forbidden to make political contributions. Jacobsen said the ban on contributions was initiated as early as October 2003 and was made clear to everyone involved with the company, including the consultants. ``The policy was not formalized, but it definitely was our approach at that time (January),'' Jacobsen said. Ohio political contribution records show only one contribution by Celebrezze & Associates for $10,000 to Citizens for Tax Repeal, an organization founded by Ohio Secretary of State J. Kenneth Blackwell. Jacobsen said Diebold employs sales personnel, but said the company uses political consultants to deal with elections officials because there are so many county and state officials to approach. Ohio has 88 counties.

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