Secretary of the State’s Letter To Senator Schumer RE: Premier, ES&S

Secretary of the State, Susan Bysiewicz and Deputy Secretary Lesley Mara have sent the following letter to Senator Schumer relative to the Premier acquisition by ES&S.

October 26, 2009

The Honorable Charles Schumer
Chairman
Committee on Rules and Administration
United States Senate
Washington, D.C. 20510

RE:  Sale of Diebold’s voting machine business, Premier Election Solutions, Inc. to Election Systems & Software Inc.

Dear Senator Schumer:

Thank you for the opportunity to share our concerns with you and the Committee regarding the sale of Premier Election Solutions, Inc. (“Premier”) to Election Systems and Software, Inc. (“ES&S”).  We greatly appreciate your leadership in this important area and your recognition that this country’s election systems must be rigorously safeguarded.

We are concerned that this transaction will unduly stifle competition across the country and for Connecticut in a number of significant ways.  First, for those states looking for new machines, there will be fewer vendors from which to choose, potentially driving up the cost of purchasing new machines and giving the states less leverage in demanding high standards of quality, especially with respect to transparency and security issues.

Second, once machines are purchased, this transaction can negatively affect the quality of ongoing service contracts with the states, contracts that include ongoing preventive maintenance of the machines and other services.  Since ES&S offers a product that competes with the Premier product purchased by Connecticut, it seems unlikely that ES&S will dedicate sufficient resources and development energies to the extent necessary to support two distinct products.  It seems much more likely that ES&S will devote the majority of its resources to its own present product line to the detriment of those customer states across the country that currently use the Premier product.

Finally, as ES&S positions itself to dominate the voting machine sales and service industry, it also assumes unfair control of the pace and quality of innovation down the road.  In short, if ES&S is “the only game in town,” then the lack of outside competition  may also impact future product innovation in this industry.

By way of background, the State of Connecticut entered into a contract with Diebold (now Premier) in June, 2006 for the acquisition of optical scan voting machines to replace the state’s lever voting machines.  That contract included the purchase of equipment and accessories, training, on-site support during the first use of the equipment, programming of memory cards and ongoing maintenance.  Our contract expires on December 31, 2026.

We conducted our first statewide use of the new equipment in November, 2007 and completed the largest single use of the new voting machines during the historic Presidential election last November.  While that portion of the contract relating to the purchase and delivery of the equipment has been implemented, we have a strong interest in maintaining quality, ongoing service and maintenance of the product we have purchased for the seventeen (17) years that remain on our contract.

One provision in Connecticut’s contract with Premier requires Premier: (1) to address security vulnerabilities identified in a report by the University of California at Berkeley specifically entitled: “Security Analysis of the Diebold AccuBasic Interpreter,”and (2) to provide Connecticut with any upgrade(s) addressing those vulnerabilities at no additional cost.  Those upgrades were supposed to have been provided within one year and that deadline has now passed.  Although Premier has received EAC certification for a new version of its product that it may claim addresses the issues contained in the subject report, the upgrades have not been offered to Connecticut for review.  Now that ES&S has acquired Premier, we are concerned that ES&S may not dedicate the technical and other resources necessary to fulfill this provision in a timely way.

At the same time we chose optical scan voting machines in 2006, we also entered into a contract with IVS, LLC to provide one accessible voting machine at each polling place in the state.  The “Vote-By-Phone” system uses a special telephone at each polling place to allow voters to cast their ballots.  We specifically entered into a year-to-year arrangement for this product because it was, and remains, our goal to find a more permanent solution.  Ultimately, we want a ballot that can be fed into the optical scan voting machine – the vote-by-phone ballots look different and must be hand counted separately.  While the vote-by-phone system is especially helpful for persons who are sight-impaired or blind, we hope that a future technology can accommodate even more disabilities, including providing sip-and-puff options, foot pedals and other features to expand the usefulness and accessibility of the machines.

In anticipating a future Request for Proposal for accessible voting machines, both ES&S and Premier have traditionally offered ballot marking devices that might meet the state’s business requirements.  It was also our understanding that Premier was conducting its own research and technical development to offer a new product that might be even more attractive to customers.  With the acquisition of Premier by ES&S, one vendor is lost to this process and it seems likely that Premier’s innovation and research into any new product will be lost as well.  This transaction will result in fewer vendors participating in the RFP process in Connecticut, with the attendant consequence that the state will have less leverage in negotiating for the best possible price.  Further, as previously mentioned, this dynamic may stifle the innovation that could lead to more efficient machines.

Thank you again for conducting a thorough review of this transaction and its impact on election systems across the country.  It is imperative that competition be maintained to provide optimal opportunities for states to purchase voting machines that are cost-effective and machines that ensure transparency, auditability, security and accuracy.  A more concentrated voting machine industry jeopardizes such competition and places states at a disadvantage in fulfilling their responsibilities to the voters they serve.

Please do not hesitate to contact this office if we can be of further assistance.

Sincerely,

Susan Bysiewicz
Secretary of the State

Lesley D. Mara
Deputy Secretary of the State

Earlier coverage of the acquisition <here> <here>

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