Two Companies’ False Statements – Should Both Be Of Concern?

Company #1 keeps some of us warm: Breaks the law and hides information from consumers.

Company #2 is the state’s sole source for maintaining our democracy: Previously under SEC and DOJ investigation, now admits hiding financial woes.

This is the second time in recent months that utilities have been caught red handed and the second time we note the irony in voting systems suppliers getting a pass.

#1 Connecticut Natural Gas

The Hartford Courant has been covering the story of improper billing by CNG, now getting scrutiny from the Attorney General and the DPUC. <read>

Under increasing public pressure and a looming public investigation, Connecticut Natural Gas officials admitted Monday that they had sent fabricated bills to 2,600 customers in 13 central Connecticut towns.

In a written report to state public utility regulators, CNG officials also admitted that they have known about the problem — caused by three meter readers making up low readings in October and November — since mid-January…

CNG said in the cover letter accompanying its five-page filing that it notified the DPUC on Feb. 1 about the problem — the day after I called the company to tell them I was writing a column.

State regulators, however, failed to disclose that conversation to me, or the public. CNG said in its cover letter it was simply told to file a written report…

“There needs to be a dramatic lesson” taught, Blumenthal said. He said CNG’s letter smacks of “Oops, you caught us and now we will follow the law. That is business as usual.”

“This is one of the more astonishing aspects of this [CNG] communication,” said state Attorney General Richard Blumenthal, adding that someone should investigate “what the DPUC knew, when it knew it and what it did about it.”

#2 Diebold Premier

Brad Blog has the latest installment on Diebold Election Systems Premier Election Solutions woes. The company we have contracted for our voting systems, already under investigation by the SEC and DOJ, now admits to overstating revenue by a mere 300% – to lay off 800 employees. <read>

  • What will happen to our election systems if Premier cannot support them or goes bankurpt, and cannot support LHS in meeting Diebold’s obligations?
  • Can we expect memory card quality control to increase as Premier sheds employees?
  • Is it possible that Premier is in breech of paragraph 2.3 of its contract, as suggested by one advocate at last night’s GAE public hearing in Norwich?
  • Should the CT DAS undertake its own audit of Premier under the provisions of paragraph 7 of the contract.
  • Should our constitutional officers in Connecticut be concerned?
[Premier/Diebold] admitted last week that they had over-estimated revenues of their election system division by more than 300%.As well, the company announced they will soon be laying off 5% of their full-time global workforce. The restatement of revenues comes as part of a deal worked out with the SEC, which continues its ongoing investigation into the financial practices of the once-great, now-disgraced company. Diebold also acknowledges that they are still being investigated by the DOJ, although the reasons and details of that particular investigation remain undisclosed at this time…

The 50% decrease in the company’s share price began just after a number of company executives sold off several thousand shares of stock, all on the same day in August of last year…

According to the statement, the earlier 2007 estimate for revenue from their election division was $185 to $215 million. The newly revised estimate for 2007 election business is just $61 million, revealing their original numbers were inflated by 300-350%.

The admission also reveals that estimated election system revenue for the company is down some 69% from 2006.


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