Documents, Ammunition: Diebold stockholder suit BLACKBOX VOTING.ORG

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Two recent stories indicate that a Diebold stockholder lawsuit is

 

imminent. When a stock drops significantly and cannot rebound for approximately

 

two months, a stockholder lawsuit can result.

 

Diebold's first " hit " was in late June this year, when the company

 

admitted to mis-stating ATM sales revenues in a stockholder conference call.

 

Diebold's stock dropped again in late September upon the release of a

 

glum sales forecast based on additional problems with its ATM division.

 

http://biz./ap/050921/diebold_outlook.html?.v=10

 

An impending stockholder's lawsuit was predicted by Black Box Voting

 

on July 3, with a full blown story on this topic at BBV on Oct. 8.

 

July 3: http://www.bbvforums.org/forums/messages/1954/6804.html

 

Oct. 8: http://www.bbvforums.org/forums/messages/1954/10448.html

 

 

 

Today, Blogger Brad Friedman expanded scrutiny of potential

 

stockholder litigation.

 

http://www.bradblog.com/archives/00002126.htm#comments

 

 

 

AMMO FOR LITIGATION

 

 

 

- Due diligence failure on Global Election Systems acquisition

 

- Destruction of the Diebold brand name

 

- Persistent violations of the public trust

 

 

 

DUE DILIGENCE FAILURE

 

 

 

" We expect the U.S. voting marketplace to generate $1.5 to $2.0 billion

 

in hardware revenue during the next four to five years, " then-CEO

 

Wally O'Dell was quoted as saying in Diebold's June 25 2001 " 425 " SEC

 

filing.

 

Sec Filing: http://www.bbvdocs.org/legal/GESNacquisition6-21-1.pdf

 

 

 

O'Dell has now been shuffled out of his CEO position following a series

 

of gaffes, beginning with a letter he sent to Ohio Republicans

 

promising

 

to " deliver the election to Bush. "

 

 

 

Diebold has collected less than one-eighth of the voting system revenue

 

O'Dell projected to stockholders.

 

 

 

The SEC documents refer to embarking on a process of due diligence

 

during the Global Election Systems acquisition. This due diligence is

 

more fittingly described as doo-doo diligence. What else can you say

 

when you buy a company whose product MUST elicit trust, yet the

 

head programmer and, SEC documents reveal, the LARGEST

 

STOCKHOLDER is a 23-count convicted embezzler? Something stinks.

 

 

 

Somehow Diebold let prison records for programmer and main stockholder

 

Jeffrey Dean get by them, and also forgot to look at the prison records

 

of John Elder, who they put in charge of their ballot printing

 

facility.

 

Jeffrey Dean prison records:

 

http://www.bbvforums.org/forums/messages/2197/14323.html

 

John Elder prison records:

 

http://www.bbvforums.org/forums/messages/2197/14320.html

 

 

 

Their doo-doo diligence managed to miss some of the shoddiest voting

 

software

 

on the market. Here's how Dr. Herbert Thompson, a security expert and

 

adjunct professor of computer science at the Florida Institute of

 

Technology,

 

describes the software: When asked what he would do if one of his

 

students turned in a program like Diebold's, he said he would have to

 

give

 

them an " F " .

 

 

 

DESTRUCTION OF THE BRAND NAME

 

 

 

Diebold's brand name has become a source of mockery. The New York

 

Times featured a one-half-page photo of a chimpanzee altering a Diebold

 

voting system -- yes, the chimp actually achieved this after a one-hour

 

training session

 

video of chimp hacking Diebold machine:

 

http://www.bbvforums.org/forums/messages/2197/2368.html

 

 

 

Diebold is lampooned in comic strips, bumper stickers and popular

 

media.

 

Hustler magazine published a full-page satire ad lamenting Diebold's

 

role

 

in the loss of democracy.

 

 

 

This is Diebold now. Just four years ago, this company had an

 

untarnished

 

brand name dating back to the 1850s. For some reason, Diebold decided

 

to

 

expend its excellent brand name on a tiny rogue division providing less

 

than

 

five percent of its revenue.

 

 

 

PERSISTENT VIOLATIONS OF THE PUBLIC TRUST

 

 

 

- Poor security

 

- Secretive practices

 

- Ethical violations

 

 

 

Diebold's ethical failures include funky and improperly disclosed

 

lobbying,

 

lying to at least three different secretaries of state, and bait and

 

switch

 

tactics with its voting system customers.

 

Link to Rose & Kindel under-reporting:

 

http://www.bbvforums.org/forums/messages/1954/4447.html

 

Undisclosed lobbying by Juan Andrade:

 

http://www.bbvforums.org/forums/messages/1954/5595.html

 

 

 

It is Diebold's ethical violations that we will explore further in this

 

article.

 

Let's look at " the story behind the story " on just one incident, chosen

 

from of a veritable cornucopia of selections.

 

 

 

Documents were provided by Black Box Voting's Bev Harris and

 

Jim March to the California Secretary of State's office and to the

 

state

 

Attorney General's office (on behalf of a courageous source). These

 

documents prove legal misconduct, not just on Diebold's part, but on

 

the

 

part of their law firm, Jones Day. In these legal documents, Jones Day

 

writes of plans to lie to the California secretary of state.

 

Jones Day lies about votercard encoder (see #9):

 

http://www.bbvdocs.org/legal/JonesDayLies.pdf

 

Jones Day prepping Diebold to lie about San Luis Obispo Election Day

 

database leak :

 

http://www.bbvdocs.org/legal/JonesDaySLOprepLies.pdf

 

more about San Luis Obispo:

 

http://www.blackboxvoting.org/bbv_chapter-13.pdf

 

 

 

After delivering the documents to state law enforcement authorities,

 

the Jones Day documents were provided by Black Box Voting to

 

Ian Hoffman of Ang Newspapers.

 

 

 

Hoffman was brave enough to take on the story, though it led to an

 

unsuccessful lawsuit by Diebold's Jones Day law firm against his

 

publication. Hoffman's newspaper prevailed on First Amendment

 

grounds. The information was of critical importance to the public

 

interest.

 

 

 

Harris also received a tip from an inside source from California

 

named James Dunn. It had that authentic feel, so she turned it over

 

to March, who lived near Dunn. March hopped on his motorcycle to

 

take a declaration from Dunn(1). Dunn's testimony, also delivered in

 

person to the secretary of state's Voting Systems and Procedures

 

Panel (VSPP) proved that Diebold's lawyers lied about the votercard

 

encoder, that Diebold had been warned that it would fail in the March

 

2004 California primary. Of course, it DID fail, and it represented the

 

THIRD time Diebold used uncertified and unauthorized software after

 

being explicitly told not to by the secretary of state.

 

Declaration from Dunn:

 

http://www.bbvdocs.org/legal/dunndeclaration.pdf

 

 

 

The California VSPP grilled Jones Day (Diebold's law firm). " Were you

 

lying, or simply trying to mislead us? " they asked.

 

 

 

Diebold lied. Jones Day lied. Diebold brought in a damage control

 

expert,

 

at a cost of over $100,000 in just a single quarter.

 

 

 

Then-secretary of state Kevin Shelley decertified Diebold's TSx

 

machines,

 

recommending the case to the California attorney general for

 

prosecution.

 

 

 

Diebold directly caused the disenfranchisement of thousands of

 

San Diego voters during a presidential primary, yet this company

 

continues to ask for our trust.

 

 

 

The likely stockholder lawsuit is a positive sign. Attorneys for the

 

stockholders will cream Diebold, because we'll be able to prove that

 

Diebold failed to perform appropriate due diligence when they acquired

 

Global Election Systems, failed to follow their own lawyer's advice,

 

failed to follow the law, and marketed knowingly shoddy software

 

using false claims.

 

 

 

If we do not consequate this kind of behavior, it will certainly result

 

in

 

civil unrest. Stockholder litigation should be followed by a nationwide

 

recall of defective GEMS central tabulators. Also likely: A recall of

 

the

 

flawed optical scan system, which provides the opportunity for poll

 

workers and other election officials to tamper with elections through

 

credit-card-sized removable media.

 

 

 

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FOOTNOTES:

 

 

 

(1) Take a moment to read the Dunn Declaration.

 

 

 

We would suggest that the Dunn Declaration be considered a

 

blueprint for how a genuine insider's information should be treated.

 

Even if not using a formal declaration format, the factual information

 

has more power when sticking with just the facts, rather than

 

interspersing

 

commentary and opinion.

 

 

 

--------------------------

 

 

 

Black Box Voting is a nonpartisan, nonprofit 501c(3) elections

 

watchdog.

 

We are fighting for your right to oversee your own elections, for

 

removal of secrecy, and for fair, honest and trustworthy elections.

 

Black Box Voting is developing evidence and documentation to

 

help you, as a citizen, fight effectively for clean elections.

 

 

 

Black Box Voting is supported entirely by citizen donations. To support

 

our work, go to http://www.blackboxvoting.org/donation.html or

 

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" When the power of love becomes stronger than the love of power, we will have

peace. "

Jimi Hendrix