EXCLUSIVE: HART INTERCIVIC ATTEMPTS HOSTILE TAKEOVER OF SEQUOIA VOTING SYSTEMS

[BradBlog]

Source: BRAD BLOG

EXCLUSIVE: HART INTERCIVIC ATTEMPTS HOSTILE TAKEOVER OF SEQUOIA VOTING SYSTEMS
Desperate to Stop the Deal, Sequoia's Owners Frantically Seek Funding, Legal Options, All of Which Have so Far Failed Enough to Lead the Judge Working on the Case Regarded One Such Legal Argument as a 'Conspiracy Theory'
Merger of Two Companies Would Likely Create New E-Voting Powerhouse, Face Federal Scrutiny, Come as Surprise to Sequoia's Current Clients...

-- Brad Friedman

As if Sequoia Voting Systems doesn't have enough trouble already, the company now needs some $2 million dollars in cash...quickly. Without it, they are likely to be subsumed by one of their nearest competitors, Hart InterCivic of Austin, TX, as soon as next Tuesday, The BRAD BLOG has learned.

In what could well be a major shift on the American election industry landscape --- and certainly on elections themselves in dozens of states across the country --- voting machine company Hart InterCivic informed the current owners of the beleaguered Sequoia of their intention to acquire ownership of the company in a move which could take effect as early as next week.

The attempted hostile takeover --- which, we've learned, has been quietly in the works behind the scenes since mid-February --- has set off a building panic among the senior management and owners at Sequoia, whose money woes had already led them to schedule a shut down of their Oakland headquarters. That shop is to close within a matter of months, as the operations for the company are to be consolidated at their Denver offices.

Court documents obtained by The BRAD BLOG reveal that Hart notified SVS of their intention to purchase the $2 million note held by Smartmatic on February 15th, giving the group of owners and share holders of SVS --- including CEO and President Jack Blaine, and VPs Michelle Shafer and Edwin Smith (whose names BRAD BLOG readers may recognize) --- just 60 days to match the offer Hart had given to Smartmatic. As the deadline nears, Due Dilligence processes have begun, and are near the final phases of completion at Sequoia...whether company management likes it or not.

Every legal effort by Sequoia and SVS to dispatch with the hostile takeover attempt has failed miserably so far, leading Vice Chancellor Stephen P. Lamb of the Court of Chancery in Delaware to even describe one such legal theory of SVS' as...(major irony alert!)...a "conspiracy theory"!...

COMPLETE EXCLUSIVE INVESTIGATIVE REPORT, DOCUMENTS:
http://www.bradblog.com/?p=5885

Condensed summary version also published at ComputerWorld:
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9076758


Read more: http://www.bradblog.com/?p=5885

[dixiegrrrrl]

1. Is this good or bad for voting rights?

How will it affect Diebokd?
or is diebold behind it?

anyone know ????

yoo hoo...anyone at all ???

[NMDemDist2]

2. Diebold isn't part of it I don't think

here's an article on Hart

Money rolled into Hart InterCivic in 1999


Around 1999, over $40 million in cash transfusions transformed this regional commercial printer with longstanding ties to Texas state government into a national player in the electronic voting machine industry. The Hart family retained an interest, but mostly new management accompanied the money. Where did Hart InterCivic gets its capital?

One investor: Tom Hicks of Clear Channel


One of the sources was Dallas billionaire Tom Hicks' investment firm, Stratford Capital Partners.

Hicks was in the group of investors who bought the Texas Rangers baseball team from George W. Bush and others. In that windfall, Bush put up less than 2% percent of the Rangers syndicate's original capital, should have gotten about $2.3 million from that sale, but somehow fortunately received $14.9 million of the proceeds. This deal catapulted Bush into multi-millionaire status.

Tom Hicks and brother Steve Hicks were among top contributors to George W. Bush when he was governor of Texas. The Hicks duo and their venture capital firm Hicks, Muse raised for Bush campaigns a total of $515,000 through the year 2000, according to Common Cause.

While governor, George W. Bush appointed Tom Hicks head of a Texas university fund, UTIMCO, which steered millions of dollars in undisclosed investments to cronies of Bush and Hicks. Between 1995 and 1998, almost a third of the $1.7 billion private equities portfolio was invested with firms personally or politically connected to Hicks or Bush. Despite pressure, UTIMCO under Hicks claimed it did not have to disclose either the destination or performance of those public moneys. They claimed the information was a trade secret, proprietary. (Sound familiar? Major voting machine manufacturers currently shield their software from independent examination, claiming that the software that electronically counts the votes of the public is a trade secret and proprietary.)

Tom Hicks has been a Vice Chair of the media empire Clear Channel, which at last count owned over 1200 radio stations, plus television stations, three-quarter of a million billboards, and assorted other media entities. Clear Channel dominated the audience share in 100 of 112 major markets, according to a Project Censored study in 2004.

In the beginning of the US-led invasion of Iraq, Clear Channel stations sponsored patriotic rallies around the country, which often morphed into pro-Bush rallies. Clear Channel also stopped playing the Dixie Chicks, outspoken critics of George W. Bush.

As of 2004, Clear Channel executives give a greater portion of their political contributions to Republican candidates than any other large media entity. The Chair of Clear Channel, L. Lowry Mays, was also a member of the Hicks-chaired board of UTIMCO.

Another investor: Texas Growth Fund


Another major investor in Hart InterCivic enabling it to become a multi-state election player was the state government of Texas, but through a side door. The Texas Growth Fund invested $19.8 million in Hart InterCivic as it was ramping up. The fund uses money from several state trust and pension funds to invest in private businesses that promise job growth in Texas. Texas Growth Fund operates away from public oversight, claiming the companies it invests in need confidentiality. It's an odd duck, a private entity investing public funds - few if any other states have anything like this. So, behind closed doors, the Texas Growth Fund, with four of its nine seats held by appointees of the Governor of Texas, invested public money in the voting machine company that will count votes in nearly half the counties in Texas, including most of the biggest ones: Harris County, Travis County, Brazos County and Tarrant County, Texas.

As the Austin Chronicle concluded in 2003, "the fact remains that Hart InterCivic is partially owned by the state of Texas--which itself is currently wholly owned by the Republican Party." {"The Texas Growth Fund; Cowboys, Cable, and Venture capital," by Lucius Lomax, Austin Chronicle, December 19, 2003,}
more at link

http://www.votetrustusa.org/index.php?option=com_content&task=view&id=1957&Itemid=51

[WhiteTara]

8. kick

damn...it looks bad for democracy

[RUMMYisFROSTED]

4. Bad.

Whenever private interests are controlling, or competing to control, the voting process, we lose.

[BradBlog]

6. I could make the argument for both sides, but...

...As you'll find when you read the story, I think it's NOT good for the e-voting industry. Things could get very ugly from here on a number of levels.

But as I say, I recommend the full linked story for a lot of really tasty details throughout. After which, I look forward to *your* opinion on whether or not it's good or bad for voting rights.

[Earth_First]

3. Interesting that Opensecrets.org has nothing listed for Hart Intercivic or Gregg Burt. n/t

[BradBlog]

9. Are you able to change that? (n/t)

[kster]

5. K&R..nt

[flashl]

7. K&R