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County input sought in voting system vendor merger
Senator fears ‘too much market power in too few hands’

By Charles Taylor
SENIOR STAFF WRITER

Sen. Charles Schumer (D-N.Y.) wants to hear from local and state elections officials about the merger of the top two elections systems companies that he fears could raise antitrust issues.

In a letter to Attorney General Eric Holder, Schumer asked the Justice Department to review the recent sale of Premier Election Systems, a former Diebold Inc. subsidiary, to Election Systems & Software (ES&S).

“If this acquisition proceeds, one company could control over three-quarters of the U.S. market for voting systems,” Schumer said in the letter, dated Sept. 14. He chairs the Senate Rules and Administration Committee, which has jurisdiction over elections-related issues.

“A county may not be able to negotiate effectively against a company that controls the vast majority of voting systems in the country,” he warned. Schumer said ES&S’ systems were used to count approximately 50 percent of all ballots cast in the last four major U.S. elections, and Premier had a 33 percent share of the voting-machine market.

He wants elections officials to share their concerns about the merger’s “effect on the business of elections.” And they can do so anonymously, if they fear backlash from the voting systems industry.

County News spoke with election administrators from across the nation for a preview of what Schumer might learn.

Ion Sancho is Leon County, Fla. elections director and served as a technical advisor for the state Supreme Court during the recount following the disputed 2000 Bush-Gore presidential election.

“For the number-one sized company (ES&S) to purchase the number-two sized company (Premier) is very troubling because it’s going to absolutely limit the products that are available in the market today,” Sancho said. “Elections officials have too few choices for voting equipment as it is in the United States of America.”

He also is concerned about the availability of voting systems for disabled voters. He said Florida jurisdictions have only one vendor to turn to for “disability voting equipment.”

Dana DeBeauvoir, Travis County, Texas clerk, is less certain than Sancho about the merger’s effects on the availability of competing voting systems. However, she said, “that’s what we fear” — that and less innovation.

“Right now what we’ve seen is a slowdown of all kinds of research and development,” she added. “There are no new ideas out there, and so our fear is that by shrinking the market, we might see less new thinking, not more.” DeBeauvoir was also stating the position of the National Association of County Recorders, Election Officials and Clerks (NACRC), a NACo affiliate on whose board she serves.

Brian Newby, elections supervisor for Johnson County, Kan., said: “…the elephant in the room is why would anyone in their right mind get into this business?”

Entering the voting systems market can be prohibitively expensive, according to Helen Purcell, Maricopa County, Ariz. recorder, and there is very little assistance available to do so. She is an advisor to the U.S. Election Assistance Commission, which certifies new voting systems — a process she said can cost “in the neighborhood of $1 million upfront.”

“So, how does someone with maybe a wonderful idea for a new election system get through that without the capital behind him to do that without being a large company?” she wondered.

The number three U.S. voting machine maker, Hart InterCivic, Inc., recently filed a lawsuit in U.S. District Court in New Jersey seeking a temporary restraining order against the merger. And Voter Action, a nonprofit voter advocacy group, has called on the Justice Department to “unwind this transaction.”

Newby thinks undoing the merger would be “pretty hard.” He thinks Schumer and others are right to be concerned, but Newby sees bigger issues.

Of greater concern to him is what’s happening to the election industry overall and how to contain costs while preserving election integrity in his rapidly growing county.

Johnson County’s population increased by more than 18 percent between 2000 and 2008, according to the U.S. Census Bureau (Kansas’ overall population grew 4.2 percent during the period).

“The part that concerns me is what we would do down the road if we needed to buy voting machines, because we’re a county that’s growing… We will need more machines,” Newby said.

Johnson County currently owns about 2,000 machines that cost $2,500 to $3,000 — “a $6 million fleet.” Newby said if those machines were to stop being made, he might need to use two different technologies.

“If this deal doesn’t go through, Premier says [they’ll] just shut down anyway; so one way or the other, I think it accelerates a big-time expense for us down the road.”

Purcell worries about smaller counties’ having fewer options and suffering as a result. If a vendor is the election systems provider for an entire state — including large, medium and small counties — larger counties are likely to receive better service, she said. For example in Arizona, La Paz County has 11 precincts while Maricopa has 1,142.

“It may be the small counties who really need a certain amount of support more than the larger ones, because maybe they don’t have the IT personnel that is capable of making necessary changes … when they’re trying to create a ballot and that type of thing,” Purcell said.

“That’s not fair, but the company is going to use their resources the best way they think that they can.”