Controversy has followed the company for a long time: from conservative critics of Chávez to Democrats in their post-2004 freakout over voting machines.
One of the popular conspiracy theories retailed by Sidney Powell, Lin Wood, Rudy Giuliani, and the Trump legal team is that Dominion Voting Systems voting machines rigged the 2020 election, perfecting techniques pioneered by Smartmatic in rigging elections for Hugo Chavez in Venezuela. There are some obvious, glaring flaws in this theory, starting with the fact that Dominion and Smartmatic are competitors, and Smartmatic had no involvement in this election outside of Los Angeles. Given that a reputation for honest election administration is central to their businesses, both companies are very properly considering defamation lawsuits against Team Trump, and possibly against right-wing media outlets that have uncritically repeated its claims. Ben Smith, the former Buzzfeed editor-in-chief and now the New York Times media reporter, looks at what that might mean to Fox News, Newsmax, and OAN.
In general terms — and the law can vary based on where you file suit — injured businesses as well as individuals can file defamation cases. Corporations are people for purposes of this area of the law, as in many others — both the companies who can sue to protect their reputations and the media companies who can defend their right to speak. This has been true for many years — see New York Times Company v. Sullivan — and long predates Citizens United. A huge amount of First Amendment law was made by corporations who own newspapers and broadcast outlets. Plaintiffs typically want to file suit fairly quickly, as statutes of limitations are often as little as one year (but may be a year from the last publication of the statement). Lawyers and litigants can be immune from defamation claims in many states for what they say in court filings (a whole different set of rules applies to false court filings), but even where that “litigation privilege” applies, it typically will not protect statements in press conferences or other statements made outside of formal pleadings. Likewise, a media outlet will typically be on safe ground reporting “so-and-so alleges in his lawsuit that . . .” but will not be safe for treating those allegations as fact or making its own assertions. So, a lot of people could be in hot water for amplifying falsehoods about Dominion and Smartmatic. As Smith notes, one of the key issues in such cases is whether the plaintiff corporation is a “public figure,” which under Sullivan makes it harder to prove the plaintiff’s case without showing that the defendants knew or did not care that they were telling lies. Presumably, some of the defendants will just claim that they relied on people they trusted — however unreasonably.
What is unusual, however, about Smith’s report is that he glosses over the history of Smartmatic that has made it (unlike Dominion) a center of controversy for years before this and that gave rise to efforts to connect its Venezuelan founders to Venezuelan tyrant Hugo Chávez and its involvement in Venezuelan elections under Chávez and his successor, Nicolas Maduro. While that history does not change the fact that Smartmatic has nothing to do with Dominion or swing-state election results, it is important background to the story. He could have started with his own newspaper’s report from 2006:
The federal government is investigating the takeover last year of a leading American manufacturer of electronic voting systems by a small software company that has been linked to the leftist Venezuelan government of President Hugo Chávez. The inquiry is focusing on the Venezuelan owners of the software company, the Smartmatic Corporation, and is trying to determine whether the government in Caracas has any control or influence over the firm’s operations, government officials and others familiar with the investigation said. The inquiry on the eve of the midterm elections is being conducted by the Committee on Foreign Investment in the United States. . . . The committee’s formal inquiry into Smartmatic and its subsidiary, Sequoia Voting Systems of Oakland, Calif., was first reported Saturday in The Miami Herald.
Who wanted that investigation? A congressional Democrat beating the voting-machines drum after the 2004 Diebold flap ahead of the 2006 midterms:
“The government should know who owns our voting machines; that is a national security concern,” said Representative Carolyn B. Maloney, Democrat of New York, who asked the Bush administration in May to review the Sequoia takeover. “There seems to have been an obvious effort to obscure the ownership of the company,” Ms. Maloney said of Smartmatic in a telephone interview yesterday. “The [committee] process, if it is moving forward, can determine that.”
As the Times noted then, there were reasons to be concerned, given a controversial recall election allegedly won by Chávez in 2004:
Smartmatic was a little-known firm with no experience in voting technology before it was chosen by the Venezuelan authorities to replace the country’s elections machinery ahead of a contentious referendum that confirmed Mr. Chávez as president in August 2004. Seven months before that voting contract was awarded, a Venezuelan government financing agency invested more than $200,000 into a smaller technology company, owned by some of the same people as Smartmatic, that joined with Smartmatic as a minor partner in the bid.
The company argued that this was just a routine a small-business loan, but Bizta, the other company awarded the contract, had more direct ties to the Chávez regime, and Bizta and Smartmatic were run by the same people. A 2004 report from Wired illustrates the storm in Venezuela (involving extensive controversies over anomalous results and varying types of schemes by the Venezuelan government) and how Smartmatic was in the midst of it:
The five-member council, which is dominated by Chavez supporters, awarded the $91-million contract to Smartmatic, maker of the voting machine hardware, and Bizta, maker of the software that programmed the ballots and tabulated the votes. The companies are run jointly by two 30-year-old Venezuelan engineers, whose machines had never been used in an election. . . . As it turned out, the Venezuelan government owned 28 percent, or 3 million shares, of Bizta through investments in a venture capital fund. A top official from Venezuela’s science ministry, who helped Chavez get elected in 1998, was also a member of Bizta’s board of directors. In June, after the Miami Herald reported the connection, Bizta said it would repay the government’s $200,000 investment and remove the government official from its board.
As the Tampa Bay Times wrote in 2006, voting-machine fears were a hot topic in 2006:
Concerns about Smartmatic are keen on the eve of the Nov. 7 election, given fears that someone with unauthorized access to the electronic system could create electoral chaos. Some critics believe that if the Venezuelan government is involved, Smartmatic could be a ”Trojan horse” designed to advance Chavez’s anti-American agenda. . . . Botched municipal elections involving Sequoia machines in Chicago in March added to the suspicions. When the Chicago City Council grilled Sequoia executive Jack Blaine in April, he revealed that some Venezuelans had provided technical support during the election and that some of the glitches could be traced to a component developed in Venezuela to print and transmit results to a central tabulation computer. The Chicago Board of Election Commissioners is withholding further payment to Sequoia until after the Nov. 7 election.
Most of the concerns about voting machines in the U.S. evaporated after Democrats swept the 2006 midterms. But, as an op-ed in The Atlantic by Thor Halvorssen and Larry Diamond observed in 2013, Venezuela was another story:
The country’s electronic voting machines have been the subject of suspicion since 2004, when the government contracted with a Miami-based company, Smartmatic, to procure them, abandoning the previous system of paper ballots. Smartmatic was secretly financed and controlled by the government, giving it access to the software and hardware used in the contest. The Smartmatic machines were Venezuela’s first experience with electronic voting, and the skepticism was recently compounded by the introduction of an additional machine: the capta huellas, which literally means “fingerprint catcher.” . . . Venezuela has a sordid precedent of violating the democratic principle of ballot secrecy from the 2004 referendum petition, which sought to remove Chavez from office in a recall election. Chavez famously warned: “Whoever signs [the petition] against Chavez . . . their name will be there, registered for history, because they’ll have to put down their first name, their last name, their signature, their identity card number, and their fingerprint.”
The story of Smartmatic and Venezuela’s elections does not end there, however. By 2017, the company was publicly at odds with Maduro, and was blowing the whistle on his election-rigging:
In a stunning admission that fueled opponents of Venezuelan President Nicolás Maduro, the company that runs the South American country’s voting technology said the results of a widely condemned election Sunday had been manipulated. The chief executive of Smartmatic, a company founded by Venezuelans specifically to supply voting software for the administration of the late President Hugo Chávez, acknowledged that Sunday’s results had been inflated by at least 1 million out of nearly 8.1 million votes. “It is with the deepest regret that we have to report that the turnout numbers on Sunday, 30 July, for the constituent assembly in Venezuela were tampered with,” Antonio Mugica said. . . . Wednesday began with Mugica, the Smartmatic CEO, saying his firm couldn’t stand by the election results due to a lack of audits and other anti-fraud controls. He blamed Maduro’s opponents for boycotting the election, which meant its representatives weren’t present at the polls as a safeguard. “There were no witnesses,” he lamented.
This time, it was the Maduro government threatening to sue Smartmatic. Maduro himself claimed that the company was being pressured by the United States:
Venezuela’s president has accused the company that provides the technological platform for the country’s voting system of bowing to US pressure after it said the official turnout figure in Sunday’s vote had been manipulated by at least a million votes. Nicolás Maduro stood by the official count of more than 8m votes and said an additional 2 million people would have voted if they had not been blocked by opposition protesters. “That stupid guy, the president of Smartmatic, pressured to the neck by the gringos and the Brits, said there were 7.5 million [voters],” Maduro said in televised remarks. “I think there were 10 million Venezuelans who went out.” . . . Maduro provided no evidence to support his claim, but his remarks were received with resounding applause from a meeting of about 500 people elected to the assembly on Sunday.
In short, controversy has followed the company for a long time: from conservative critics of Chávez, from Democrats in their post-2004 freakout over voting machines, and from Venezuela’s socialist president. At the same time, it has also fought back publicly against real election-rigging in Venezuela, and the continual charges against its reputation are all the more reason why it is likely to care a good deal about having its name dragged into the 2020 controversies.