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Interesting description of the vendor-sponsored parties, also mentions that Triad GSI was trying to get into touch-screens. By the way, another vendor mentioned here, Dayton Legal Blank, is actually owned by ES&S.
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Updating voting machines could take nation a decade
14 February 2001
USA Today
If the nation decided to dump its antiquated voting machines tomorrow and get new ones, it wouldn't be able to do it.
In fact, replacing the now-suspect punch-card machines that are common across the country probably can't be accomplished by the next presidential election in 2004, and a complete modernization could take a decade, according to election officials and executives in America's tiny voting-equipment industry.
Fewer than a dozen U.S. companies make voting equipment, and even the largest of those has limited manufacturing capacity.
Even more crucial, they don't have enough trained personnel to carry out a crash national election upgrade.
"I don't think the industry is ready for the demand that is potentially going to come," says Kimball Brace, a leading election consultant.
"What happens when Miami-Dade, Dallas and Chicago say all of the sudden, 'We'd like to buy'? There is no manufacturer out there big enough," Brace says.
A host of government and professional task forces are churning out recommendations for how to avoid another election debacle like the one that unfolded last year in Florida. Newer equipment is high on their lists.
Florida wants to switch to a uniform statewide system of optically scanned ballots, the same technology used in grading standardized tests such as the SAT.
Georgia wants to convert to all-electronic voting, in which voters make their choices using a touch screen like those on ATMs.
The nation's secretaries of State want modernized equipment, and Congress may pour up to $2.5 billion into upgrades.
There are an estimated 600,000 or more outmoded punch-card and mechanical-lever machines across the country that would be up for replacement in any national upgrade -- many times the industry's normal annual production. Without larger staffs and deep-pocket financing, it will be impossible for equipment makers to ramp up production immediately, analysts say. Some components are in short supply, and though there is talk that big players such as IBM may join the voting machine business, no major high-tech firm is in a position to start selling.
"One of the assumptions these task forces are making is that there is an industry ready to meet their demands," says Peter Cosgrove, CEO of Sequoia Voting Systems, a leading equipment maker based in Exeter, Calif. "It would be dangerous of those groups to make the assumption that the entire country can change to new technology for the 2002 elections, or even for 2004."
The collision between a surge in demand and limited supply is "the next hurricane coming for election administrators," Brace says. "It has the potential of not being a very pretty sight."
The industry that provides equipment, supplies and expertise for the nation's elections is a niche business. Because elections come in cycles, so do its sales and profits. Total annual revenue is estimated at about $200 million in election years and $150 million in non-election years. Only a handful of companies that make approved voting equipment attempt to do business nationally. Nearly all are private companies; public shareholders would be impatient with their uneven earnings, executives say.
Not much bigger than an outlet store
Election Systems & Software (ES&S), with about 430 employees, is by far the largest.
At its small manufacturing facility in Omaha, about 20 employees sit at workbenches assembling and testing half a dozen different voting machines. They range from a large gray unit designed to count optically scanned ballots at high speed for an entire county to touch- screen electronic voting machines that look like an oversized child's Etch A Sketch and are used at local polling places.
In an adjacent warehouse, molded plastic equipment cases are piled high. One section has shelves where a limited inventory of parts awaits assembly. The entire operation isn't much bigger than a warehouse outlet store.
Jim Schmidt, who oversees the company's manufacturing, recalls how the company scrambled in 1998 to produce 7,350 voting machines in 100 days for Venezuela. "We had to pull out a lot of stops to do that," he says. All together, the company turned out 20,000 voting or vote- counting machines in the past 18 months, a record level.
Company officials are salivating over the coming boom and the profits it would bring.
ES&S is lining up outside producers to increase its manufacturing capacity.
Its nearest competitor, Global Election Systems in McKinney, Texas, plans to add a second or even a third shift at its plant. "We are gearing up to run 24/7 if necessary to meet the demand," says Global Vice President Larry Ensminger. The company may also turn to outside firms for additional assembly capacity.
Not all equipment makers are so sure the demand can be met. Chip Rabinowitz, who designed an electronic voting machine for Diversified Dynamics of Richmond, Va., says some components -- particularly touch screens and flash memory chips -- are in short supply. "It's probably going to take a minimum of 10 years" to complete a nationwide upgrade, he says.
Paul Craft, who oversees election technology for Florida, says his state hopes that by upgrading many counties at once, it can save money by buying voting equipment in large quantities. "That may not prove true," he says. "You may find yourself waiting in line to buy them at full retail."
Sequoia's Cosgrove says production capacity isn't even the toughest problem. "What's not achievable is being able to send out support people who understand the technology and elections and the legislative requirements in each state," he says. "There is a concern that the industry, in pursuit of early profits, will try to bite off more than it can handle."
Aldo Tesi, president of ES&S, says he believes that his company can meet demand. However, he agrees that "if there's a challenge, it's on the people side. We're going to have to be very smart about how we approach it."
Frightened by history
No major corporation has ventured into the U.S. voting equipment business since IBM, which popularized punch-card voting in the United States, got out of it in the early 1970s. IBM sold the rights to its Votomatic machine to four of its salesmen, who started a company called Computer Election Systems. At the time, their only competition was from old-fashioned paper ballots and from mechanical lever voting machines, which had been around since the late 1800s.
IBM unloaded the business because it knew bad publicity from a botched election could damage its far more profitable electric typewriter business, says Jack Gerbel, an IBM salesman who became vice president of the spinoff company. "Most of the free publicity they were getting was about elections, yet it was just a drop in the bucket, profit-wise," he recalls.
Gerbel is now president of his own company in Dublin, Calif. UniLect sells an electronic touch-screen voting machine.
Later, the punch-card business was sold to Business Records Corp., which also marketed optical scanning vote-counters. In 1997, that Texas company was in turn acquired by the Omaha firm that now is ES&S.
At the time, only three companies made optical scan vote-counting machines, so the Justice Department forced BRC to sell its scanning technology to Sequoia as well as the Omaha company to remedy antitrust concerns.
Now, the prospect of huge infusions of federal money is prompting some large players to rethink their aversion for the voting equipment business. Computer giant Unisys announced last month plans to market an election system that would automate everything from voter registration to vote counting. Other high-tech companies are working to perfect Internet voting systems, and IBM is rumored to be considering jumping back into the business. "We are examining that issue right now, but have not made any determination," says company spokesman Ed Barbini.
Harder than selling computers
But selling voting machines is more complex than selling computers, says Richard Smolka, publisher of a national newsletter on running elections. "When a vendor sells a county, they go in and instruct key personnel in procedures, changes, a host of little internal things," he says. "This is what new companies lack: support people and the experience."
Dave Keeler, vice president of a company in Dayton, Ohio, that prints ballots and sells electronic voting machines, says companies like his are crucial parts of the election system. "When they put in a new county elections director, who do you think is holding that person's hand? The experts reside in the private industry, and that's what makes it go around."
Any company angling for a piece of the action faces a long, tortuous road. Elections are a complex undertaking, carried out under state laws that vary widely and procedures and requirements that are different in each of America's 7,000 voting jurisdictions. Voting equipment must be certified by testing laboratories, then blessed by each state's top election officials. Sales are made by slogging from one county election board to the next. In most states, each county makes its own purchasing decisions.
Even if new orders pour in, those barriers remain. Sometimes salesmen seek to ease their jobs by pitching their wares at the annual meetings where each state's county election officials gather to keep current on election laws and practices.
For example, when Ohio election officials gathered at a Columbus hotel in January, equipment vendors turned the hotel's fifth floor into one continuous cocktail party. Riding up in an elevator, one county official checked with an equipment salesman to make sure he was ready to pour her favorite, Captain Morgan rum.
In room 531, Triad GSI of Xenia, Ohio had set up a Votomatic machine with a butterfly ballot from Palm Beach County, Fla., side by side with its electronic touch-screen model.
In Room 501, elections printer Barrett Brothers had its hospitality suite. Dayton Legal Blank, a printer and sales representative for an equipment maker, entertained in 509. The best party was in Room 506, where ES&S served hot hors d'oeuvres along with drinks.
'Extremely competitive environment'
Ten days later, some of the same companies -- and even a few of the same salesmen -- were in Orlando, where Florida county election supervisors gathered. Global's suite was holding a drawing for a large box of Belgian chocolates. Hart Intercivic, marketing an electronic voting machine, gave away a 13-inch color TV/VCR. Election software maker Iris lured officials by offering a chance at a gold necklace. "It is an extremely competitive environment," says Craft, the Florida official. "You have a static market, a fixed number of jurisdictions that need equipment. You've got all these vendors fighting for the same market."
It's not unusual, he says, for a company to spend two or three years trying to persuade local officials to buy its equipment only to lose out when the officials it has targeted go out of office. It's common, as well, for a vendor to be about to close a sale and have its competitors seek to sabotage the deal by planting doubts about the equipment in the minds of local officials who control the purse strings. "It's a dog-eat-dog world," Craft says.
Sometimes, salesmen feel the pressure to perform what they consider improper favors for election officials. One, who asked not to be identified for fear of losing business, told of encountering an election supervisor in a small Georgia county who listened to a sales presentation, then asked, "What's in it for me?" The salesman ignored the question, and the official repeated it. No favors were done, and the company won the contract anyway.
"This is no different from other government procurement," says Caleb Kleppner, an elections analyst with the non-profit Center for Voting and Democracy, based in Takoma Park, Md. "Kickbacks happen, and favored contractors win despite not having the lowest bid. Politics affects it, too. Anytime there are hundreds of millions of dollars being spent, there is incentive for that to happen."
TEXT OF INFO BOX BEGINS HERE
Old and new ways to cast ballots vary in 7,000 voting jurisdictions throughout the United States
Paper ballots
Voters put an "x" next to the candidate of their choice. Paper ballots, the oldest voting method, are used mostly in rural areas and smaller jurisdictions.
Lever machines
Large, mechanical contraptions in which votes are cast by turning down a lever next to the desired candidate's name. Most concentrated in New York, Virginia and Louisiana.
Punch card
The most common method. Voters use a stylus or punching device to make holes indicating their choices on a computer-readable ballot card.
Optical scan
Voters use a pencil or other marker to shade in ovals, circles or arrows on a printed ballot. The ballots are counted by computerized scanning machines, either at the polling place or in a central location.
Electronic
The newest technology. Voters indicate choices by touching a screen or pushing buttons, and an internal computer tallies the ballots.
Internet voting
May someday become a reality. At present, it is not used in elections because of unsolved problems about security and how to make sure the individual casting a vote is entitled to do so.
TEXT WITHIN GRAPHIC BEGINS HERE
Most voting methods decades old
Percentage of Americans that use these voting methods: (1)
Paper ballots (1789) 1%
Lever machines (1892) 18%
Punch cards (1964) 36%
Optical scan (early '80s) 27%
Electronic (late '80s) 9%
America's election challenge
GRAPHIC, Color, USA TODAY; Photo, B/W, Jocelyn Augustino for USA TODAY; GRAPHIC, B/W, Julie Snider, USA TODAY, Source: Election Data Services (BAR GRAPH); Caption: Electronic balloting: Touch-screen voting machines, such as this one by Election Systems & Software, are likely to become more common.
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