This year, a US company sold 20,000 of its election machines and licenses for their software to Venezuelan authorities for $63 million and won a $27-million contract for service during the recall vote against Hugo Chavez which takes place in August. This controversial and critical referendum may end up putting the technology on trial...
CARACAS Most Venezuelans see the coming referendum on the rule of President Hugo Chávez as a chance to rebuild this divided nation. But Antonio Mugica, chief executive of the networking company Smartmatic, sees a phenomenal marketing opportunity for his company's voting technology...
Smartmatic's voting machines will be used for the first time in the Aug. 15 referendum that is likely to be one of Venezuela's most hotly contested elections, making the company's baptism by fire an all-or-nothing gamble that its first electoral count will be flawless.
"If we can prove that this product works under the most hostile of conditions, we can sell it anywhere in the world," said Mugica, a 30-year-old Venezuelan electronics engineer, in an interview in his downtown Caracas office. "That's our marketing strategy."
The gamble is a big one. Smartmatic will have to navigate the turbulent waters of Venezuela's political struggle, which in just over two years has led to a failed attempt at a coup d'etat and a two-month strike that briefly almost shut down the crucial oil industry. Any operational glitches leading to accusations of fraud or vote manipulation would scar the company's reputation.
But if all goes well, Smartmatic could become a rising star of the budding world of electronic voting, which in this year's U.S. presidential elections will be used by an estimated 30 percent of those who vote, compared with 9 percent in 2000, according to one elections expert.
Smartmatic expects its sales to increase from less than $10 million in 2003 to more than $100 million this year, and it expects steady growth if the coming recall vote goes without a hitch.
Mugica and his childhood friend Alfredo Anzola opened Smartmatic in Boca Raton, Florida, in 1999, intent on developing applications for the emerging field of device networking, which allows electronic devices like cameras and alarm systems to share information.
But after living through the Palm Beach County ballot-counting uproar in the 2000 presidential elections, the two decided that the best application of their networking platform was an electronic voting system.
This year, Smartmatic sold 20,000 of its newly designed SAES 3000 election machines and licenses for their software to Venezuelan authorities for $63 million and won a $27-million contract for service during the recall vote.
But this booming business has not come easy. Opposition leaders attacked the electoral authority's decision to hire a company with no electoral experience for such a sensitive vote, complaining that the selection process had not been open enough. The credibility of Smartmatic took another hit in May when The Miami Herald reported that the Venezuelan government owned a 28 percent stake in Smartmatic's partner company Bizta, leading the opposition to suspect that the government would rig the results. Bizta quickly bought out the government's stake.
Smartmatic representatives said they never expected the subject of impartiality to come up, indicating that the company was inexperienced in managing its public image as it was in counting votes.
Critics of electronic voting also say that Smartmatic is providing an overengineered solution when a manual count would work just as well.
"The Venezuelan referendum has to be the simplest election I've ever heard of - yes versus no," said Aviel Rubin, an associate professor of computer science at Johns Hopkins University who has researched electronic voting. "A paper ballot vote with a manual vote count would be the most transparent way to hold this election."