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12/22/2006
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Sale Of Voting Machine Firm With Venezuelan Links Will Avoid U.S. Probe

During the recent midterm elections in the United States, Sequoia said its voting machines were used in 16 states without any major problems.

Voting machine provider Smartmatic Corp. and its Venezuelan owners will avoid a full U.S. national security investigation by putting the firm's Sequoia Voting Systems Inc. U.S. subsidiary up for sale.

Attention has been focused on the firm because of reports it has had business connections with the government of Venezuelan President Hugo Chavez, who frequently attacks U.S. policy.

In an announcement Friday, Smartmatic said it has withdrawn from a review process that was scheduled to be carried out by the U.S. Committee on Foreign Investment in the United States, which reviews foreign investments and acquisitions to determine whether they hold national security threats.

The firm got even closer attention after Chavez excoriated President Bush at the United Nations, calling him the devil incarnate. The CFIUS investigation was examining whether Smartmatic and Sequoia had or continue to have any connection to the Chavez government.

During the recent midterm elections in the United States, Sequoia said its voting machines were used in 16 states. Smartmatic noted that the U.S. Election Assistance Commission hasn't raised any questions about the equipment used in the recent elections.

"Given the current climate of the United States marketplace with so much public debate over foreign ownership of firms in an area that is viewed as critical U.S. infrastructure -- election technology -- we feel it is in both companies' best interests to move forward as separate entities with separate ownership," said Antonio Mugica, Smartmatic's CEO, in a statement.

Smartmatic's voting machines were used in a 2004 election in Venezuela won by Chavez; his opponent complained of voting irregularities, charging that Smartmatic had business links to the Chavez government. Smartmatic and Chavez denied the charges.

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