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Review of e-voting firm is halted

December 23, 2006|From the Associated Press

MIAMI — A major voting machine company owned by Venezuelan investors said Friday that it would sell its U.S. subsidiary, ending a federal investigation into questions of possible ties between the company and Venezuelan President Hugo Chavez.

In 2005, Smartmatic Corp. acquired Sequoia Voting Systems Inc., which produces touch-screen and other machines and is one of the largest voting equipment makers in the U.S.

The U.S. government began informally reviewing the deal earlier this spring after a request by Rep. Carolyn B. Maloney (D-N.Y.), who cited a potential risk to the integrity of U.S. elections.

Smartmatic Chief Executive Antonio Mugica, who has dual Spanish-Venezuelan citizenship, later called for an official investigation to clear the company. He insists the Venezuelan government has never had any stake in Smartmatic of Boca Raton, or in Oakland, Calif.-based Sequoia.

Sequoia spokeswoman Michelle Shafer said Friday that a buyer had not been found. Still, the sale announcement effectively ends the investigation by the Committee on Foreign Investment in the United States.

Although the federal review had not concluded, the committee agreed to let the company withdraw from the process, said Treasury Department spokeswoman Brookly McLaughlin.

There was no immediate reaction from the Venezuelan government.

Although Venezuela is a top provider of U.S. oil, Chavez is a longtime foe of the U.S. government. During a recent speech at the United Nations, he called President Bush "the devil."

Sequoia officials said the controversy would not affect their company's role in elections.

"We believe Sequoia is well positioned to become the undisputed leader in the U.S. elections market," Sequoia President Jack A. Blaine said in a statement.

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