The blue areas are Diebold; the red are ES&S. As you can see, the industry
was already overconcentrated before the acquisition, with way too many
locations dependent on just a few vendors. But after the acquisition, you see
the blue areas convert to red, and it is clear that this gives ES&S
near-total domination of US elections.
The reason antitrust laws exist is to prevent unhealthy and predatory business
practices. We are already seeing these in the elections industry, where public records
show that ES&S has been price-gouging and strong-arming local officials
into "take it or leave it" clauses in contracts. If there isn't
enough competition, it leaves election officials with no choices, no bargaining
power, and no leverage to enforce quality controls or fairness.
For example, Black Box Voting obtained information in our public records
requests which revealed that Angelina County, Texas had been subjected to horrible
treatment by ES&S, and when they complained, ES&S threatened them with
shutdown of election support for their 2008 presidential election if they didn't
sign. The situation was egregious: ES&S required them to use
ES&S-selected technicians to run their election, and the technician
miscounted the election, resulting in a judge ordering a new election (at
Angelina County expense!). Then ES&S charged Angelina County $1300 per day
for the technician's work. When Angelina County officials protested, they were
ordered to sign a new contract "or else."
An even worse example took place in Florida, where anti-competitive actions
violated both the Clayton Act and the Sherman Act. When Ion Sancho worked with Black
Box Voting to demonstrate the vulnerability of the Diebold system to vote
manipulation, Diebold refused to provide a legally required update. Florida authorizes
only three vendors to sell voting machines. When Sancho tried to replace
Diebold's system with another vendor, all three vendors refused to sell to him.
This kind of collusion is not just illegal; it is a crime. Then, the governor
of Florida tried to push Ion Sancho out of office, threatening him with loss of
his job if he didn't purchase the update, which the limited number of vendors
refused to sell to him.
But there are worse consequences. What we have talked about so far is the
"horizontal monopoly" -- when there aren't enough different vendors
to buy from, which invites price-gouging, lack of quality, and strong-arming on
contracts. But the "vertical monopoly" is even more dangerous.
A vertical monopoly exists because ES&S controls the whole process. Imagine
this: Suppose you have just one farmer providing all the wheat for breakfast cereals,
and the same farmer owns the ONLY breakfast cereal company. The farmer could
price-fix and gouge on both ends, the supplier end and the retail end.
Diebold provides voter registration software, which affects WHO can vote; it
provides electronic pollbooks, which control the report of WHO voted and who is
allowed to vote, it controls the absentee ballot authentication software, which
dictates which vote by mail ballots will be accepted for counting it controls the
counting of both polling place and absentee votes, which is concealed from the
public. ES&S has a similar vertical monopoly. This is a horrible,
undemocratic situation that is ripe for fraud.
Quite literally, this vertical monopoly represents a transfer of power from the
public to insiders with access to the system (whether they be government insiders
or vendors).
The genius of a truly democratic system lies in dispersed power and public
controls over public elections. When you consolidate power to a single entity, you
create a system that is perhaps tidy, but very unstable. Dictatorships are
tidy. Democratic systems are messy, but the dispersal of power makes them stable.
Centralized control destabilizes our democratic system of government.
Note that currently, centralization has been achieved both by government, with
the White House-appointed Election Assistance Commission, and through consolidation
of the elections industry into just a few vendors.
Okay, I get it. Vertical and
horizontal monopolies are not good in general and especially bad for democratic
elections. Let's pause here. When we return,
Bev will explain what happens now with the anti-trust probe by the DOJ. I hope
you'll join us.
***
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