New York Times
Antonio Mugica, chief of Smartmatic, at the testing center for the company's electronic voting machines.
Gabriel Osorio for The New York
Times
Antonio Mugica, chief of Smartmatic, at the testing center for the company's
electronic voting machines.
A Crucial Vote for Venezuela
and a Company
By BRIAN ELLSWORTH
Published: July 20, 2004
CARACAS, July 19 - 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 Mr. Mugica, a 30-year-old Venezuelan
electronic 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
coup d'état that briefly removed Mr. Chávez from power 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 United States presidential elections
will be used by an estimated 30 percent of voters, compared with 9 percent in
2000, according to one election expert.
Smartmatic expects its sales to rise from less than $10 million in 2003 to more
than $100 million this year, and it expects steady growth if the recall vote
goes without a hitch.
Mr. Mugica and his childhood friend Alfredo Anzola opened Smartmatic in Boca
Raton, Fla., 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 as an electronic voting system.
This year, Smartmatic teamed with the Venezuelan telephone company CANTV, which
is 6.6 percent owned by the government, and a Florida engineering company, Bizta,
to form a consortium called SBC. In February, the group won a $63 million
contract to sell 20,000 of its newly designed SAES 3000 election machines and
licenses for their software to Venezuelan authorities for $63 million and 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 as 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 to a situation where 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," says 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."
Mr. Mugica says the country's long history of electoral fraud makes this
impossible. But even opposition leaders admit they are less wary of Smartmatic
than of the National Electoral Council, Venezuela's electoral authority, which
is dominated by a pro-Chávez directors. In March, the board, citing
technicalities, discarded hundreds of thousands of signatures requesting the
recall referendum. The action led to violent protests that left 14 dead and
dozens wounded.
Last Sunday, Smartmatic held test votes in more than 4,000 locations around the
country to prove the reliability of its voting machines, which include
encryption that the company says will make fraud statistically impossible. The
company's touch-screen voting machines, roughly the size of a desktop printer,
are the first of their kind to print a paper record that allows for a manual
recount.
The test vote used the country's two rival baseball teams as candidates, the
Leones of Caracas and the nearby Valencia Magallanes team. The results, however,
were not released, as Mr. Chávez is a known Magallanes fan, an indication of the
political eggshells the company is walking on.
Ezequiel Zamora, an opposition director on the National Electoral Council, said
of the technical performance, "The equipment worked perfectly."
Mr. Mugica, who as a 9-year-old was already programming simple video games on a
1983 Hewlett-Packard 86B desktop computer, says he believes that electronic
voting is an improvement over manual-count elections. Nonetheless, he
acknowledges that his engineering background gives him an unusual perspective on
elections.
"Venezuelans are obsessed with the referendum for its political implications,"
he said. "But for me, it's really just a networking challenge."