Smartmatic Faces Criminal Allegations Linked to LA Contract

Smartmatic, a prominent elections-technology firm, is embroiled in a series of criminal allegations involving its executives. Federal prosecutors recently asserted that a “slush fund” used for bribing foreign officials was partially funded by proceeds from the sale of voting machines to Los Angeles County. This development comes as the company pursues a defamation lawsuit against Fox News, claiming the network aired false accusations about its involvement in the 2020 U.S. presidential election.

The allegations surfaced in court filings in Miami earlier this month. Among those charged is Roger Pinate, Smartmatic’s co-founder, who, along with two Venezuelan associates, faces accusations of bribing officials in the Philippines to secure a contract for the country’s 2016 presidential elections. Pinate, who is no longer associated with Smartmatic, has pleaded not guilty to these charges.

To support their case, federal prosecutors intend to introduce evidence suggesting that approximately $300 million paid to Smartmatic by Los Angeles County for modernizing its voting systems was misappropriated. They allege that some of these funds were redirected to a fund controlled by Pinate through the use of overseas shell companies and fraudulent invoices.

Importantly, Smartmatic has not been charged with any criminal activity, nor have prosecutors accused the company or its executives of tampering with election results. Additionally, there are no allegations against Los Angeles County officials concerning misconduct, and county representatives maintain they were unaware of any bribery schemes, stating they had no knowledge of how the proceeds from their contract would be utilized.

As the legal situation unfolds, Smartmatic is concurrently engaged in a $2.7 billion defamation lawsuit against Fox News. The company alleges that the network propagated false claims linking it to election fraud, which have severely impacted its business. Despite these accusations, Fox News asserts that its coverage was a legitimate report on newsworthy allegations.

Smartmatic responded to the Justice Department’s recent filing, labeling it as riddled with “misrepresentations” and asserting that the company operates ethically. In a statement, Smartmatic emphasized, “Let us be clear: Smartmatic wins business because we’re the best at what we do.”

The intensity of the legal battles continues, with Fox News seeking more information regarding Los Angeles County’s dealings with Smartmatic. The network has highlighted the bribery allegations in its defense strategy, attempting to portray the company as one facing its own legal troubles rather than attributing damages to Fox’s reporting.

Founded over two decades ago by Venezuelan entrepreneurs, Smartmatic gained early recognition for its work with the late Hugo Chavez’s government on electronic voting initiatives. The company has expanded its operations globally, providing voting technology in 25 countries, including Argentina and Zambia. In 2018, it secured its contract with Los Angeles County, establishing a significant presence in the U.S. voting technology sector.

Following the 2020 election, Smartmatic’s business reportedly declined after Fox aired segments alleging that the company played a role in a conspiracy to manipulate election outcomes. While Fox has issued corrections in response to Smartmatic’s complaints, it is vigorously contesting the defamation lawsuit in New York.

In its filings, Fox has described Smartmatic’s legal actions as opportunistic, stating, “Facing imminent financial collapse and indictment, Smartmatic saw a litigation lottery ticket in Fox News’s coverage of the 2020 election.” Smartmatic has countered this narrative, labeling Fox’s characterizations as “lies” and an effort to distract from its own alleged misconduct.

As part of its inquiry into Smartmatic’s operations in Los Angeles, Fox has pursued legal action to compel LA County Clerk Dean Logan to release public records regarding his interactions with Smartmatic’s U.S. affiliate. In recent depositions, Logan was questioned about a dinner he attended at the exclusive Magic Castle club, which was paid for by Smartmatic, and a trip to Taiwan in 2019 to oversee equipment manufacturing.

U.S. prosecutors have claimed that the vendor involved in the alleged kickback scheme in the Philippines was also connected to Smartmatic’s operations in Taiwan. Fox has described Logan’s trip as a lavish excursion, while Logan asserted that the dinner was purely social and that he was not obligated to report the trip as business-related.

A spokesperson for Logan’s office stated that the bribery claims are unrelated to the company’s work with Los Angeles County, asserting that all of Smartmatic’s activities have been conducted in compliance with contractual obligations. Following Pinate’s indictment, he and other defendants were prohibited from engaging in business with the county.

Smartmatic has previously settled defamation lawsuits against conservative outlets, including Newsmax and One America News Network, connected to their coverage of the 2020 election. The terms of these settlements have not been disclosed.

In addition to the allegations in the Philippines, U.S. prosecutors have accused Pinate of bribing Venezuela’s election chief by providing her with a luxury home in Caracas. Smartmatic has refuted these accusations, maintaining that it ceased operations in Venezuela in 2017 after alleging electoral manipulation by the Maduro government.

In conclusion, the allegations against Smartmatic and its executives represent a complex interplay of legal challenges that could have significant implications for the company and its ongoing defamation case against Fox News. The unfolding situation continues to attract scrutiny as both sides prepare for potential courtroom confrontations.