Confirming rumors I’ve been hearing, the Miami Herald is reporting today that a U.S. Treasury Department entity, the Committee on Foreign Investment in the United States, is spearheading an investigation of the ownership structure of Sequoia Voting Systems, in particular, links to Venezuelans close to Venezuelan president Hugo Chavez. The CFIUS focuses on situations where foreign investment in U.S. corporations might impact U.S. national security.
As the story reported:
Federal officials are investigating whether Smartmatic, owner of Oakland, Calif.-based Sequoia Voting Systems, is secretly controlled by Venezuelan President Hugo Chávez, according to two people familiar with the probe.
In July, a Treasury Department spokeswoman disclosed that a Treasury-led panel had contacted Smartmatic, and a company representative said his firm was ”in discussions” with the panel. At the time, those discussions were informal. The government has now upgraded to a formal investigation, the two sources said.
The probe stems from a May 4 letter to the Treasury Department by Rep. Carolyn Maloney, D-N.Y., raising concerns about Smartmatic’s purchase of Sequoia last year. Maloney said she was disturbed by a 2004 article in The Miami Herald revealing that the Venezuelan government owned 28 percent of Bizta — a company operated by two of the same people who own Smartmatic. Bizta bought back those shares after the article appeared, and Smartmatic now characterizes the deal as a loan.
Bizta and Smartmatic had partnered with Venezuelan telephone giant CANTV to win a $91 million contract to supply electronic voting machines for Venezuelan elections, including the controversial 2004 referendum Chávez won.
Smartmatic categorically denies any link to the Chávez regime. ”Smartmatic is a privately held corporation, and no foreign government or entity — including Venezuela — has ever held an ownership stake in the company,” Mitch Stoller, a company spokesman, said in an e-mail to The Miami Herald.