|
Edited on Fri Aug-22-03 10:16 AM by BevHarris
Anyone watching the press releases can see that several alliances completely unrelated to voting are taking place, like smart cards for college dorm cafeterias and so forth.
Exactly right: Diebold bought some little election company. Global Election Systems was run like a mom & pop shop, with crappy security and crappier programming. I've said this for months, and you'll see it in my earlier posts: Diebold did not really fold in their acquisition, and left it running in Texas, focusing instead on sales. They will probably pay a steep price liability-wise, but I don't see it having anything but a short-term effect on their overall business:
Here are the legal problems with what Diebold did with Global Election Systems:
1) They did not do adequate due diligence prior to finalizing the deal.
2) Once they bought it, instead of examining the software and procedures used by the boys in McKinney, Texas, they applied the Diebold muscle to marketing and concentrated on making sales. That will turn out to be costly, because the courts are not understanding about that kind of thing.
3) Instead of folding in the elections business, they assigned a fairly incompetent guy in Ohio to oversee it, and he stayed in Ohio to do so (!) and they just left the McKinney boys to do their thing.
4) They wrapped their respected name all over everything. The Georgia sales presentation is particularly damning: Diebold created a PowerPoint presentation that piggybacked everything Diebold had ever done right into the election system, without disclosing that the election system had been purchased about 35 days before the sales presentation. The presentation calls attention to Diebold Election Systems long history and track record, and inserts Diebold Inc. long history and track record.
Thus, when Diebold goes back and claims it just bought a little election company, any good lawyer will trot out this sales presentation and ask them why they misrepresented the situation. Indeed, they capitalized on the "we are secure, we make ATMs" a lot while selling their machines.
5) Diebold will also bear full liability for the FTP site. Here's why: When they did the acquisition of Global, they notified the Internet registry to change ownership of that site to Diebold. At that time, Diebold became the legal owner of the FTP site, and therefore is responsible for it.
6) Failure to supervise: Internal memos show that executives of the Diebold subsidiary, Diebold Election Systems, knew about the security risk posed by those files, discussed the security risk, but chose to do nothing about it for nearly a year. Then, they made a decision to shut it down, again shown by internal company memos, which again indicated it was a grave security risk, but then THEY FAILED TO SHUT IT DOWN!!!
7) Coverup: When asked by me, and shortly afterward, members of the press, Diebold executives in Ohio continued to lie about the FTP site, the patches, the remote connectivity, and whether the files had been used. They put these lies in writing and faxed them to reporters.
The truth is they bought a little election company, failed to do adequate due diligence, concentrated on sales instead of quality control and security, and it came back and bit them. The part that will bite their bottom line is the part where they sold systems by associating them with the Diebold security and quality that goes into their ATM machines.
Sorry, can't have it both ways.
I think the company will be forced to junk the entire suite of software they bought from Global Election Systems, they'll need to get rid of the executives that came with the acquisition, they'll need to replace the key programmers with their own. They also lost sales momentum and may have to refund and/or replace what they've previously sold. And they will probably end up paying hefty damages in product liability suits.
And by the way: Bob Urosevich is still the head of Diebold Election Systems, no change. And exec. Mike Rasmussen (who came from Omaha/ES&S with Bob Urosevich) is still around also.
If you say your house is now clean, you first need to clean your house.
Bev Harris
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
