PETITION TO THE MEMBER OF CONGRESS OF THE PHILIPPINES REGARDING ISSUES ON THE AUTOMATED VOTING MACHINES

April 20, 2010



Dear Honorable Congressman/ Senator,



Based on the research conducted by Overseas Filipinos Worldwide (OFW) on the Automated Project Contract for the forthcoming May 10, 2010 elections for national, provincial, city and municipal positions, we air our concerns and bring to your attention the following anomalies:



1. The Automated Project Contract is signed by the Philippine Commission on Elections and a joint venture corporation named Smartmatic TIM Corporation with an address in Makati City, Philippines. The fee is Php 7,191,483, 739.48.



2. Smartmatic and TIM Corporation shall maintain and operate the project on a full-time basis for the entire duration. Smartmatic Corporation is incorporated in Florida and lists its world headquarters at Bocaraton, Florida, United States of America. Nowhere in the Automated Project Contract is shown the country where this corporation is incorporated. The Florida Register of companies shows that Smartmatic Corporation was incorporated in Florida in 2000.



3. However, our investigation revealed that Venezuelan officials were behind the incorporation of Smartmatic. According to registry documents, the incorporation of Smartmatic actually took place in the Fifth Mercantile Registry located in the ground floor of Tower B in Cubo Negro Building in Chuaro, Caracas. The head of the said Registry was the daughter of Venezuela Vice President Jose Vicente. Further report noted, by Cook County Chicago officials, that unknown Venezuelan investors operating through proxy European ventures could indeed be the controlling power behind Smartmatic.



4. Note that in the registry of the Amsterdam Chamber of Commerce, it was registered under a different name, Smartmatic International Holding B.V., and the sole shareholder is Amola Investments N.V. and this sole shareholder was incorporated in the Registry of the Chamber of Commerce of Curacao under number 91615. A search showed, however, that Amola Investments N.V. did not exist in the Curacao Chamber of Commerce. The incorporation number 91615 contained information that was not related to Amola Investments but to Smartmatic International Group N.V. . Some key investors of Smartmatic International are Venezuelans. The Managing Director of Smartmatic International Holding B.V. as shown in the Amsterdam Registry is Trust International Management (T.I.M.) B.V. and both companies operated from the same address.



5. There is reason to believe that Smartmatic has connections to the Hugo Chavez regime in Venezuela. When SMARTMATICs acquisition of Sequioa Voting Systems (USA based corporation) was being investigated by the USA Government for possible ties with the Venezuelan Government, Smartmatic withdrew in December 2006 and sold Sequioa, making its ownership unclear.



6. Article 14 of the Automated Project Contract provides that all notices and other communications required or permitted, shall be sent either by facsimile, personally, by registered mail or electronic mail at the numbers or addresses indicated below. For Smartmatic, the recipient ought to be Carolina Caruso, of 4, Stafford House, Garrison Savanah St., Michael, Barbados WI, BB 14038. The contract says only SMARTMATIC and the position of Carolina Caruso is not known.



7. Since the name used is SMARTMATIC, it is not clear which of these SMARTMATIC corporations in Barbados is under contract with the Philippines COMELEC: SMARTMATIC SERVICE CORPORATION (31299), SMARTMATIC INTERNATIONAL CORPORATION (24285), SMARTMATIC SERVICES CORPORATION (25239), SMARTMATIC INTERNATIONAL VOTING CORPORATION (27598), SMARTMATIC PROJECT MANAGEMENT CORPORATION (28662) and SMARTMATIC DEPLOYMENT CORPORATION (30338).



8. However, on the signature page of the same contract, Armando Yanes, with the title Chief Financial Officer, signed for SMARTMATIC INTERNATIONAL CORPORATION. No address was indicated for Armando R. Yanes; nor is there any proof that he was authorized by the Board of Directors of SMARTMATIC INTERNATIONAL CORPORATION to enter into the contract. In the list of documents attached to the contract, there is no sworn corporate acknowledgement of such from SMARTMATIC International Corporation.



9. The automated project contract is between the Commission on Elections and SMARTMATIC-TIM Corporation, a newly organized corporation in the Philippines. In the event of a court judgment against this joint venture corporation in the future, it can be enforced only against this corporation. Article 24.1 of the contract states that TIM Corporation and SMARTMATIC bind themselves jointly and severally for all the obligations and liabilities that might arise out of this contract. It mentions SMARTMATIC but there is no identification of which SMARTMATIC company is involved.



10. The Philippine Commission on Elections can still require SMARTMATIC INTERNATIONAL CORPORATION to clarify these legal issues, while the contract is being implemented but hold any payments under the letter of credit until these issues are resolved (to wit: authority of Armando R. Yanes to sign the document, articles of incorporation of the Smartmatic Corporation involved, etc.).



11. In any international contract, especially this contract with SMARTMATIC involving multi-billion pesos, the corporate name of the foreign company and its incorporation papers should be clear so that any complaint to be filed by the Philippine Government in the future can be directed against the specific corporation involved.



12. Further, the Commission on Elections failed to include, in the dispute resolution process, the following contractual provisions: secure SMARTMATIC agreement to accept service; waive Smartmatics forum non conveniens defense, and stipulation on the country or countries where asset recovery will be sought. But since the Automated Project Contract was entered between the Commission on Elections and SMARTMATIC-TIM joint venture corporation, the liability of shareholders for the corporations debts and obligations is limited to their capital investment in the joint venture corporation.



The COMMISSION ON ELECTIONS, by entering into a contract with SMARTMATIC, has let the public down. With roughly 80\% of all computer crimes perpetrated by insiders, We, Overseas Filipinos worldwide, have reasons to worry. Smartmatic alone wrote the code and maintains the hardware. Recently in Arizona, USA , an elections division programmer admitted in 2006 that he flipped votes and rigged the results provided by a Diebold tabulator on the direction of his boss in the Pima County, Arizona Elections Divisions. Another incidence showed a former Diebold contractor recently blew the whistle on electronic manipulation of votes. A Republican cyber security expert said that electronic voting systems are inherently insecure. Electronic voting machines can be hacked easily. Both tabulator and optical scanners can be manipulated. Even if voters fill out paper ballots, their votes become insecure when they are scanned by an electronic optical scanner.



Optical scanners that count paper ballots and electronic tabulators and data memory cards are all owned by SMARTMATIC and these are to be used in the May 10, 2010 elections using their proprietary software that are unavailable to the public and political parties for oversight and acceptability. The Overseas Filipinos Worldwide fears the vulnerability of these machines to count and tabulate votes and may be subject to hacking thus producing false results.



We are afraid that the elections in the Philippines will be determined by unknown programmers and unknown program hackers. This in effect destroys the Filipinos right to vote in fair, honest elections in the Philippines. We raise this alarm to rescue the elections credibility; And we submit the following observations:



- Source code review is a substitute for public counting. If this can be reviewed, we will know how the votes marks are interpreted, how votes are assigned to the elected candidates, how votes are tallied, what data are saved for back-up later, how the precinct elections returns are generated, how it is digitally signed by the Board of Election Inspectors, how the transmission, to the municipal canvassing computers and other destinations are carried out, what details are placed in the audit logs and whether the details are sufficient. With a source code review conducted by trusted individuals, the computerized counting of votes although carried out in secret by the PCOS computers will be known to the public. The final source of the PCOS and CCS (Counting Consolidation System) and all of its components shall be made available and is open to any interested party or group which may conduct their own code review so that they can take the code apart to understand what it is doing. This is a requirement in the Automated Project Contract. But one major problem is that the COMELEC could not fulfill this sacred duty of source code review since Smartmatic has only a binary license (not source license). With only a binary license to operate the PCOS computer hardware and software owned by the Dominion Voting Systems of Canada, using a copy of the source code is not part of Smartmatics binary license presented by Smartmatic to COMELEC. This is probably the reason why no group has managed to conduct a source code review.



- We have few days left before the May 10th election but there are many risks and vulnerabilities of this automation election. The danger signs are: the entire batch of 82,000 precinct count optical machines scanners (PCOS), their component servers, printers, generators, 180,640 memory cards, and 82,000 batteries have not been fully tested. The source code (brain of the machines) remains highly restricted and there has been no independent systems audit report released to date, no independent party has been designated to handle private keys that would unlock PCOS machines prior to transmission of results, ballot printing has been drastically delayed, critical contracts, instructions, plans and procedures have not been made public, no sufficient training for 230,000 teachers has been undertaken and voters have not been sufficiently informed of the new clustered precinct assignments.



We, Overseas Filipinos Worldwide, share our concerns with our countrymen in the Philippines and are therefore appealing to the Honorable Members of the Congress of the Republic of the Philippines to do everything possible to correct the lapses that we have outlined above.



Thank you, from an Overseas Filipino.



Very respectfully yours,