NC’s Stealth Voting Machine Monopoly

[Update June 5, 2018–SB 486 passed a second and third reading in Monday night’s legislative session. No lawmakers offered to amend the portion of the law addressed in this article. ~ jd]

Jun 4, 2018 (Raleigh) — Tonight at the Legislature, North Carolina’s lower chamber will conduct a third vote on an election reform bill that’s full of surprises, but one quiet little $10 million nugget will effectively mandate a single source for our state’s election machines, forcing all 100 counties to buy the same brand of equipment at non-competitive prices.

Peeling back the bill’s hidden meaning.

While common sense says that companies selling election equipment should warranty their work, up to the cost of a new election. The bone of contention involves how big an election.

For decades, North Carolina has required competing companies to post a bond covering the cost of a “statewide” election, specifically $10 million. While that all seems fair at first blush, it’s a red herring designed to drive out all competition. The failure of a voting machine in any given county would never require a new statewide election. Such a failure usually results in a manual recount. At worst, it forces a new county-wide election.

Vendors [must post a] bond or letter of credit …in the amount determined by the State Board as sufficient for the cost of a new statewide election or in the amount of ten million dollars ($10,000,000),
whichever is greater.”
(SECTION 3.6A. G.S. 163A-1115(a)(1))

Here’s why honest lawmakers should say NO

An easy fix is to change the language from “statewide” to “countywide.” Here are five reasons why:

  1. There are no scenarios where the failure of tabulation machine causes anything above a new County election.
  2. The change will allow counties (who pay for the equipment) to have more choices in machine features.
  3. Fair competition always leads to better pricing. Monopolies never lead to better pricing.
  4. Compteition promotes innovations in system design.
  5. A single-code system makes it easier for outsiders (or perhaps… Russians?) to hack the entire state.

According to Dr. Clara-Belle Wheeler, a member of the Virginia State Board of Elections, they have four certified vendors and such competition allows smaller counties to buy more affordable machines. “If Fairfax County wants their machines to make the voter a cup of coffee, they can have it,” she said, “but our more rural counties need less costly options.”

She said their outgoing Director, a Terry McAuliffe appointee with a checkered history, Edgardo Ortiz had personally lobbied for a single-source system, but cities and counties were paying for the equipment and they opposed it. He then suggested the state pick up the tab, but at a cost of $95 million, the measure was easily killed. Virginia has about 5.5 million registered voters. Since NC currently has almost 7 million registered voters, the cost will be higher.

In interviews with two out-of-state vendors (who asked not to be named in this article), the high bond price makes it too costly for them to compete in North Carolina. One said his firm puts a bond offer within their bid and the jurisdiction can make their choice accordingly. The other reminded me that all election machines must be certified by the federal government, competitive states have more choices. Neither ever had to hold a new statewide election if a machine burped.

Owen Andrews of PrintElect (Courtesy of LinkedIn)

How we got into this mess.

In NC, county taxes fund their election machines, but under current “statewide” language, all equipment comes from one vendor: Omaha based Election Systems and Software (or ES&S). Their NC franchisee is a New Bern company called PrintElect, headed by Owen Andrews.

To be clear, nobody opposes PrintElect’s fine–but expensive–equipment. It’s just that ES&S controls roughly 60% of the nationwide market. They also have six lobbyists registered in North Carolina.

When we first approached NCSBEEE Director, Kim Strach, about the single-source contract for NC’s election systems, who explained that the statewide warranty amounted to a $10 million surety bond that drove out all bids except for one from the deep-pocketed PrintElect.

Former SBoE Executive Director Gary Bartlett and the Democrat-controlled Board created the sneaky policy and quietly wrote it into NC Administrative Code (NCAC). Sensing that the policy could just as easily be changed with a simple Board vote, it appears that ES&S is now pushing for the “statewide” language in Senate Bill 486.

After it becomes state law, changing the policy amount would be virtually impossible and county governments are left holding the unfunded mandate. ES&S and PrintElect may be going for our gold, but North Carolina deserves better.

~ jd