Casting its lot with e-voting
by Kirk Ladendorf, American-Statesman Staff
published 10/27/2008
Austin's Hart InterCivic is unfazed by the changing trend in voting technology.
One winner in the Nov. 4 election already has been declared: the paper ballot.
The nation's brief surge of investment in electronic voting has receded. A smaller percentage of voters will use electronic voting machines this year than in 2006, the peak year for the technology.
But Austin's Hart Intercivic is unfazed by the changing trend in voting technology. That's because Hart, along with other major vendors of voting equipment, sells advanced scanning systems that count paper ballots as well as its dial-and-button eSlate electronic voting systems. The company said it can thrive no matter what the preferred voting technology turns out to be.
"Our core business is the election technology business," chief executive Gregg Burt said. "When you study this industry, it is kind of a wild one, but we are very good at it. We are absolutely focused on elections. It is what we do best. It is what we know. We are profitable at it, and we are going to be around forever at it."
The election technology business exploded early this decade, as states and counties responded to the controversial Florida presidential election recount of 2000. The federal Help America Vote Act, passed in 2002, set aside nearly $4 billion for local spending in new technology and was supposed to fix many of the problems that plagued Florida.
But problems in some of the new e-voting systems sparked a new wave of criticism, lawsuits and decisions by some states to impose tougher new standards on the equipment.
The problems involved touch-screen systems, not the dial-and-button system that Hart's eSlate uses. But critics also raised questions about whether electronic systems could be hacked as well as the absence of paper ballots to verify votes in case a recount was needed.
The criticisms make the voting technology business a tricky one to play in. But Hart, the fourth largest maker of election equipment, said his business has better technology, service culture and track record than its major competitors. The company says that in hundreds of elections, its equipment has never lost a single vote.
Burt is leading a management buyout of the company that is expected to be completed soon. The goal is to use cash and debt to buy out the company's several venture investors who put an estimated $50 million into the company in 1999 and 2000 to back Hart's aggressive move into election technology. No details on the buyout plan have been divulged.
Hart's top sales year was in 2006 when the company had revenue "well above" $100 million, Burt said, but the company slid into the red in 2007 when there were no major elections to gear up for.
Burt joined the company last year to revamp the business. Under his leadership, the company has shed its non-elections related operations and spun off its election-related printing business. As a result, Hart has a slimmer payroll: just 90 workers now compared with 200 at the start of the year.
Hart has sold voting equipment to 350 counties in 13 states: Texas, California, Colorado, Washington, Oregon, Hawaii, Tennessee, Ohio, Illinois, Indiana, Pennsylvania, Kentucky and Virginia. Since 2000, Hart has sold some 36,500 eSlate electronic voting systems. Since its optical scanning device, the eScan, was introduced in 2005, the company has sold 3,500 of them.
Its sales picked up this year as counties bought more machines to prepare for anticipated heavy election turnout.
Hart will make a profit this year, Burt said, and the company is set to be profitable in 2009, when there are no major elections scheduled.
Election technology consultant Kimball Brace said that criticism of direct-recording electronic voting systems, or DREs, has pushed some states and counties to scrap their equipment and start over with new paper-ballot scanning systems.
Critics say the direct-recording electronic machines lack necessary security systems, are subject to technical glitches and lack a tangible, proven way of recounting poll results.
"Paranoia has basically stopped the growth on the electronic side of the business," said Brace, who is president of Election Data Services, a consulting company in Manassas, Va.
His company's survey of technology in use for this year's election showed nearly 59 percent of the nation's counties — representing 56 percent of all voters — will use scanning technology, up from just under 50 percent two years ago. Only 32.6 percent of voters will be using direct-recording electronic systems this year, down 5 percentage points from two years ago.
Critics of electronic voting say the shift in voting technology is a positive first step.
"There is no question that in the last few years, election officials around the country have made dramatic improvements that will make it much less likely that voters are disenfranchised due to voting system failures," said Lawrence Norden, director of the voting technology project at New York University Law School's Brennan Center for Justice. But Norden still faults places such as Travis County that use a purely electronic voting system without a verifiable paper record.
"Texas is way behind the national trend toward verifiable paper records and being prepared for machine problems," he said.
Travis County uses Hart's eSlate system, and County Clerk Dana DeBeauvoir said the county has never had a serious election problem with its e-voting machines in part because of testing her office does before and after the election.
"We do extensive testing," DeBeauvoir said. "The computer scientists have taught me that. It gives us a higher confidence level."
Despite Travis County's good experience with the eSlate, DeBeauvoir said the county will begin to study next year what future voting system it will use.
"We anticipate that the market will deliver better and better products, and those products might include something that would satisfy the paper-trail enthusiasts."
A new generation of voting equipment probably won't be used by the county until about three years from now.
Although a few of its large competitors have been hit by criticism of their equipment and its performance in recent elections, Hart has won plaudits from customers.
Neal Kelley, registrar of voters for Orange County, Calif., praised the Hart equipment for flawlessly handling several recounts in recent elections.
"I have had these recounts come up on me, and we accounted for every single vote in the system with teams of attorneys and the media watching," Kelley said earlier this year. "These recounts have all come out on the money, and we accounted for every single vote."
In Tarrant County, which includes Fort Worth, elections commissioner Steve Raborn is using a mix of technologies.
The county will use Hart's eScan optical scanning system as its main system on election day. But early voting is being handled by the eSlate.
That's because the electronic system can easily handle the more than 3,000 unique ballots needed by the county for its many voting jurisdictions – including more than 20 school districts and more than 40 municipalities.
"We expect more than 50 percent of our turnout will be e-voting," Raborn said.
"The eSlates work well," he said, "but I can see the benefits of the eScan. It makes some voters more comfortable. You have some die-hards that are only satisfied with the paper ballot, and you can accommodate them on election day."