Smartmatic’s Legal Troubles Worsen Amid New Bribery Allegations

Smartmatic, the elections-technology firm embroiled in a defamation lawsuit against Fox News, is facing increasing legal challenges as federal prosecutors have leveled new allegations against some of its executives. Authorities claim that part of a “slush fund” intended for bribing foreign officials may have been financed using proceeds from the sale of voting machines in Los Angeles County.

The latest details emerged in court filings in Miami, where federal prosecutors have charged Smartmatic’s co-founder, Roger Pinate, along with two Venezuelan associates, with bribery related to a contract for the 2016 presidential elections in the Philippines. Pinate, who is no longer with Smartmatic, has pleaded not guilty to the charges. Prosecutors assert that nearly $300 million received from Los Angeles County to modernize its voting systems was misappropriated to a fund managed by Pinate through a series of overseas shell companies and fraudulent invoices.

Despite these claims, Smartmatic has not been charged with any legal violations, nor have U.S. prosecutors accused the company or its executives of manipulating election outcomes. Furthermore, Los Angeles County officials have not been implicated in any wrongdoing and state they were unaware of the alleged bribery scheme. County representatives maintain they followed all regulations regarding the contract with Smartmatic.

The allegations come as Smartmatic pursues a $2.7 billion defamation lawsuit against Fox News, asserting that the network disseminated false claims regarding its involvement in rigging the 2020 U.S. presidential election. In its defense, Fox asserts that its coverage was purely journalistic, aimed at reporting credible allegations.

In response to the Justice Department’s allegations, Smartmatic described the new filing as replete with “misrepresentations” and disconnected from reality. The company emphasized its commitment to ethical practices, stating, “Smartmatic wins business because we’re the best at what we do.”

As the situation unfolds, Fox News has sought to obtain more information about Los Angeles County’s relationship with Smartmatic, using the bribery allegations to challenge the company’s credibility. The network’s legal team claims that Smartmatic’s business prospects have significantly deteriorated due to Fox’s coverage of the 2020 election, which they argue was not influenced by the company’s internal issues.

Founded over two decades ago by Venezuelans, Smartmatic gained early success under the government of the late Hugo Chavez. The company expanded globally, providing voting technology in 25 countries and securing a contract with Los Angeles County in 2018 to improve its election systems. However, the company asserts that its business suffered after Fox aired claims connecting it to election irregularities.

Fox News has also filed a lawsuit to compel Los Angeles County Clerk Dean Logan to release public records concerning his interactions with Smartmatic’s U.S. affiliate, adding another layer to the ongoing legal battles. In depositions, Logan faced questions about a dinner provided by a Smartmatic executive and a trip he took to Taiwan in 2019, which was covered by Smartmatic to oversee equipment manufacturing. Logan stated that the dinner was a social event and that the trip was necessary for business purposes.

As for the allegations of bribery, Logan’s office reiterated that the county had no knowledge of the alleged misconduct and that all of Smartmatic’s activities had been compliant with contractual agreements. Following Pinate’s indictment, he and the co-defendants were banned from any further dealings with the county.

In addition, federal prosecutors have accused Pinate of offering bribes to a Venezuelan election chief, including the transfer of a luxury home in Caracas, as part of efforts to maintain business relations after Smartmatic ceased operations in Venezuela in 2017. The company has consistently denied these accusations, asserting that it reported election manipulations and has not sought to conduct business in Venezuela since its departure.

Smartmatic has previously settled defamation cases with other conservative media outlets, including Newsmax and One America News Network, without disclosing the terms of those agreements. The current legal battles highlight the deeply intertwined nature of media, politics, and corporate reputation, particularly in the context of electoral technology and integrity.

As the cases progress, the impact on Smartmatic’s operations and its ongoing lawsuit against Fox News remains to be seen. The legal outcomes of these allegations could significantly affect the future of the company and its standing in the voting technology industry.