US Case Poses Threat To 2013 Polls

MANILA, Philippines --- A legal controversy in the United States between Smartmatic International Corporation and the US-based owner of the optical scan voting system technology is putting the integrity of the May 2013 elections in jeopardy.

Militant lawmakers led by Bayan Muna Rep. Neri Javier Colmenares aired this concern as they revealed that the court suit between Smartmatic and Dominion Voting Systems International Corporation could prevent the former from complying with its contractual obligations with the Commission on Elections (Comelec) which has decided to purchase the Smartmatic Precinct Count Optical Scan (PCOS) machines for use in next year's polls.

Colmenares, together with Reps. Luzviminda Ilagan (Gabriela) and Antonio Tinio (Act Teachers party-list), filed House Resolution No. 2849 calling for a congressional inquiry into the alleged "misrepresentation and fraud" of Smartmatic when it entered into a contract with Comelec.

However, Comelec Chairman Sixto Brillantes described the calling of a congressional inquiry as premature. "I think they should listen to us first before they call for an inquiry. They should listen first to us," Brillantes said in an interview.

Colmenares said the investigation will also help Congress determine legislative actions that may be put in place to avert possible adverse impacts of the Court of Chancery of the State of Delaware case to the 2013 elections.

"The interest of the Filipino people in the legal controversy between Smartmatic and Dominion arises from the possibility that Smartmatic may have been liable for misrepresentation or fraud when it entered into a Deed of Sale with the Commission on Elections, to the prejudice of the Filipino people and the jeopardy of the upcoming automated polls next year," Colmenares said.

The administration lawmaker said the legislative inquiry will determine whether or not Comelec possessed all the information regarding the PCOS technology.

It will also look into Smartmatic's capacity to fulfil its obligations and promises at the time when the option to purchase was exercised and during the execution of the Deed of Sale.

According to the authors of HR 2849, Smartmatic sued Dominion on Sept. 11, 2012 before the Delaware court. The complaint stemmed from the PCOS Framework License Agreement executed between the two firms.

Under the business agreement, Dominion, which owns the optical scan voting system technology, granted to Smartmatic the license to exploit the said technology, including its marketing to other countries outside the United States.

Smartmatic claimed Dominion failed to honor its commitments and has interfered with its business of developing and providing for the automated election systems in Mongolia, Puerto Rico, and the Philippines.

"This would only mean that Smartmatic could not possibly comply with the conditions set forth by Comelec in the Deed of Sale until and unless the State of Delaware rules in its favor and rule immediately," Colmenares said.

Lawmakers said the Smartmatic complaint shows that the ownership of and full control of the PCOS technology is deeply embroiled in legal dispute. He added the court case also indicates that Smartmatic has no full control over the same, so as to enable it to make the changes necessary for the technology to be fully compliant with Republic Act 9369 and other Philippine Laws.

On July 2012, the Supreme Court upheld the validity and constitutionality of the purchase by the Comelec of the PCOS machines and other goods despite the palpable infirmities and defects of the PCOS machines.

"However, said SC decision was rendered without reference and information as to the legal controversy between Smartmatic and Dominion. The Highest Court upheld the Comelec's exercise of the option to purchase the goods but on the assumption that despite palpable infirmities and defects in the goods, Smartmatic can provide the enhancements required and requested by Comelec and Philippines laws," Colmenares said.

As the complaint would reveal, Smartmatic has no such capacity at the time of the execution of the Deed of Sale and even until present, seven months before the 2013 elections, they added.

Furthermore, HR 2849 states that "following the allegations in the complaint, the continuing refusal of Dominion to recognize the License Agreement obligating Dominion to provide the enhancements, improvements and modifications needed and requested by the Comelec, is detrimental to the Philippine elections, as well as renders the contract between the Comelec and Smartmatic defective." (With a report from Leslie Aquino)