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Philly’s new voting-machine contract in jeopardy because vendor failed to disclose use of lobbyists, campaign contributions

The vendor will pay a $2.9 million fine to the city if the contract moves forward.

New voting machines sit in the Center Court at Reading Terminal Market for the public to test out and demonstrate for the first time on Friday, June 07, 2019.
New voting machines sit in the Center Court at Reading Terminal Market for the public to test out and demonstrate for the first time on Friday, June 07, 2019.Read moreHeather Khalifa / File Photograph

Six months after Philadelphia picked a vendor for its new voting machines, the contract is suddenly in jeopardy.

City Solicitor Marcel S. Pratt notified the acting board of elections Monday that Election Systems & Software (ES&S) violated the city code by failing to disclose its use of lobbyists and the lobbyists’ campaign contributions, including to the two city commissioners who selected the system.

The board of elections, normally composed of the city commissioners, will meet Thursday to decide whether to move forward with the contract.

ES&S will be liable for a $2.9 million fine, Pratt wrote in his letter to the board, adding that it has agreed to pay the fine if the contract proceeds.

Deputy City Commissioner Nick Custodio, the board’s spokesperson, said he would not comment until after Thursday’s meeting.

Pratt also included a letter from the city’s procurement commissioner, Monique Nesmith-Joyner, who appeared to urge the commissioners to continue with the contract.

“The City anticipates that ES&S’ XL voting machines will greatly enhance the voting experience for our voters, improve voter confidence in future elections, and ensure compliance with federal and state regulations,” she wrote.

Nesmith-Joyner noted that the city has incurred more than $20 million in direct and indirect costs, received more than 3,200 machines, signed a lease on a warehouse for the machines, and held more than 150 public demonstrations of the new systems. Given how deep into the rollout the city is, she wrote, restarting the process would mean the city could not have new systems in place for November’s municipal election. (The city’s final shipment of voting machines is scheduled for Friday.)

As for having new machines by the April 2020 primary election, Nesmith-Joyner said it would be “unlikely.”

She said the city “would be at risk of failing to comply” with Gov. Tom Wolf’s order that all counties replace their voting machines by next year’s elections.

Philadelphia, like most counties in the state, uses machines that record votes directly into electronic memory and do not produce a paper record that can be manually recounted or audited.

What the vendor failed to disclose

On its disclosure form, ES&S said it hadn’t used a consultant (or lobbyist) in the year prior to bidding for the city contract. But in fact, the company was working with Duane Morris LLP and Triad Strategies LLC “to assist ES&S with obtaining the contract,” Pratt wrote.

The violation was first flagged by City Controller Rebecca Rhynhart, who has been a vocal critic of the voting-machine contract selection and whose office is investigating the selection. Duane Morris gave a $1,000 campaign donation to Al Schmidt, Triad Strategies donated $250 to Schmidt, and Triad Strategies donated $500 to Commissioner Lisa Deeley’s campaign.

Schmidt and Deeley are the two commissioners who voted in February to select ES&S’s ExpressVote XL system, then recused themselves from the board so they could run for reelection to the board, which oversees elections. Schmidt did not immediately return a request for comment. The third commissioner, Anthony Clark, did not participate in the vote and has called for the process to be restarted.

ES&S’s lobbying, Rhynhart wrote, included “direct communication” with Schmidt, who in 2013 paid out of pocket for a trip to ES&S headquarters in Omaha, Neb. The company is the nation’s largest manufacturer of voting machines.

Use of lobbyists isn’t illegal, and Pratt noted in the letter that ES&S could have disclosed the lobbying and the campaign contributions without being disqualified from the bidding and selection process. The other finalist, Dominion Voting Systems, also did not disclose its use of a lobbyist.

ES&S said in a statement, “We sincerely regret the oversight and have taken every measure to correct the matter” and had “immediately addressed it" once it was notified of the issue. "The fact is our omission was due to a mistaken interpretation of Philadelphia’s contracting provisions.”

The company noted it and its lobbyists had filed campaign-finance disclosures with the city’s board of ethics. But at issue is a missing filing related to the bidding process.

What comes next

The spotlight will be on the two city judges, Giovanni Campbell and Vincent Furlong, who are temporarily replacing Deeley and Schmidt on the board during their reelection bids. Campbell and Furlong, along with Clark, will be responsible for deciding whether to continue with the contract.

In April, the judges said they wouldn’t overturn the decision, even as advocates for hand-marked paper ballots urged them to nullify the contract and restart the selection process.

Advocates said they will be at Thursday’s meeting to urge the judges to start over.

“This is an off ramp to get out of this whole mess, start over, and pick a better machine,” said Kevin Skoglund, one of the leaders. “We are going to show up and plead with the board to take it.”

Rhynhart also plans to attend the meeting. In her letter, she called for the board to hold off until her investigation is finished.

“I appreciate that there are expenses the City has incurred and the time employees have spent learning the new equipment, but the improper actions of ES&S should not be rewarded without considerable scrutiny,” she wrote. She said that while she understands the need to meet Wolf’s deadline, “the City must not throw out its procurement rules to accomplish it.”

Staff writer Andrew Seidman contributed to this article.