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Sarnia Hires Electronic Voting Firm With Spotty Financial Background

Tue, 04/04/2017 - 11:52 -- Chris Cooke
City Hall staff members

Kevin Arjoon says he was “surprised” when he arrived in Halifax in early 2016 to reports the Regional Municipality’s phone and electronic voting provider Intelivote Systems Inc. was having financial issues. Arjoon, who is the Clerk told First Monday he, his staff and Council did some “fancy footwork” and ultimately retained the services of Barcelona – based Scytl. Scytl is contracted through until 2020 and will be handling the municipality’s by-elections.

Arjoon was reluctant to get into details noting only that the municipality was “not bound” by a $495,000 standing offer to Intelivote. There were published media reports that Intelivote was for sale, that the company was going out of business and that the Atlantic Canada Opportunities Agency was taking legal action.

Dean Smith says he hasn’t heard from the Atlantic Canada Opportunities Agency in 18 months. The president and founder of Intelivote Systems Inc. says he hasn’t made payments to the Federal agency during that time.

The Atlantic Canada Opportunities Agency filed a claim in Nova Scotia Supreme Court claiming the Dartmouth Company had become insolvent, defaulted on terms and conditions of a $1.3 million loan.

Smith denies that saying the amount being sought by the Atlantic Opportunities Agency represents portions of “non – repayable amounts” it received in four installments as a third party investor. However, he admits “some payments were missed” after the company re - negotiated “interest free loans” and later indicated it would be going out of business.

Speaking of the re-negotiated payments, Smith told First Monday “$20,000.00 a month is a lot of money for a small company like us”.

Smith says just as the company was on the verge of closing it won business in Nova Scotia and later Ontario that allowed it to continue. Now, he says 85 per cent of the company’s work is for unions, associations, First Nations and by – elections in the two provinces. Even with that he says it is still tough at certain times of the year noting, “There is no action during summer” and the two provinces, Nova Scotia and Ontario have elections every four years.

Which led him to turn to municipal elections and last month Intelivote was selected by Sarnia to provide electronic voting in 2018. Smith’s company, however, was not the low bidder.

It turns out the low bidder was a much larger company with an extensive background in 1200 jurisdictions in Canada and the United States. Dominion Voting Systems of Toronto bid $112,487.15, nearly $18,000.00 less than Intelivote.

Dominion’s web site says it has 95 employees and the integrity of its electronic systems has never been jeopardized.

Smith told First Monday his company has eight employees (some are part time or work occasionally) and has conducted hundreds of elections. He works with other providers and like Dominion has never had a breach.

Scytl and an American company Everyone Counts also bid on the Sarnia contract.

Sarnia Clerk Dianne Gould – Brown and Lambton Shores Clerk Nancy Wright – Laking along with other Lambton County Area Clerks invited Smith to discuss electronic voting in Wyoming last fall. There he spoke about his company and promoted Internet and telephone voting in municipal elections. The one-hour presentation stressed the integrity of the electronic systems. “There is little excitement to hack into Canadian elections,” says Smith and that was the message he delivered to municipal officials.

At present Smith says he has contracts with 20 municipalities and expressions of interest from 50 others.

In addition to Sarnia he says Lambton municipalities that attended his presentation would be able to “piggy back on decreased pricing”.

Councillor David Boushy is opposed, expressing concern about security and suggesting public consultation was needed before hiring Intelivote or any other company.

Mayor Mike Bradley first introduced telephone and Internet voting in 2010 and welcomes it now. But he questions the fiscal viability of Intelivote. “When I raised concerns about this company and its history staff knew nothing,” says Bradley. “Basic diligence on such an important bid to change the electoral system demands a much higher standard”.

Bradley adds, “The other disturbing part of this contract was at no time was the public given an opportunity to comment on this massive change to their electoral system”.

Smith predicts phone and electronic voting will increase interest and turnout in Sarnia. “We saw that in 2014 in Ajax,” says Smith. “There was a 20% jump with electronic voting and the demographics show seniors flocked to the polls”.

He adds, “Convenience is a huge factor. A voter can watch a hockey game on a smart phone and with a personal identification number and a birth date still vote”.

Bradley says he welcomes change, welcomes accessibility but is concerned about “this contract with this company”.

He voted against Intelivote. So did David Boushy and Councillor Andy Bruziewicz.

Councillor Mike Kelch says he wasn’t aware of Intelivote’s financial issues when he voted in favour of the company. “Staff develops the reports and a vote is made. I assume this company was chosen because staff felt it was the most likely to deliver”.

In her report Dianne Gould – Brown recommended Intelivote, the only company to make a presentation to Lambton and area Clerks and municipal officials.

Gould – Brown told First Monday she was aware of Intelivote’s legal problems with the Atlantic Canada Opportunities Agency but was unaware that payments hadn’t been made.

Gould – Brown says Sarnia decided to go with Intelivote because it had “better scoring on security” and offered help desks. She added, “we have staff that is new to the process and we rely on the vendor for assistance”.

City manager Margaret Misek – Evans says Dominion offered to provide staff support but didn’t put that forward until after a decision was made.

Sarnia could have asked for a bid surety to protect itself but didn’t.

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