Supplement to News Conference Statement,

Democrat Charlie Matulka the 2002 Nebraska senatorial challenger, reports a conflict of interest for Republican Senator Chuck Hagel. Hagel's campaign officials own 35% of voting machine company Election Systems & Software (ES&S). Hagel is Matulka's opponent, and ES&S is the company whose private vote-counting software will count Hagel's and Matulka's votes. Not long ago Hagel was the election company's CEO. In fact, Hagel was on the Board of Directors of the election machine company whose software counted his own votes when he ran for election in 1996,

• Republican Senator Chuck Hagel's current campaign treasurer, Michael R. McCarthy, runs the McCarthy Group, which currently owns a large percentage of vote-counting company Elections Systems & Software.

• Election Systems & Software, the firm whose machines were involved in the 2002 flubbed Florida primary election - and the company that makes the voting machines that, by the company's own estimates, count the votes in 56% of all election in America - was formerly run by Chuck Hagel himself. Hagel was CEO of the company in 1994, a director in 1996, (when he ran for election), and Hagel was, or is currently, a partner in the McCarthy Group, listed as a 35% owner of Election Systems & Software.

• The McCarthy Group is a privately held company that says it does not have to divulge who owns it - even if one of its owners is running for office, and its own voting machines are counting the votes in the election.

• Election Systems & Software, formerly called American Information Systems, decided to change its name in 1997 when it acquired a competitor (Business Records Corp) and became the largest vote-counting company in America. When American Information Systems changed its name to Election Systems & Software, it retained its ownership and management, though it added new shareholders by giving 20% ownership to people from BRC. The 35% stake by the McCarthy Group is the reported figure after the acquisition of BRC.

(Prove it)
Okay:

1. The Omaha World-Herald 06/03/1994
   "... Chairman of American Information is Chuck Hagel, who also is a partner in McCarthy & Co., an Omaha investment firm... McCarthy & Co. owns about 35 percent."
   See http://www.talion.com/voting-machines.html for a larger excerpt, in context; see Lexis-Nexis or djinteractive.com for full article.

2. McCarthy Group;s own web site: http://www.mccarthygroupinc.com/ - click Portfolio companies to see that they have significant ownership in: Election Systems & Software

3. Name Change: Omaha World-Herald article, 11/20/1997 .. "American Information Systems and the former BRC division will be know as Election Systems & Software"

4. Michael McCarthy's involvement in another voting machine company: 11/22/1996 - the Omaha World-Herald lists Michael McCarthy as chairman of American Information and chairman and CEO of the McCarthy Group.

5. Election Systems & Software own web site: "Election Systems & Software, Inc. (ES&S) is the world's largest election management company." See http://www.talion.com/voting-machines.html for larger excerpt, in context; see Lexis-Nexis or djinteractive.com for full article.

6. Senator Hagel's own web site: http://hagel.senate.gov/Information/bio.htm: "Prior to his election to the U.S. Senate, Hagel worked in the private sector as the President of McCarthy & Company, an investment banking firm based in Omaha, Nebraska."

7. Congressional Quarterly Profile of Senator Hagel (copyright 2000): "http://www.csd.cq.com/senate_mem/s0531.html "President, McCarthy & Co., investment banking firm, Omaha, NE 1992-1996"
   "Board of Directors: American Information Systems, Inc."

8. Michael R. McCarthy, an owner of Election Systems & Software, is an active part of Senator Hagel's campaign staff. Photocopies of FEC documents on the Political Money Line site:
   HAGEL FOR NEBRASKA - Treasurer: Michael R. McCarthy
   HAGEL FOR SENATE COMMITTEE - Treasurer: Michael R. McCarthy
   This site contains hundreds of photocopies of FEC disclosure documents with Michael McCarthy's signature as a current (2002) campaign official for Charles Hagel.

9. Hagel ran for office while his own company was making the vote-counting machines! Congressional Quarterly bio on Charles T. Hagel: "President, McCarthy & Co. 1992 - 1996" Ran for office in 1996, elected United States Senator on November 5, 1996. Congressional Quarterly lists Hagel as a director for voting machine company American Information Systems, with no termination date shown.

Facts About Election Systems & Software (ES&S), and who counts the votes:

1. When voting with paper ballots: The voter feeds the ballot into an automatic counting machine manufactured and programmed by ES&S. In most states, the actual paper ballot is never looked at by humans. The actual ballots are sealed into a box; no one looks at them, and the "official" vote tally is taken directly from the counter on the machine.

   Only if there is a hand recount will the paper ballots be looked at. Usually, there can only be a hand recount if the candidate requests it, usually the candidate must pay for the hand count, and even if the candidate pays for it, a hand count can only be done if it is approved by an election official. Usually the election officials are appointed by the party currently in office. Most "recounts" are done by running the machine again - but if the programming in the machine is not accurate the recount will remain inaccurate.

   ES&S is now pushing vote-counting machines that have no paper trail at all. The new machines in Florida do not use any paper ballots. How convenient!

   Many of the new machines have internal modems that can relay counting information to any party authorized to receive it.

2. Vote-counting is secret: The software codes that will count votes in Nebraska are deemed "proprietary" and only technicians from ES&S are allowed to analyze the codes. Independent auditing of the computer codes can't be performed due to the proprietary staus of the code. Vote-counting companies went to court to have their counting codes declared proprietary.

   "As long as vote tabulating logic remains part of a set of rules known only to the programmer who wrote the software, the votes of every American citizen will continue to be tabulated secretly. Secret vote counting has no place in a democracy." Eva Waskell, 1993

   ES&S sends prototype machines to Wyle Laboratories, which says it verifies the code, many states keep this certified computer counting code in escrow. However, no one verifies that machines voters use to cast their ballots use the same code as that sent to Wyle Labs or held in escrow.

   Programmers from ES&S are in fact sent to each area at election time to specially program the machines that do the counting. The individual programming done at election time is not certified, or reviewed, by anyone.

3. Errors can, and do, occur.

   ES&S has admitted to programming errors that affected the vote-counting. In Hawaii, ES&S had to recount the entire state election because of programming errors. 31 newspapers have reported large errors in ballot printing and vote-counting software programming, in dozens of states, and the voting machine companies themselves have admitted to many of these errors, and many of the errors affected the result. ES&S, Sequoia, and Global Election Systems all document programming errors in both ballot printing and vote counting. (See the reports: http://www.talion.com/election-mistakes.html)

4. Other concerns: Of the three largest election companies, who, combined, count 90% of the votes in America.

   ES&S was founded by Todd and Bob Urosevich, and originally financed by the Ahmanson family, which has poured hundreds of millions into right-wing PACS and radical Christian Reconstructionist movements, and is credited with putting over two dozen conservative Republicans in the California legislature. The Ahmanson family was also involved in investment of another McCarthy Group company, Acceptance Insurance.

   Todd Urosevich is the current Vice President of ES&S. His brother, Bob Urosevich, is the current CEO of a second major voting machine company, Global Election Systems.

   A vice president of ES&S, Tom Eschberger, was entangled in a bribery prosecution regarding voting machines - he took an immunity plea and a Georgia official went to jail. The running mate for Jeb Bush in 1998, Sandra Mortham, was accused of taking kickbacks, getting the state of Florida to replace all its machines with ES&S.

   The third major voting machine company, Sequoia Pacific, uses the same software and machine as ES&S (they signed a licensing agreement to share software and machine design when ES&S bought Business Records Corp.) Sequoia Pacific has had at least two officials in trouble for bribery and kickbacks, one in Louisiana and one in New York City.