NEBRASKA | 1996 & 2002 | U.S. Senate

Voting Executive Declared Winner on machines Installed by His Company

Chuck Hagel went from a voting machine company to a seat in the Senate—and later the Pentagon—with no way to verify the votes. He failed to disclose his stake in the company to the Senate Ethics Committee.

OVERVIEW

  • Conflict of Interest: Voting machine executive Chuck Hagel achieved surprising election results on technology produced by his company.
  • Ethics Violation: Hagel disguised his ownership of Election Systems & Software from the public, contrary to Senate disclosure requirements.
  • Suspicious Results: A political newcomer, Hagel won large, shocking upsets over established Nebraska politicians.
  • No Accountability: Bad election law allowed only a meaningless recount using the same machines, when a hand count could have verified the results.

Why would someone who owns a voting-machine company want to run for office? It’s like the fox guarding the hen house.
— Charlie Matulka (Chuck Hagel’s 2002 opponent)

SUSPICIOUS RESULTS

Despite having no political experience, Chuck Hagel defeated Nebraska attorney general Don Stenberg by 25 percent in the Republican primary. He went on to defeat Governor Ben Nelson by 15 percent in the general election, despite an Omaha World-Herald poll showing a dead heat.

Stenberg and Nelson had both won convincingly in 1994.

 

CONFLICT OF INTEREST

Prior to announcing his candidacy, Hagel had been CEO of the company that counted the votes in his election—American Information Systems. Now known as Election Systems & Software, half of America’s votes are counted on its machines.

 

ETHICS VIOLATION

Hagel hid his salary and stock from the Senate Ethics Committee. Hagel still owned ES&S through its parent company, the McCarthy Group, where he had been president prior to running AIS.

His stock was worth millions. Hagel disguised his stake in the McCarthy Group by listing it in a category typically used for mutual funds.

 

NO ACCOUNTABILITY

This conflict of interest was brought to light by Chuck Hagel’s opponent in the 2002 election, but the Senate Ethics Committee stonewalled him. Hagel’s staff pressured a journalist to spike his story on these violations, but the journalist refused.

A recount of the 2002 Senate race could have verified the results, but bad election law in Nebraska made hand counting the paper ballots impossible. The ballots could only be run through the AIS scanners again.


Hagel’s unrecorded stake in the voting systems company poses an apparent conflict of interest on election reform issues.
— Alexander Bolton, The Hill

BIBLIOGRAPHY

Why We Need Disclosure of Owners,” by Bev Harris, Black Box Voting, chapter 3. This key piece of investigative journalism uncovered the story of Chuck Hagel's conflict of interest and misrepresentations to the Senate Ethics Committee.

"Hagel’s ethics filings pose disclosure issue," by Alexander Bolton, The Hill.

"An open invitation to election fraud," by Farhad Manjoo, Salon.

"Diebold's Political Machine," by Bob Fitrakis and Harvey Wasserman, Mother Jones.