The Diebold Takeover: Not Hostile, Just Cheap and Dangerous

On March 3, United Technologies Corporation (UTX – $68.55) offered to take over Diebold Corporation (DBD – $37.27), makers of the infamously tamperable voting machines.
Diebold
Photo:The Shifted Librarian, Creative Commons, Flickr

The offer, variously described as “public” and a “hostile takeover,” suggested a price of $2.63 billion, or $40 a share. Diebold stock sold for $24.12 on February 29. The truth is, the offer was not hostile. Diebold’s CEO and board simply deemed it insufficient payback for their years of rigging America’s elections and wanted a bigger Golden Parachute to escape the eventual fallout.


A short history of UTX shows it started out in 1929 as United Aircraft and Transport Corporation via a merger, was divested as United Aircraft and changed its name to United Technologies in 1975. It is composed of seven divisions: Carrier (HVAC and refrigerants), Hamilton Sundstrand (commercial and military aircraft operations systems), Otis – the infamous elevator contractors whose World Trade Center (WTC) elevators failed on 9/11, delaying fire and rescue, and one of three contractors who built the WTC, Sikorsky (military helicopters), Pratt & Whitney (aircraft engines), UTX Power (fuel cells and power generation), and UTX Fire & Security (Chubb and Kidde fire extinguishers). UTX offers some commercial products, but is clearly hip-deep in the defense industry.

UTX supports the Republican Party, the engine of the defense industry. In 2004, UTX gave a total of $789,561, or 64 percent of its campaign funding, to Republicans. UTX’s board contains a number of highly prominent, former Bush administration members, among them General Richard Myers of the Joint Chiefs of Staff. Presidential hopeful John McCain’s campaign manager, Rick Davis (Davis, Manafort Inc.), is also a lobbyist for UTX. McCain’s former manager, Terry Nelson and strategist John Weaver resigned over policy issues – namely the fact that Davis’ company, 3eDC (a web services company) had been retained by McCain’s committee. Davis also represented SBC and Comsat in their controversial (and possibly illegal) 2000 merger. McCain was then chairman of the Senate committee which oversaw FCC approval of that merger. At the time, Davis was also McCain’s campaign manager in McCain’s failed bid for the presidency in 2000. The good old boy ties run long and deep on Capitol Hill, particularly on the Republican side.

Diebold Election Systems is now PREMIER Election Systems. Facing investigation in 2006 by the Securites and Exchange Commission (SEC) for possible insider trading, and the Department of Justice for its accounting practices, its CEO Walden O’Dell, resigned and the company relabeled itself to escape further criticism and scrutiny. In 2007, the Diebold name was further corrupted by a revelation that it had deleted Wikipedia entries criticizing its Republican funding and products. Until the UTX announcement, Diebold stock had been falling, and the company planned a 5 percent layoff. After the bid, stock soared 60 percent. They can call themselves anything they like. To the American people, they are still Diebold, the shadow arm of a government bent on stealing elections.

The surge in stock price was the positive side. On the negative side, once the takeover news broke, a number of pension funds divested their holdings in UTX, among them the Ohio Election Justice Campaign (OEJC), which denounced UTX as a military-industrial conglomerate. The OEJC further advised all pension fund holders to divest their portion of UTX shares. New York state has since demanded transparency in these funds (from UTX and others), and UTX has purportedly agreed to divulge how much it gives to political candidates. Other pension funds will likely follow, since the Diebold name now represents an upside-down flag to American voters.

In a report published March 17, Financial Trader forecast that the proposed UTX takeover of Diebold (DBD), one of the largest makers of voting machines, would likely to be successful, especially as "UTX derives roughly 15% of its revenue from Civilian Security Systems”. A pundit was quick to add that he agreed, and the merger – when completed – likely spelled a 2008 election takeover by said military-industrial complex. If you know your history, you know that former president Dwight D. Eisenhower warned against this complex as far back as WWII, when he was commanding general of the US Armed Forces.

The UTX-Diebold merger, if approved, would ultimately deprive you and I of our last, useful strength in this tattered economy – the power to make change through our vote. Don’t let UTX take over Diebold. If it does, convince your corporation to divest its pension fund from UTX, sell your shares and suggest others do the same. Last, share your concerns with your elected representative.

Disclosure: I don’t own stock in either Diebold or UTX.


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