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In late July, the House and the Senate overwhelmingly approved legislation to expand the committee’s scope, give a greater role to the office of the director of national intelligence and strengthen Congressional oversight of the review process.
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But the Bush administration opposed major changes, and Congressional leaders did not act to reconcile the two bills before Congress adjourned.
Foreigners seeking to buy American companies in areas like defense manufacturing typically seek the committee’s review themselves before going ahead with a purchase. Legal experts said it would be highly unusual for the panel to investigate a transaction like the Sequoia takeover, and even more unusual for the panel to try to nullify the transaction so long after it was completed.
It is unclear, moreover, what the government would need to uncover about the Sequoia sale to take such an action.
The investment committee’s review typically involves an initial 30-day examination of any transactions that might pose a threat to national security, including a collective assessment from the intelligence community. Should concerns remain, one of the agencies involved can request an additional and more rigorous 45-day investigation.
In the case of the ports deal, the transaction was approved by the investment committee. But the Dubai company later abandoned the deal, agreeing to sell out to an American company after a barrage of criticism by legislators from both parties who said the administration had not adequately reviewed the deal or informed Congress about its implications.
The concerns about possible ties between the owners of Smartmatic and the Chávez government have been well known to United States foreign-policy officials since before the 2004 recall election in which Mr. Chávez, a strong ally of President Fidel Castro of Cuba, won by an official margin of nearly 20 percent.
Opposition leaders asserted that the balloting had been rigged. But a statistical analysis of the distribution of the vote by American experts in electronic voting security showed that the result did not fit the pattern of irregularities that the opposition had claimed.
At the same time, the official audit of the vote by the Venezuelan election authorities was badly flawed, one of the American experts said. “They did it all wrong,” one of the authors of the study, Avi Rubin, a professor of computer science at Johns Hopkins University, said in an interview.
Opposition members of Venezuela’s electoral council had also protested that they were excluded from the bidding process in which Smartmatic and a smaller company, the Bizta Corporation, were selected to replace a $120 million system that had been built by Election Systems and Software of Omaha.
Smartmatic was then a fledgling technology start-up. Its registered address was the Boca Raton, Fla., home of the father of one of the two young Venezuelan engineers who were its principal officers, Antonio Mugica and Alfredo Anzola, and it had a one-room office with a single secretary.
The company claimed to have only two going ventures, small contracts for secure communications software that a Smartmatic spokesman said had a total value of about $2 million.
At that point, Bizta amounted to even less. Company documents, first reported in 2004 by The Herald, showed the firm to be virtually dormant until it received the $200,000 investment from a fund controlled by the Venezuelan Finance Ministry, which took a 28 percent stake in return.
Weeks before Bizta and Smartmatic won the referendum contract, the government also placed a senior official of the Science Ministry, Omar Montilla, on Bizta’s board, alongside Mr. Mugica and Mr. Anzola. Mr. Montilla, The Herald reported, had acted as an adviser to Mr. Chávez on elections technology.
More recent corporate documents show that before and after Smartmatic’s purchase of Sequoia from a British-owned firm, the company was reorganized in an array of holding companies based in Delaware (Smartmatic International), the Netherlands (Smartmatic International Holding, B.V.), and Curaçao (Smartmatic International Group, N.V.). The firm’s ownership was further shielded in two Curaçao trusts.
Mr. Stoller, the Smartmatic spokesman, said that the reorganization was done simply to help expand the company’s international operations, and that it had not tried to hide its ownership, which he said was more than 75 percent in the hands of Mr. Mugica and his family.
“No foreign government or entity, including Venezuela, has ever held any stake in Smartmatic,” Mr. Stoller said. “Smartmatic has always been a privately held company, and despite that, we’ve been fully transparent about the ownership of the corporation.”
Mr. Stoller emphasized that Bizta was a separate company and said the shares the Venezuelan government received in it were “the guarantee for a loan.”
Mr. Stoller also described concerns about the security of Sequoia’s electronic systems as unfounded, given their certification by federal and state election agencies.
But after a municipal primary election in Chicago in March, Sequoia voting machines were blamed for a series of delays and irregularities. Smartmatic’s new president, Jack A. Blaine, acknowledged in a public hearing that Smartmatic workers had been flown up from Venezuela to help with the vote.
Some problems with the election were later blamed on a software component, which transmits the voting results to a central computer, that was developed in Venezuela.
