The BRAD BLOG can now report that a Securities Fraud Class Action suit has been filed against Diebold, Inc. (stock symbol: DBD) naming eight top executive officers in the company as co-defendants. The suit has been filed by plaintiff Janice Konkol, alleging securities fraud against the North Canton, Ohio-based manufacturer of Voting Systems and ATM machines on behalf of investors who owned shares of Diebold stock and lost money due to an alleged fraudulent scheme by the company and its executives to deceive shareholders during the "class period" of October 22, 2003 through September 21, 2005.

The suit was filed today in U.S. Federal District Court in Ohio and alleges the company "artificially inflated" stock prices through misleading public information designed to conceal the true nature of Diebold's financial and legal situation. The defendants are also alleged to have attempted to disguise well-known and ongoing problems with Diebold's Voting Machine equipment and software. Additionally, the suit alleges insider trading by defendants resulting in proceeds of $2.7 million. Remedies are sought under the Securities Exchange Act of 1934.

The suit, filed by the law firm Scott+Scott, LLC on behalf of Konkol and the plaintiff class, names former Diebold CEO and Chairman, Walden O'Dell as a co-defendant along with seven other current and former officers of the once-venerable company.

News of the pending litigation was first reported as imminent in an exclusive report by The BRAD BLOG late last week.

Yesterday, in a surprise announcement, O'Dell unexpectedly resigned from the company. A Diebold press release described O'Dell as leaving the company for "personal reasons". He was immediately replaced by the company's president and chief operating officer, Thomas W. Swidarski, who had directly overseen Diebold's Election Systems subsidiary division for some time. Swidarski is also named as a co-defendant in today's class action suit.

After news was released of weaker-than-expected third-quarter earnings on September 21, Diebold stock prices plummeted 15.5% in unusually heavy trading that resulted in a one day sell-off costing investors more than $40 million dollars. The complaint describes Diebold and the co-defendants as having "failed to disclose adverse facts known" to the company and that they "participated in a fraudulent scheme and course of business that operated as a fraud."

The suit, to be released in full by The BRAD BLOG shortly, (UPDATE: Full suit now available for download here) alleges Diebold and the eight co-defendants failed to alert investors to adverse facts known to the company, choosing instead to participate in a "fraudulent scheme and course of business" that operated as a fraud or deceit on the company's shareholders.

The suit describes the liabilities of the company and co-defendants as follows...

In all the hubbub that occured this afternoon vis a vis Diebold, I want to make sure that you folks noticed the previous EXCLUSIVE concerning Conyers and the Downing Street/Iraq business. It's an important story that may have gotten buried by the news about everyone's favorite American Voting Machine company which followed quickly on its heels.

The earlier story we reported is important as it signals that there is much to come from the Judiciary Committee Dems in regard to the use, misuse and/or abuse of pre-war intel. The story was also updated a bit with comments from AfterDowningStreet.org's David Swanson after I originally published. And our sources say there will likely be additional notable headlines along with all of this in the next week or so...So stay tuned...

Diebold, Inc. (stock symbol: DBD) CEO Walden O'Dell has resigned due to what company officials describe in a press release as "personal reasons". Reuters is reporting that O'Dell will be replaced by the company's president and chief operating officer, Thomas Swidarski.

As The BRAD BLOG reported exclusively late last week, the filing of a securities fraud class action litigation against the company, O'Dell and other current and former members of their Board of Directors is now imminent. The BRAD BLOG has learned that the case may be filed in Ohio Federal District court as early as today or tomorrow. We will, of course, have more details when that occurs.

O'Dell has faced a great deal of criticism for his statement to Republican fundraisers, prior to the 2004 Presidential Election, that Diebold he (see correction explanation below) was committed to delivering the electoral vote of the state of Ohio to George W. Bush. O'Dell was part of Bush's "Rangers and Pioneers," a group of individuals who had raised at least $100,000 each for Bush/Cheney's 2004 re-election campaign.

In the wake of the controversy concerning O'Dell's involvement with the Bush/Cheney campaign, a corporate policy was instituted to disallow involvement in political campaign by senior executives at the company. A report in the Cleveland Plain-Dealer late last week, however, revealed that several Diebold executives had continued to donate to GOP campaigns even after the policy was enacted. The new CEO, Swidarski appears to have given the maximum allowable $2000 contribution himself to George W. Bush's campign in 2004.

Diebold, along with Election Systems & Software, Inc. (ES&S) are the two largest Voting Machine Companies in America. Between them, they account for equipment which tallies more than 80% of America's votes.

The North Canton, Ohio-based company has faced several recent financial and upper-level management problems. A recent plummet of 15.5% in the once-venerable company's stock price occurred just days after another BRAD BLOG exclusive in which we reported on a company insider, dubbed "DIEB-THROAT", who had drawn comparisons in the companies management to the now-bankrupt Enron.

A source (not DIEB-THROAT) familiar with the company is intrigued by the news and expressed amazement that O'Dell is stepping down as both CEO and Chairman of the Board. "This was his baby," commented the source to BRAD BLOG. The source suggests this move "has the earmarks of an internal coup d'etat" given the dearth of other explanations beyond "personal reasons" as given by the company for O'Dell's departure.

As we reported last Thursday in our exclusive concerning Diebold's mounting legal problems, the company has been plagued by such issues for some time.

A "Privileged and Confidential" document [PDF] from Diebold's law firm Jones Day was leaked to the Oakland Tribune last year revealing the companies legal fees for just one two month period in the state of California were estimated at $535,000 - $925,000. The document discussed costs related to a $2.6 million dollar settlment the company eventually reached with the state, and outlined fees for "legal analysis of potential criminal violations," "White collar criminal law attorney pre-grand jury investigative advice" and even costs to "Monitor selected Web sites to gain key intelligence."

Our source, DIEB-THROAT was not surprised to hear of the pending litigation. "I am not surprised that such a lawsuit has developed [as] the company consistently offered Wall Street deceptive information."

The BRAD BLOG has been told there will be details on the litigation within the next 24 hours. We will, of course, report all such developments once they are confirmed.

CORRECTION: A reader correctly pointed out that O'Dell promised that he, not necessarily his company, Diebold, as we originally reported, was committed to delivering the state of Ohio to George W. Bush in the 2004 election in his now-infamous fundraising letter to Republicans. More details here on that letter, here....

The BRAD BLOG has learned that the "Conyers for Congress" committee has registered a series of Internet domain names that may suggest a forthcoming report based on ongoing investigations held by the Ranking Minority member of the U.S. House Judiciary Committee. The domain names, including dsmreport.com, dsmreport.net, iraqreport.net, thedsmreport.com, thedsmreport.net, theiraqreport.com and theiraqreport.net are all set for automatic re-direction to Rep. John Conyers (D-MI) personal campaign website, JohnConyers.com.

Conyers had led hearings earlier this year concerning the so-called "Downing Street Documents", a series of leaked memos from high-level British officials revealing the Bush Administration's determination to topple Saddam Hussein via military means, concluding that "the intelligence and facts were being fixed around the policy," according to the officials after meeting with the Bush Administration. All of that, even as the Administration was telling both Congress and the American people that they were working toward a diplomatic solution to the Iraq situation.

Those hearings on the "Downing Street Documents" have become known as "the basement hearings", since they were held in a small room in the basement of the U.S. Capital Building after Republican lawmakers refused to give Democrats on the Judiciary Committee access to a regular Congressional hearing room. On the same day the hearings were held, June 16th of this year, GOP House Leadership scheduled a record number of votes in the chamber in an attempt, as several Democrat lawmakers have charged, to disrupt the basement proceedings, which were carried live at the time by C-SPAN.

Conyers staffers have no on-the-record comment at this time regarding the intended use for the recently registered domain names. Information on the registration records for the domains has been protected, so The BRAD BLOG was unable to determine the exact date of registration.

John Conyers' and his Judiciary Committee staff had previously released a landmark 100+ page report on the irregularities that marred the 2004 Presidential Election debacle in the state of Ohio. That report was given to all House and Senate lawmakers on the day the Electoral Votes from the Buckeye State were debated in an historic constitutional challenge to the validity of the results of the November 2004 elections in that state. Despite having access to Conyers' detailed report, many lawmakers claimed on the floor of Congress, during the debate of the Electoral Challenge, that "there was no evidence" to suggest anything had gone wrong in Ohio's much-maligned 2004 election, resulting in the seating of Electoral College Voters for George W. Bush.

MORE...David Swanson, co-founder of AfterDowningStreet.org comments to BRAD BLOG: "When Congressman Conyers and his brilliant staff release an analysis of the lies that launched this war, it will be the first draft of a history that our media has been more an actor than an analyst in. This report should light up the internet brighter than an oil fire!"

More information on the registration of the domain names was obtained by Ron Brynaert. It appears that the domains were all registered on either December 9th or 10th (last Friday and Saturday) of this year.

According to Matthew Cardinale of Atlanta Progressive News, 5 US senators and 13 members of the House of Representatives have now called for a probe of the Department of Justice in light of two recent cases where political appointees have overruled the recommendations of professional staff attorneys in giving preclearance to new electoral laws which fall under the jurisdication of the Voting Rights Act of 1965.

Among the legislators exploring the possibility of congressional inquiry is Senate Judiciary Committee chairman Arlen Specter (R-PA).

Not listed in Cardinale's report of those calling for the probe is Rep. John Conyers (D-MI), the ranking minority member of the House Judiciary Committee. Conyers announced he will request House Judiciary chair James Sensenbrenner (R-WI) to schedule hearings, in a press release issued on the same day that Washington Post's Dan Eggen first broke the story of a 73-page DoJ memo, that revealed eight staffers, including the lead attorney in the Voting Rights department, had unanimously recommended against approval of the now-infamous 2002 redistricting of the Texas congressional map.

Previously, Eggen had reported on another leaked memo from DoJ, revealing that four out of five DoJ staffers had recommended against preclearance for a new Photo ID requirement at the polls in the state of Georgia. In that case, Bush's attorney general also ignored the staff recommendation and allowed the law to move forward without objection. Section 5 of the 40 year-old Voting Rights Act mandates that certain states with a history of disenfranchisement must receive pre-approval from the DoJ for new electoral laws which could disproportionately effect minorities in those states. The Georgia law was later found to be unconstitutional by two Federal courts, who found the law to be the equivalent of a "Jim Crow-era poll tax."

The Texas redistricting case faces court challenges ahead, and one hill insider explained to The BRAD BLOG that "some of this stuff is on such shaky legs, [the Justice Department] may find themselves embarrassed in some of these cases." UPDATE: The Supreme Court has now agreed to hear a challenge to the Texas redistricting case.

"We're talking about areas where the Justice Department is supposed to be a safety valve, a watchdog. Without that, you have the abilitity to have states that can disenfranchise voters with little redress for the minority voters in those states," the staffer explained.

It looks as though Saudi princes may now be buying their way into the good graces of news organizations --- or at least into Rupert Murdoch's FOX "News" channel and other Murdoch-owned outlets as reported by FrontPage Magazine, a rightwing website:

(Hat tip RAW STORY)

This is only a test. Please ignore.

Will be erased shortly.

(Hat tip YesButNoButYes)

The folks at DU are talking about this caller to O'Reilly's Radio Factor on Friday claims to have refused a tip to a waitress after she said "Happy Holidays" at the end of the meal.

Here's the audio clip [MP3] (it's just about two minutes).


What are your thoughts?

UPDATE: Eric Jaffa at SpeakSpeak says the call reveals O'Reilly as a "flip-flopper" for contradicting his own previous statements about "Happy Holidays".

ADDENDUM: Larisa has some serious thoughts on the threat O'Reilly's silly campaign poses to this country in an open letter at HuffPo.

To protest what Free Press investigative reporters describe as a "holiday burial for American Democracy" in the Buckeye State, Ohio divinity student and Columbus resident, Jonathan Meier is continuing his prayer vigil and hunger strike at the Ohio Statehouse despite heavy snow and brutally cold winter temperatures.

House Bill 3 has already passed the House and is about to be approved by the Republican-dominated Senate in the ground-zero snakepit of GOP political corruption otherwise known as Ohio.

Activist Meier, in a just-issued press release says "that his Christian faith calls him to 'constantly pursue social justice and illuminate social ills, and, often, this call requires personal sacrifice."

Free Press' Bob Fitrakis and Harvey Wasserman recently described the latest onslaught to democracy in Ohio, which Meier is protesting, this way:

Says Meier, "Most people don't realize that this legislation, if passed by the senate next week, would make it virtually impossible for homeless folks to vote, would make it virtually impossible for groups to register large numbers of voters, would eliminate oversight of voting machines, and would cancel our right to challenge election results."

He added, "Instead of addressing the long lines at the polls, instead of making it easier for people to register and to vote, Republican lawmakers put forward 424 pages of legislation that will set up roadblocks to our democracy. I, for one, do not trust a vote reform bill that is purely a partisan act."

Fitrakis and Wasserman put the Ohio legislation in context for the rest of the country, where similar bills are being explored by various Republican-controlled legislatures:

Richard Pryor, 1940 - 2005

The beloved 40 year-old Voting Right Acts, implemented by Lyndon B. Johnson after violence and death to Voting Rights activists in Selma, Alabama in 1965 has been all but gutted by the George W. Bush administration. The VRA celebrated it's 40th anniversary this summer, even as Bush's Department of Justice was destroying one of its most important measures by covert political caveat.

That gutting now appears to be becoming a still greater threat to our democracy as it is being institutionalized by recent policy changes which bar career Voting Rights staffers and attorneys in the DoJ from offering opinions on new laws that fall under the jurisdication of the VRA.

Two recent reports by Dan Eggen of the Washington Post revealed that Bush political appointees in the DoJ has overruled the recommendations of career staffers and attorneys in the Voting Rights division tasked with determining the legality of two separate laws sent to the department for "pre-approval" under Section 5 of the Voting Rights Act.

Section 5 requires that states with a history of discriminatory election practices --- like Texas and Georgia --- must receive pre-approval from the DoJ before implementing any changes to their voting systems. It prohibits "retrogressive" changes to voting laws, or laws that would bring harm to minority voters.

In the last several weeks Eggen has reported on remarkable memos leaked by DoJ staffers showing that they had recommended against approval of new laws both in Georgia, where the legislature had insituted a new Photo ID requirement at the polls, and in Texas, where then Majority Leader Tom DeLay (R-TX) had helped to redistrict the state to allow for more Republican representatives after the GOP gained control of the state house in 2002.

Georgia's law has since been ruled unconstitutional by two Federal Courts who deemed the law to be a "Jim Crow-era Poll Tax". Texas' law has resulted in 7 additional Republicans in the U.S. House of Representatives. The fallout from the DeLay led gerrymander of Texas districts has resulted in several indictments for DeLay and his cronies who helped force it through the legislature and allegedly conspired with the Republican National Committee to launder money in support of GOP candidates running for the new seats. The Texas law, which had been unanimously recommended against by 8 DoJ staffers, including the lead attorney in the Voting Rights Act division, still stands.

Today Eggen reports that such staff opinions are now completely banned in Bush's Department of "Justice"!

The one ray of hope that Eggen offers is that Sen. Arlen Spector (R-PA) is considering Senate Judiciary Committee Hearings...at least on the Texas redistricting case.

We often bristle when we hear those on the Left criticize the Bush Administration as Fascistic. It's simply too easy to ascribe to them the worst possible traits as a blunt political weapon. But if the issues discussed above don't send a shiver down the spine of every democracy-loving American it's either because they don't understand what's actually at stake --- and being dismantled in the process --- or they simply don't give a damn about this country's most important legacy to the world: A free and fair electoral system where all citizens are given an equal voice in the selection of our leaders...or at least a system as close to that as we can possibly muster.

Our Republic is in grave danger.

Less than 16 hours after Bob Harris posted about Bill O'Reilly's disingenuousness on his own website, his crew made the obligatory attempt to send yet more evidence of their own hypocrisy down the memory hole...Harris made sure that didn't happen...

(Previously, the Fox "News" website was caught off guard as well, and had to scramble to change the ads for "Holiday Ornaments" in the Fox "Holiday Store" in order to meet the new stringent requirements for their hilarious-were-it-not-so-pathetically-transparent "War on Christmas". Nah, on second though, it is simply hilarious! Happy Holidays!)

The BRAD BLOG has received exclusive detailed information about a developing potential class action securities litigation against Diebold, Inc. (stock symbol: DBD). The class for the suit will involve shareholders who purchased or owned stock in the Ohio-based company any time from October 22, 2003 through September 21, 2005.

Though we are not at liberty at this time to discuss the specifics of the potential litigation and the causes of action in the complaint being compiled, The BRAD BLOG has learned that the class action lawsuit, currently being drawn up, will involve securities fraud violations and other troubling matters for the controversial company, its CEO as well as current and former members of its Board of Directors.

VelvetRevolution.us (an organization co-founded by BRAD BLOG managing editor, Brad Friedman) is seeking additional individuals and groups who may qualify as plaintiffs in the specified class. Those who owned or purchased Diebold stock, or mutual funds which carried Diebold during the period mentioned, are asked to contact LawSuit@VelvetRevolution.us where information submitted may be turned over to attorneys for possible addition to the plaintiff class.

Union groups who own or owned shares of Diebold or mutual funds which invest in the company are specifically urged to contact VR about joining the class action.

The mutual funds which are most heavily invested in Diebold are listed here. Information on "Insider Transactions" is listed here.

Diebold, Inc. is the controversial Voting Machine and ATM manufacturer who was recently compared to Enron by an anonymous company insider The BRAD BLOG dubbed "DIEB-THROAT" in a series of exclusive reports. The Internet news site, RAW STORY ran a new exclusive interview with DIEB-THROAT yesterday revealing additional details on the inner-workings of the company and potential legal issues they may face.

Shortly after our first report on DIEB-THROAT, Diebold's stock price plummeted some 15.5%. The company attributed their troubles at the time to shortfalls in the wake of Hurricane Katrina and on the same day announced the resignation of their chief operating officer (COO) and President, Eric C. Evans. Our source, DIEB-THROAT, challenged the company's response to the falling stock prices in the wake of lower than expected earnings by suggestion that "Using Hurricane Katrina is a poor excuse for bad products - the last time this kind of deception occurred it was called Enron."

Diebold CEO Walden O'Dell has come under harsh criticism for his statement to Republican fundraisers that Diebold he (see explanation for correction below) was committed to delivering the electoral vote of the state of Ohio to George W. Bush prior to the 2004 Presidential Election. O'Dell was part of Bush's "Rangers and Pioneers," a group of individuals who had raised at least $100,000 each for Bush/Cheney's 2004 re-election campaign.

As well, the company has been facing other mounting troubles, legal and in the court of public opinion, over their implementation of software, hardware and various Elections Systems contracts around the United States as has been reported in have charged the company may be in violation of a court order stemming from that agreement. In North Carolina, Diebold recently lost an attempt in the court system to receive exemption from parts of a state law requiring the escrow of their voting system's software source code. They were certified anyway the next day in North Carolina, and some activists have questioned whether or not the certification was done according to state law and whether or not new legal proceedings may be launched there. And in California, a debate rages on concerning the possible re-certification of Diebold's touch-screen voting machines here after some 20% of their machines failed in a recent mock election test.

According to internal "Privileged and Confidential" documents of "Attorney Work Product" originally obtained and reported by Ian Hoffman of The Oakland Tribune in 2004, an estimate of legal costs in California for the Voting Machine giant was pegged by their attorneys at $535,000 - $925,000 for just a single two month period in order to fight mounting legal troubles in the state. Diebold's law firm, Jones Day fought in Los Angeles County Superior Court to keep those leaked memos from being further circulated.

The document estimating legal expenses [PDF] lists costs in regard to the Qui Tam Action filed (and eventually settled) by election watchdogs at BlackBoxVoting.org, the costs for fighting "Criminal Exposure" such as "legal analysis of potential criminal violations" and "White collar criminal law attorney pre-grand jury investigative advice" and even costs to the firm to "Monitor selected Web sites to gain key intelligence."

Concerning the potential of a new lawsuit against the company, DIEB-THROAT is not surprised, and expressed hopes to The BRAD BLOG in a recent email that some good may come from the possibilities of upcoming litigation:

"The denial of every documented problem with Diebold's voting system was bound to unravel sooner or later. I am not surprised that such a lawsuit has developed [as] the company consistently offered Wall Street deceptive information. Perhaps with the help of few patriotic plaintiffs our nation will be saved from Diebold's corporate takeover of our right to vote - and have that vote counted free from corporate and political influence."

The BRAD BLOG will, of course, continue to follow this story as it develops...

UPDATE 12/12/05: Diebold CEO, Walden O'Dell resigns in wake of imminent fraud litigation! MUCH MORE...

CORRECTION: A reader correctly pointed out that O'Dell promised that he, not necessarily his company, Diebold, as we originally reported, was committed to delivering the state of Ohio to George W. Bush in the 2004 election in his now-infamous fundraising letter to Republicans. More details here on that letter, here....

Sources tell The BRAD BLOG that The Daily Show on Comedy Central will be running an item tonight on self-proclaimed satirical journalist Bill O'Reilly's use of a year-old video clip to support his phony "War on Christmas" as originally reported here on Sunday.

Our report was picked up by MediaMatters.org yesterday. We had reported on O'Reilly's use of the clip in his "Talking Points Memo" segment on Fox "News'" The O'Reilly Factor program last Friday and Media Matters added that O'Reilly had also run the same clip by Daily Show "correspondent" Samantha Bee audio-only on his Radio Factor show earlier that day where he misleadingly introduced it as "what happenened there last night" on Comedy Central.

BRAD BLOG's original report has the video and discusses O'Reilly's phony use of the clip to shore up momentum in his imaginery "War on Christmas". The video clip clearly shows a calendar for 2004 behind Bee who is also currently very pregnant --- which she wasn't in the clip. As well, Media Matters confirmed our report that the segment had not been played on The Daily Show at any time during the previous week contrary to O'Reilly's assertion.

UPDATE: The Daily did, in fact, run a piece on this as we predicted. A very funny one. The clip is now available right here...