Diebold to Settle Calif. Suit for $2.6M
Associated Press   10 November 2004

Automated teller machine maker Diebold Inc. said Wednesday that it will pay the state of California $2.6 million to settle a lawsuit related to its electronic voting machines.

In September, California Attorney General Bill Lockyer joined a suit charging that Diebold sold the state inferior hardware and software that left the vote-count susceptible to hackers and software bugs. California's Alameda County also joined the lawsuit, which was filed last year by a computer programmer. The original suit claimed that the state spent at least $19 million on problem-ridden equipment.

Diebold said the settlement includes $500,000 to create a voter education and poll worker training program together with the University of California Institute of Governmental Studies. The company also agreed to certain technology and reporting standards that will give election officials a better understanding of how to use the election systems.

In October, Diebold reported that costs related to the legal action depressed third-quarter earnings by 5 cents per share. The company has said previously that it expects the litigation to subtract about 1 cent per share from fourth-quarter profit.

Diebold said that California's Alameda and Plumas counties effectively used its machines to record the vote on Nov. 2. Los Angeles county used Diebold machines for early voting.

Diebold shares rose 63 cents, or 1.2 percent, to close at $53.19 on the New York Stock Exchange.