US probes Chavez link to US voting machine firm-NYT

WASHINGTON, Oct 29 (Reuters) The US government is probing whether a takeover last year of a leading US voting machine maker by a software company with links to Venezuela gave President Hugo Chavez's leftist government control over its operations, the New York Times reported on Saturday.

The Committee on Foreign Investments in the United States, a multi-agency panel that approves or rejects foreign takeovers, is conducting a formal inquiry into Smartmatic Corp and its subsidiary Sequoia Voting Systems, which is based in Oakland, Calif, the Times reported in its online edition.

Smartmatic and the Venezuelan government officials have strongly denied that Chavez -- a longtime foe of the Bush administration -- has any role in Smartmatic, the Times said.

A US Treasury Department spokeswoman declined to comment in the Times story on whether CFIUS was conducting a formal probe, but did confirm the panel had contacted the company.

Venezuela hired Smartmatic to replace its election machines ahead of the August 2004 referendum that tapped Chavez as president, the newspaper said.

In March 2005, Smartmatic used the 120 million dollars profit from its Venezuela deals to buy Sequoia, which has installed voting equipment in 17 US states and the District of Columbia, it said.

Before that, a Venezuelan government financing agency invested more than 200,000 dollars in a technology company that had some of the same owners of Smartmatic, which joined Smartmatic as a minor partner in the bid.

In return, the Venezuelan agency took a 28 per cent stake in the smaller company and a seat on its board of directors, the Times said. An unnamed, senior Venezuelan official who had previously advised Chavez on election technology occupied the board seat.

REUTERS SP VV0938