Cronyism: Lawmakers Offer NC Ballot Printer/Equipment Monopoly More ‘Protection’

RALEIGH – One of the best kind of contracts a business can secure is contract with government. Government has taxing authority, and thus makes it a good paying customer. Additionally, if you have friends in government, you just might be able to get protections on that contract enacted into law, discouraging competition and locking in future, guaranteed profits.

This happens far more often than we’d like to think, but in recent years this kind of cronyism has been appropriately cast as unethical and un-American. The power of pull should have no place in a free society overseen by limited government.

Alas, a prime example of cronyism is baked into Senate Bill 486, dealing with elections.

Specifically, the provision of the bill in question regards a rules for any vendor awarded a contract to print election ballots, and/or the provision of electronic voting equipment and voting systems software.

“SECTION 3.6A. G.S. 163A-1115(a)(1) reads as rewritten:
“(1) That the vendor post a performance bond or letter of credit to cover damages resulting from defects in the voting system.system, expenses associated with State or federal decertification of the voting system, and to protect against the vendor’s insolvency or financial inability to make State or federally mandated modifications or updates to the voting system. Damages may include, among other items, any costs of conducting a new county or statewide election attributable to those defects. The bond or letter of credit shall be maintained in the amount determined by the State Board as sufficient for the cost of a new statewide election or in the amount of ten million dollars ($10,000,000), whichever is greater.“

A $10,000,000 bond required to print ballots in North Carolina? Do the lawmakers on Jones Street expect a a statewide election “re-do,” or is something else afoot?

Turns out there is one company that sells the voting equipment to all 100 counties, prints ballots for 86 counties, provides equipment maintenance services, and programs the machines that count the votes cast.

That company is actually a few companies all owned by the same holding company, Owen G. Dunn, and run by brothers, Owen and Andy, whose family has been in the state contract printing business for more than 100 years.

Printelect and Election Systems & Software, held by the Owen G. Dunn Company, can afford to secure a $10 million bond. But such a bond would is likely out of the price range for any upstart or smaller printing concerns, and that is exactly the point – by passing this new requirement, lawmakers are snuffing out potential competition to Owen G. Dunn before they even pose a threat.

The Daily Haymaker, always with a well-placed source secured their own inside scoops regarding the changes to statute:

“Said one of my sources:

“They are the only folks in the game who can afford to pony up that much money up-front. The bond doesn’t need to be that high. What are the odds of having to do a whole new election statewide? I can see a handful of precincts or a few counties. Competition benefits the taxpayers. It provides options and drives down costs. This slams the door on any possible competition.”

As a comparison, Virginia only requires a bond of $10,000 per line of equipment. In other words, ten grand gets you in the game in The Old Dominion. TEN MILLION gets you a seat at the table in The Tarheel State.”

Having been in the state contracts game for a century, this company and its owners have become quite adept at making political donations to those in power. And when the pwer changes hands, the money flow follows.

From Civitas, on Owen Andrews, who heads sales for the company:

“…when it comes to campaign contributions, Andrews definitely knows where his bread is buttered. Except for contributions to former state legislator Republican Jean Preston, who was a member of the Joint Select Committee on Electronic Voting Systems, Andrews had never contributed to a Republican until September 2, 2011 when he contributed $250 to the Committee to Elect Thom Tillis. Tillis became Speaker of the North Carolina House of Representatives in 2011 after the Republicans had won a majority in both legislative houses for the first time in history. In September of 2011, Tillis had just completed his first session as Speaker of the State House.”

Now Andrews, through his companies, greases the palms of leadership and seems it seems to pay dividends in the form of protection for the printing monopoly. Beyond the $10 million bond requirement that is poised to pass the legislature, the select lawmakers have previously come under fire for intervening in legislation to ensure that wasteful laws remained on the books just so the cronies could continue printing profits.

Providing a de facto monopoly to one business and then using the state’s lawmaking power to protect that business from competition is a disservice to the people of North Carolina and an insult to our hard earned tax money. If anything, the process should be opened up to competition to insure the taxpayers are getting their money’s worth, as well as inviting opportunities for more innovative and secure vendors to present themselves.

Read more about the long history Owen G. Dunn company here, and more about the questionable influence they have on lawmakers in order to line their own pockets here.