In my blog in February of this year, I mentioned that Diebold was looking to get out of the business of elections. After all, that division is less than 9% of their revenue and about 99.99% of the negative publicity. If you do the math, you come to the same conclusion.

But, naturally, they couldn’t find any buyers and why would they? Most of the money selling machines has been made. There is nothing but controversy and turmoil ahead (think about what is happening in California). So what has Diebold done? It has spun the unit off on its own--sort of. The former Diebold Election Systems is now Premier Elections Solutions. It is an "independent structure" for the former unit.

This is good and bad. It’s good for Diebold in that as time goes by there will be less and less association between "Premier" and Diebold. But much of this probably won’t go away as long as they still own it.

Still, one can hear some Diebold-loyal election administrators telling their citizens that they don’t own or use the Diebold stuff--we use "Premier Election Solutions" products. Give me a break with that one.

You used to hear the old Global people complain that the Canton people (i.e. the ATM folks) just were too rigid and didn’t really understand the election industry. In that sense, if they can operate independently it might turn out better than it has. Obviously after the Wally O’Dell remark, the corporate types up there realized that you can’t assume this is some easy, trivial, line of business. It’s very high profile and the stakes are quite high. So if some of the ATM gear heads get away from this, it might be better. But then again, it might not.

But it’s also bad if Premier tries to have its cake and eat it too. You can’t tout your R&D as a strength if that R&D is coming from or funded by Diebold. If you want to be independent, then you have to walk the walk. You can’t bring out the backing of Diebold when it is convenient, but then disassociate yourself from them when it is also convenient. You can’t go both ways. The fundamental truth remains that Premier is still a wholly owned subsidiary of Diebold--just as it was before. From what I can see only the name has changed. It remains to be seen if that improves their operations or if it is just business as usual. Time will tell.

I suspect, however, that there will be many legal concerns over this. This is especially true when it comes to the hundreds of service contracts that Diebold has signed over the last 5 or so years. All of that has to be addressed so that election jurisdictions can expect their equipment to be serviced, etc.

One thing is absolutely clear; Diebold must surely rue the day they entered into this business. And it all comes from a failure to understand what they were getting into.