Legal Filing: Smartmatic Bled Cash Long Before 2020 Election Beef
Both Fox News and Smartmatic, a voting software company, recently submitted extensive legal briefs concerning SmartmaticS financial situation in relation to a defamation case against Fox. Smartmatic is seeking $2.7 billion, claiming that Fox’s unsubstantiated reports of their software being involved in election fraud during the 2020 elections damaged their business prospects. Smartmatic’s filing highlights the company’s belief in its potential for growth prior to the election,supported by its expansion into the U.S.market. However, Fox’s response argues that Smartmatic’s financial decline began well before 2020, citing a drop in revenue and loss of major clients like Venezuela.
Smartmatic contends that false narratives about election rigging have alienated potential clients, which thay describe as labeling the company “toxic.” They argue that these claims have resulted in lost opportunities globally, despite those potential contracts not even existing in some jurisdictions cited by Smartmatic. Fox’s filing defends against the claims by stating that Smartmatic had other issues,including non-compliance with certification and bidding processes,and characterizes the lawsuit as a desperate move for financial recovery. The case is ongoing, with Fox seeking to dismiss the claims, arguing that they are frivolous attempts to silence media reporting on matters of public interest.
Both Fox News and Smartmatic, the voting software company, filed lengthy briefs Thursday arguing about Smartmatic’s past and predicted financial health. Fox’s filing reveals how Smartmatic was massively losing business long before Fox began reporting on it in 2020.
Smartmatic’s filing, which includes many fully redacted pages, says that before the 2020 election, Smartmatic’s CEO believed the company to be “strategically positioned for multi-billion-dollar growth, given its global footprint, its track record,” and its breaking into the U.S. market with a contract in Los Angeles, California.
Smartmatic seeks $2.7 billion from Fox in a years-long defamation case in which it accuses Fox of reporting without evidence that the company’s software had a role in rigging the 2020 election. This, the company has said in court fillings, caused Smartmatic to lose business.
But the bleeding started years before the 2020 election, Fox’s Thursday filing argued.
“Smartmatic’s financial condition steadily deteriorated in the years leading up to the 2020 U.S. Presidential Election, with its revenues plummeting from $477 million in 2012 to $119 million in 2020,” Fox’s filing reads. “During this period, Smartmatic lost its largest customer, Venezuela. Smartmatic struggled to gain new business to make up the difference, and its profitability evaporated, with losses of $52.6 [million] in 2017, $11.6 million in 2018, $17.1 million in 2019, and $19.6 million in 2020.”
Smartmatic says some potential customers refused to deal with Smartmatic because they believed Smartmatic was connected to rigging the 2020 election, and customers who didn’t believe the rigging claim would not hire the company because their voters viewed the company with suspicion.
“According to Smartmatic’s Head of Global Sales, Pedro Mugica, the spread of disinformation about Smartmatic rigging the 2020 U.S. election severely damaged the company’s business prospects,” Smartmatic’s filing said. “Potential clients explicitly told him hiring Smartmatic was a no-go because the company’s name had been tarnished by claims of election rigging in the U.S. Clients directly informed Smartmatic that they could not work with the company because it was considered ‘toxic’ due to claims of election rigging in the U.S.”
Fox’s filing also claimed Smartmatic was embroiled in claims of fraud in Venezuelan and Filipino elections well before any controversy arose over the 2020 presidential election. Smartmatic was founded in 1997 in Caracas, Venezuela as “Tecnología Smartmatic de Venezuela C.A” and was hired in 2004 by Hugo Chávez’s administration to handle the Venezuelan presidential recall election. That was Smartmatic’s first election, one marked by controversial results.
The filing also claimed that Smartmatic’s equipment was not certified, the company didn’t follow bidding requirements, and its services were not competitively priced.
“Smartmatic’s claimed harm is pure fiction, invented in the hopes of securing a litigation windfall and chilling Fox News’s speech,” the filing said.
The comments Smartmatic complains about were broadcast in the United States, but Smartmatic claims it lost business in Turkey, Iraq, and the Congo based on the comments, that may not have even been broadcast in those countries, the filing said.
“For more than half of the 91 contract ‘opportunities’ Smartmatic claims it lost, the target jurisdiction did not even issue requests for proposals. Those jurisdictions were not buying — from Smartmatic or anyone else,” the filing stated.
As The Federalist reported earlier this week, the U.S. Department of Justice criminally indicted three Smartmatic executives in a “bribery and money laundering scheme to retain and obtain business related to the 2016 Philippines elections” in August 2024. The DOJ said company officials paid $1 million in bribes, allegedly to get contracts to provide voting machines and election services.
Fox News requested a summary judgment on their Anti-SLAPP counterclaims, saying the discovery record vindicates what they have been saying throughout the case and called the case a “meritless cash grab to try to replenish Smartmatic’s coffers.”
Anti-SLAPP allows defendants to dismiss frivolous lawsuits aimed at silencing speech on matters of public concern.
Beth Brelje is an elections correspondent for The Federalist. She is an award-winning investigative journalist with decades of media experience.
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