Sens. seek election probe
They want Treasury to look at Russian’s ties to state contractor
Less than three months before early voting begins, Maryland’s U.S. senators have joined the chorus of elected officials warning that the November elections could be threatened by a Russian oligarch’s stake in a firm that manages some of the state’s most critical electoral systems.
Maryland has already endured one major election snag this year. Some 80,000 voters were told just before the June 26 primary to cast provisional ballots because their change-of-address requests were flubbed by a faulty computer program.
Then FBI agents revealed last month that a contractor that manages many of Maryland’s election systems has ties to Vladimir Potanin, an oligarch close to Russian President Vladimir Putin.
State officials launched a barrage of probes.
On Tuesday Sens. Ben Cardin and Chris Van Hollen added to the list of inquiries by asking that a U.S. Treasury Department committee determine whether Potanin’s investment in the state contractor, ByteGrid, poses a national security threat.
“We know that our elections are under threat from foreign cyberattacks and disinformation efforts,” the Maryland Democrats wrote to Treasury Secretary Steven T. Mnuchin. “Our democratic process can also be manipulated through foreign investment in elections infrastructure.”
Cardin and Van Hollen asked Mnuchin to authorize the Committee on Foreign Investment in the United States to review the transaction between AltPoint Capital — an investment fund whose largest investor is Potanin — and ByteGrid.
Virginia-based ByteGrid, with three offices in Maryland, owns the servers that hold the data for voter registration, candidacy, election management and election night results, state elections officials said.
Altpoint Capital, a $1 billion private equity firm based in Greenwich, Conn., bought an ownership stake in ByteGrid Holdings LLC in 2011, spokesman Devin Tilitz said. The largest investor in Altpoint Capital Partners is Potanin.
Potanin is “very close” to Putin, state officials have said. Altpoint’s managing partner, Gerald T. Banks, is a Russian millionaire who changed his name from Guerman Aliev. Banks changed his name five years ago and is a U.S. citizen, Tilitz said.
State officials have no evidence that Potanin or Banks had done anything untoward.
Gov. Larry Hogan, a Republican, and Senate President Thomas V. Mike Miller and House Speaker Michael Busch, both Democrats, asked Maryland Attorney General Brian Frosh to investigate the contract.
They also asked Homeland Security Secretary Kirstjen Nielsen to direct the Office of Cybersecurity and Communications to provide the state with technical assistance to evaluate the network used by the State Board of Elections.
And state election officials were auditing existing data, reviewing their defenses and implementing any changes to secure the systems before November’s general election. State election officials did not return calls for comment.
State leaders are expected to be updated on those reviews in the coming weeks.
Van Hollen told The Baltimore Sun he believes the
If it “hasn’t reviewed this already,” he said, it should “immediately take action to protect the integrity of Maryland’s elections.”
“CFIUS has the power to block certain investments if they put our security at risk,” Van Hollen said.
But not only can the committee block investments, he and Cardin wrote to Mnuchin; it can also reverse an investment if the companies did not notify it of a transaction that is later determined to be a threat.
Annie Eissler, chief marketing officer for ByteGrid, has told Maryland officials that the company’s investors “have no involvement or control in company operations.”
She said this week that she does not believe ByteGrid was “obligated to provide notice to CFIUS of the AltPoint Capital Partners investment.”
Cardin and Van Hollen said they want the committee to review the transaction.
“If either AltPoint or ByteGrid did not file a notice with CFIUS, the Committee has the ability to look back at any completed transaction that results in control and threatens national security and takes steps to address the national security threat, including requiring divestment,” they wrote.
A Treasury Department spokesman said “information filed with CFIUS may not be disclosed by CFIUS to the public.”
“Accordingly,” he said, “the department does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review.”
The treasury secretary chairs CFIUS. The Treasury Department describes it as “an inter-agency committee authorized to review transactions that could result in control of a U.S. business by a foreign person in order to determine the effect of such transactions on the national security of the United States.”
Cardin and Van Hollen sit on committees that oversee CFIUS.
Frosh said he was pleased that Cardin and Van Hollen were making the request.
“It’s an area that needs a lot more attention,” said Frosh, a fellow Democrat.
He said he and legislative leaders are discussing “what Maryland might do independently of federal requirements” to secure election systems. He expects legislation during the 2019 General Assembly session.
Frosh said his office’s investigation into Potanin’s stake in ByteGrid continues. He said he is working with state election officials and federal agencies “to ensure we’re taking proper steps to make sure the election is secure, to make sure that we’re going to get the right election results without interference.”
Diarra O. Robertson, a professor of government at Bowie State University, wants state officials in Maryland and across the nation to look more carefully into the financing of their contractors.
“The ultimate ownership of a company is not revealed when they bid,” Robertson said. “And you may not have the slightest idea that a foreign nation could be invested.”
The U.S. intelligence community has concluded that Russia interfered in the 2016 presidential election. Special Counsel Robert Mueller has won indictments of more than two dozen Russians accused in a sweeping conspiracy to spread misinformation and sow discord during the campaign.
Intelligence officials said last week that the nation continues to face “pervasive” threats to elections from other countries, including Russia, heading into the midterm elections in November.
Cardin and Van Hollen noted the National Defense Authorization Act recently approved by Congress expands CFIUS’s review power beyond transactions that result in foreign control of a U.S. company. Under the act, which President Donald Trump has not yet signed into law, the committee can also review “other investments” by foreigners in U.S. firms involved in “critical infrastructure.”
That includes “election infrastructure,” they wrote.
The senators asked that the foreign investment committee assure them that an investigation of AltPoint Capital’s stake in ByteGrid has either taken place or is currently underway.
If not, they asked Mnuchin to lead such a review “to address concerns that Mr. Potanin’s relationship with the Russian Government may threaten Maryland’s and America’s election infrastructure and undermine the integrity of our elections.”