Diebold, Inc. (stock symbol: DBD) CEO Walden O'Dell has resigned due to what company officials describe in a press release as "personal reasons". Reuters is reporting that O'Dell will be replaced by the company's president and chief operating officer, Thomas Swidarski.
As The BRAD BLOG reported exclusively late last week, the filing of a securities fraud class action litigation against the company, O'Dell and other current and former members of their Board of Directors is now imminent. The BRAD BLOG has learned that the case may be filed in Ohio Federal District court as early as today or tomorrow. We will, of course, have more details when that occurs.
O'Dell has faced a great deal of criticism for his statement to Republican fundraisers, prior to the 2004 Presidential Election, that
Diebold he (see correction explanation below) was committed to delivering the electoral vote of the state of Ohio to George W. Bush. O'Dell was part of Bush's "Rangers and Pioneers," a group of individuals who had raised at least $100,000 each for Bush/Cheney's 2004 re-election campaign.
In the wake of the controversy concerning O'Dell's involvement with the Bush/Cheney campaign, a corporate policy was instituted to disallow involvement in political campaign by senior executives at the company. A report in the Cleveland Plain-Dealer late last week, however, revealed that several Diebold executives had continued to donate to GOP campaigns even after the policy was enacted. The new CEO, Swidarski appears to have given the maximum allowable $2000 contribution himself to George W. Bush's campign in 2004.
Diebold, along with Election Systems & Software, Inc. (ES&S) are the two largest Voting Machine Companies in America. Between them, they account for equipment which tallies more than 80% of America's votes.
The North Canton, Ohio-based company has faced several recent financial and upper-level management problems. A recent plummet of 15.5% in the once-venerable company's stock price occurred just days after another BRAD BLOG exclusive in which we reported on a company insider, dubbed "DIEB-THROAT", who had drawn comparisons in the companies management to the now-bankrupt Enron.
A source (not DIEB-THROAT) familiar with the company is intrigued by the news and expressed amazement that O'Dell is stepping down as both CEO and Chairman of the Board. "This was his baby," commented the source to BRAD BLOG. The source suggests this move "has the earmarks of an internal coup d'etat" given the dearth of other explanations beyond "personal reasons" as given by the company for O'Dell's departure.
As we reported last Thursday in our exclusive concerning Diebold's mounting legal problems, the company has been plagued by such issues for some time.
A "Privileged and Confidential" document [PDF] from Diebold's law firm Jones Day was leaked to the Oakland Tribune last year revealing the companies legal fees for just one two month period in the state of California were estimated at $535,000 - $925,000. The document discussed costs related to a $2.6 million dollar settlment the company eventually reached with the state, and outlined fees for "legal analysis of potential criminal violations," "White collar criminal law attorney pre-grand jury investigative advice" and even costs to "Monitor selected Web sites to gain key intelligence."
Our source, DIEB-THROAT was not surprised to hear of the pending litigation. "I am not surprised that such a lawsuit has developed [as] the company consistently offered Wall Street deceptive information."
The BRAD BLOG has been told there will be details on the litigation within the next 24 hours. We will, of course, report all such developments once they are confirmed.
CORRECTION: A reader correctly pointed out that O'Dell promised that he, not necessarily his company, Diebold, as we originally reported, was committed to delivering the state of Ohio to George W. Bush in the 2004 election in his now-infamous fundraising letter to Republicans. More details here on that letter, here....