Newsmax's Smartmatic Shenanigans Settled
Newsmax quietly settled the defamation lawsuit election-tech firm Smartmatic filed against it -- but it's trying to be coy about the impact of that and a related lawsuit on its upcoming IPO.
Newsmax has spent the past four years cleaning up the mess it made after the 2020 election, when it gave space to Donald Trump and his supporters to spread baseless claims of election fraud tied to election systems operated by Dominion and Smartmatic. As ConWebWatch documented, it had to quickly walk back (in a statement quietly posted to its website on a Saturday night) its post-election claims that companies like Dominion and Smartmatic “used software or reprogrammed software that manipulated votes in the 2020 election.” In April 2021, it settled with Dominion executive Eric Coomer over promoting false claims that he was manipulating vote totals.
The walkbacks weren’t enough, however — later in 2021, both Smartmatic and Dominion sued Newsmax over the false claims it promoted about the companies. While presumably acting properly in court, Newsmax used its website to take shots that the companies, particularly Smartmatic. Eric Mack used a September 2023 article to repeat a CNN report about Smartmatic: “A voting technology company at the center of legal action against former President Donald Trump’s lawyers and others over the 2020 presidential election reportedly finds itself implicated in a bribery scheme with a top Filipino election official.” Fully half of Mack’s story, though, is about Newsmax defending itself against the lawsuit filed against it by Smartmatic and fellow voting-tech company Dominion. First up, denial and distancing:
Alleging defamation, Smartmatic is suing Newsmax, Fox News, OAN, several individual Fox hosts, former Trump lawyer Rudy Giuliani, former Trump campaign lawyer Sidney Powell, MyPillow CEO Mike Lindell, and others.
All have denied wrongdoing.
[…]
The Trump team alleged a tenuous connection between Dominion and Smartmatic, noting that Smartmatic had once owned Sequoia, a U.S. voting machine company. Dominion acquired Sequoia in 2010.
Newsmax has denied the defamation allegations of Smartmatic, claiming its lawsuit is an attack on a free press and Newsmax’s right to report on what major officials and other public officials are stating publicly.
In December 2020 Newsmax issued a statement on its coverage of the 2020 election, making clear that network had “no evidence Dominion uses Smartmatic’s software or vice versa.”
The statement also added that Newsmax found that “no evidence has been offered that Dominion or Smartmatic used software or reprogrammed software that manipulated votes in the 2020 election.”
Mack also stated:
Smartmatic has long had ties with the regime of Venezuelan strongmen Hugo Chavez and Nicolas Maduro, handling the country’s presidential and congressional elections for over a decade.
Mack failed to mention that Smartmatic left Venezuela in 2018 after the country’s election officials were caught by Smartmatic manipulating vote totals in a 2017 election. That would seem to disprove Mack’s suggestion that Smartmatic is corrupt because it had worked with “strongmen.”
Mack waited until the third-to-last paragraph of his 24-paragraph article to concede that “Smartmatic was not accused in the criminal complaint of having tampered with elections in the Philippines or elsewhere, according to CNN.”
Newsmax followed that up with a related piece in a Nov. 29 article by Sandy Fitzgerald:
The Philippines’ Commission on Elections (COMELEC) moved Wednesday to ban Smartmatic PH, a voting technology company, after the U.S. Justice Department filed criminal charges against a former COMELEC official alleging that he was bribed by Smartmatic in exchange for winning contracts in the Philippines.
Smartmatic is suing numerous media outlets and individuals for defamation related to the 2020 United States presidential election claiming that media coverage of it harmed its reputation.
In its action, COMELEC said Smartmatic had been “disqualified and disallowed” after the Justice Department alleged that it had bribed Andres Bautista, the former COMELEC chairman, and other Filipino officials $4 million in exchange for obtaining a contract for election machines, according to a report in CNN Philippines.
Like Mack, Fitzgerald play the Venezuela card to smear the company: “Smartmatic served as Venezuela’s election vendor for over a decade, and has faced international controversy since 2004 when it began handling national elections while Venezuelan strongmen Hugo Chavez and Nicolas Maduro were in power.” And like Mack, she failed to mention that Smartmatic left Venezuela in 2018 after the country’s election officials were caught by Smartmatic manipulating vote totals in a 2017 election.
Fitzgerald waited until the 21st paragraph of her article to disclose that “Smartmatic has filed defamation lawsuits against Fox News, Newsmax, OAN” and others, “all of whom have denied wrongdoing.” She repeated the corporate “attack on a free press” defense and that it had a “right to report on what major officials and other public officials and their representatives are stating publicly.” She did conclude, though, by noting that “retired Fox Corp. Chairman Rupert Murdoch is being deposed in Los Angeles this week in Smartmatic’s $2.7 billion defamation lawsuit against the company and its coverage of vote-rigging claims made by Trump and others from the 2020 presidential election.”
More potshots
Meanwhile, the Smartmatic continued to slowly grind forward. An April 17 article by Michael Katz rehashed some of those right-wing attacks, even though it was ostensibly about fellow right-wing channel One America News reaching an out-of-court settlement with Smartmatic:
Smartmatic is not without controversy, however.
In March 2020, Politico reported on serious concerns over Smartmatic’s technology being used in Los Angeles.
Politico noted that Smartmatic’s system was found to have “numerous security flaws” with some election integrity experts calling for “barring the system” due to “multiple digital and physical vulnerabilities.”
Politico also claimed critics offered concerns that “the company was founded by three engineers from Venezuela and was at one time the subject of a Treasury Department inquiry into its potential ties to the Venezuelan government.”
“It also came under scrutiny in the Philippines, where authorities charged three of its employees with illegally altering code on an election server during that country’s 2016 national election,” Politico reported.
But Katz did not mention one revelation that may have inspired OAN to reach a settlement: a report that OAN sent a spreadsheet to then-Trump lawyer (and election denier) Sidney Powell containing the passwords of Smartmatic employees, which would have violated federal privacy laws.
Katz even regurgitated some of those old election-fraud attacks on Smartmatic, with only a tepid mention that none of it was substantiated:
After the 2020 election, Trump and his surrogates made a tenuous tie-in between Smartmatic and Dominion Voting Systems.
Trump’s team claimed that software provided by Dominion Voting Systems had been manipulated, allowing for votes to be switched.
Dominion and election officials in multiple jurisdictions denied those claims, and Trump’s legal team never offered any evidence of software tampering by Dominion.
Trump’s legal team also alleged that Smartmatic, which had once owned Sequoia Voting Systems, sold key assets of the company to Dominion in 2010.
Noting Smartmatic’s close ties to the regimes of Venezuelan dictators Hugo Chavez and Nicolas Maduro, Trump’s team alleged that Dominion’s software was compromised.
The Trump team did not offer substantiation on these allegations.
Still, as the favored election company for over a decade of the brutal Chavez regime, Smartmatic has long been subject to criticism and scrutiny.
Of course, the reason Smartmatic is suing Newsmax is that it uncritically repeated many of those baseless attacks against the company without disclosing that there was no substantiation offered — which Katz failed to mention.
An anonymously written June 4 article actually focused on the lawsuit itself, albeit touting an action Newsmax was taking, citing allegations regarding the Philippines (which Fox News has also glommed onto):
Newsmax Media Inc. recently filed in Delaware Superior Court a motion seeking extensive financial and evidentiary sanctions against voting machine company Smartmatic.
Newsmax has argued that Smartmatic misled Newsmax, a special master, and the court about Smartmatic’s ability to produce discovery concerning the Department of Justice’s ongoing criminal investigation into the activities of Smartmatic and several of its senior executives related to an alleged international bribery scheme involving an election official in the Philippines.
In its motion, Newsmax asserts that for five months Smartmatic misled the court, the special master, and Newsmax to believe that DOJ was blocking critical discovery concerning the likelihood that Smartmatic and its executives may soon face serious, public, criminal bribery charges.
[Go here to read the publicly filed version of Newsmax’s motion detailing Smartmatic’s deception.]
The motion explains that Smartmatic and its counsel repeatedly informed the court that the DOJ was preventing Smartmatic from disclosing relevant information to Newsmax.
Newsmax notes in its motion that, as it turns out, Smartmatic — not the DOJ — was blocking this critical discovery.
[…]
Newsmax contends that ongoing and future news reports about Smartmatic’s alleged involvement in an international bribery scheme is and will remain devastating to its defamation lawsuit against Newsmax.
Specifically, Newsmax says that these new revelations undermine Smartmatic’s claim that it will suffer damage to its future business prospects as a result of 2020 election coverage by Newsmax and others — as opposed to Smartmatic’s alleged role in the bribery scheme.
The article also repeated Newsmax’s lawyerly denial of Smartmatic’s legal claims:
Newsmax has denied Smartmatic’s defamation claim in its entirety, noting that it reported fairly on the 2020 election results by giving the public both sides of the dispute.
Newsmax also asserts that the Smartmatic lawsuit poses a danger to the First Amendment and the most basic right of press freedom.
The article didn’t mention, however, that a couple weeks earlier, Smartmatic accused Newsmax of deleting texts and emails from Newsmax executives, allegedly after Newsmax had received notice to preserve evidence for the pending suit:
The new filing refers to specific text messages in which Newsmax CEO Chris Ruddy referred to Trump’s attorney Sidney Powell, which Smartmatic says were deleted from Ruddy’s devices but saved by other witnesses and provided to the plaintiffs during discovery. Powell was a Newsmax guest and a source of false allegations about voting fraud by Smartmatic and other companies. The filing also alleges that the company lied under oath about the existence of its own journalistic guidelines.
Newsmax has denied Smartmatic’s claims, calling them “implausible inferences” and “nothing more than speculation.”
Later in June, Newsmax filed a motion to dismiss the lawsuit entirely, claiming that “Smartmatic fails to meet its burden of proving that Newsmax published its news accounts with a knowing or reckless disregard of their falsity.”
A quiet settlement
As the summer wound down, Smartmatic’s lawsuit against Newsmax heated up with both sides claiming small procedural wins:
In August, a judge rejected Newsmax’s attempts to throw out parts of the lawsuit and allowed the case to proceed toward trial.
In September, a judge allowed some claims to be dismissed because not all the allegedly defamatory statements had been proven false or proven to have been made with harmful intent, though Newsmax’s claims about Smartmatic’s voting machines altering the election were shown to be false.
Newsmax’s article on that September ruling, however, was taken from an unidentified wire article but added a statement from Newsmax hyping “several public controversies involving Smartmatic, including its association with the murderous Chavez regime in Venezuela, allegations of corruption and bribery in the Philippines, and its more recent history of allegations of corruption that led to a criminal investigation by the U.S. Department of Justice and resulted in the indictment of three Smartmatic executives for violation of the Foreign Corrupt Practices Act,” meaning that “Smartmatic can hardly claim that Newsmax’s coverage harmed its reputation.” It added that “This case is not about the left versus right, but about a free press being allowed to do its job,” even though Newsmax is indisputably a partisan right-wing website.
Also in September, it was reported that Newsmax requested that the judge delay the trial after the Justice Department last month indicted Smartmatic executives over an alleged scheme to bribe officials in the Philippines to use Smartmatic election software.
When Newsmax won a “major ruling” in the lawsuit, an anonymously written Sept. 23 article hyped it and took potshots at the company, as it is wont to do:
The Superior Court of Delaware ruled Monday that Smartmatic will not be eligible for punitive damages in its defamation case against Newsmax.
This is a major ruling in favor of Newsmax.
The court ruled that since Newsmax had never engaged in express malice — meaning it never intended to harm Smartmatic — the election services company could not claim punitive damages.
Monday’s ruling means that to recover any damages, Smartmatic must prove to a jury that Newsmax’s coverage caused Smartmatic’s actual losses.
Newsmax’s reporting did not cause Smartmatic damages, and after extensive discovery Smartmatic has offered no evidence of such claimed damages.
The article then laughably insisted that “Newsmax covered both sides of the dispute after the 2020 election,” ignoring that its failure to actually do so is the basis of the Smartmatic lawsuit.
A couple days later, Newsmax put out an anonymously written explainer taking a further victory lap on this issue (and yet another shot at Smartmatic):
On the eve of its trial of Newsmax, Smartmatic has voluntarily reduced its claim for damages by over a billion dollars because it seeks to hide from the jury key evidence concerning allegations of criminal activities by its executives.
The Delaware Court has so far approved keeping this critical evidence from the jury, provided that Smartmatic does not argue that it lost any business opportunities after Dec. 31, 2023, due to Newsmax reporting.
[…]
We remain perplexed that a company with such a sordid reputation as Smartmatic can put Newsmax on trial for allegedly harming its reputation.
For more than a decade, Smartmatic served as the exclusive election vendor of the brutal Chavez/Maduro regimes which has been continuously cited for its human rights violations, including murder, torture, repression of basic freedoms and other crimes.
Considering Smartmatic’s terrible reputation, this company can hardly claim Newsmax’s minor coverage after the 2020 election hurt its business.
The day after this, on Sept. 26, jury selection was set to begin in the trial — then, it was abruptly announced that Newsmax and Smartmatic had reached a settlement to end the lawsuit. With that, Newsmax swiftly clammed up about the lawsuit. A anonymously written Sept. 26 Newsmax article simply stated that “Newsmax is pleased to announce it has resolved the litigation brought by Smartmatic through a confidential settlement. More details to follow.” But Newsmax never released more details, and this article was never updated.
The only other reference to settlement at Newsmax is a Sept. 27 Associated Press article about it that included nothing else from Newsmax. The settlement is confidential, which you’d think a company that purports to be a news organization like Newsmax would be opposed to. Interestingly, a promotion at the end of the article hyped Newsmax’s upcoming planned IPO — which may be the reason Newsmax was amenable to a settlement and keeping the terms secret.
This scenario is a bit reminiscent of the battle between Newsmax and DirecTV after the latter dropped Newsmax’s TV channel in a dispute over fees, which Newsmax loudly (and falsely) framed as political bias. When Newsmax and DirecTV finally started negotiating over carriage, Newsmax suddenly went silent — and when they reached an agreement, Newsmax had to walk back all those partisan attacks that it was the victim of “censorship.”
More details
Two months later, Newsmax finally provided a few details. A Nov. 30 article — dumped on the Saturday of the Thanksgiving holiday weekend for minimal exposure, suggesting that this something it was supposed to do at the time of the settlement by did not — carried the bland headline “Newsmax Statement on Smartmatic Case”:
Newsmax Media, Inc. has resolved the litigation brought by Smartmatic through a confidential settlement. Newsmax acknowledges that the Court found that “allegations regarding whether the [2020 U.S. presidential election] and its results were somehow altered or manipulated by Smartmatic are factually false/untrue.”
Newsmax reiterates its statement of December 2020 that made clear that there is no evidence that Smartmatic machines or software altered the votes in the 2020 U.S. presidential election and that Smartmatic is a U.S. company and not owned by the Venezuelan government, or any foreign official or entity.
Note the passive tone, focused on restating its own earlier statement and a grudging acknowledgment that a court found claims of manipulation were untrue. It’s as if Newsmax was ordered to publish this article by the court. Newsmax also made no effort to promote this article and placed it at the bottom of its front page. It also offered no explanation of why it took two months to make this not-particularly-enlightening statement, which reads more like a legal obligation.
Interestingly, this article has remained at the bottom of Newsmax’s front page ever since — which, again, is bit reminiscent of last year’s battle between Newsmax and DirecTV after the latter dropped Newsmax’s TV channel in a dispute over fees, something that Newsmax loudly (and falsely) framed as political bias and “censorship.” When the two reached a new agreement, Newsmax had to walk back all those partisan attacks on DirecTV accusing it of “censorship” in notices that appeared for several days on Newsmax’s front page.
Meanwhile, Newsmax has been preparing for an IPO and trying to entice its viewers and readers into buying Newsmax stock. As part of that, Newsmax launched a website dedicated to promoting the IPO — but the Smartmatic lawsuit is not mentioned in either the FAQ or the investor slideshow. The only reference to it comes in an amendment to the private placement memorandum on the IPO, in which Newsmax appears to confirm that it paid Smartmatic money to settle — and that part of the IPO proceeds will go to Smartmatic:
Newsmax Media reached a settlement agreement with Smartmatic on September 26, 2024, pursuant to which all claims will be released by Smartmatic for consideration, including a cash amount payable over time. Newsmax Media’s payment obligation with respect to this settlement is expected to be paid through the Company’s existing cash on hand, cash generated by the Company from current and future revenue, as well as proceeds from this offering and future equity offerings. See “Risk Factors – Risks Related to Legal and Regulatory Matters”. Management believes the settlement with Smartmatic will, subject to the payment of all consideration in a timely manner, reduce then eliminates future legal expenses the Company would have expected to bear related to this suit, which could have included costly appellate legal actions and other matters.
Newsmax also admitted that it could be in financial trouble if the court does not agree to the settlement:
The Smartmatic settlement agreement is subject to reaching a definitive settlement agreement that is approved by the court. If a final court-approved definitive settlement agreement is reached, the Company has agreed to make payments to settle all of Smartmatic’s legal claims. If a definitive settlement is not achieved, the Company intends to vigorously defend against the litigation. While Newsmax Media is vigorously defending such suits, an unfavorable outcome in this matter could have a material adverse effect on the Company’s financial position, results of operations and cash flows.
That appears to be an admission of how serious Smartmatic’s allegations against Newsmax were, how much money is involved — and how badly the company could be affected without this settlement. Still, Newsmax tried to keep up a good front. A Dec. 10 update from Ruddy gushed that “Newsmax has raised $125 million in our Preferred 7% Convertible Share Offering.” and hyping the channel’s ratings. No mention of the Smartmatic settlement, of course.
Meanwhile, the Dominion lawsuit has been ongoing, and Forbes reports that Dominion’s lawsuit against Newsmax is still pending, with the trial set for April 2025.