U.S. firms deny link to Chavez

"It's a national security issue," she said in a telephone interview. "Having a foreign government investing or owning a company in this country that makes voting machines could raise a question about the integrity of the elections."

According to Smartmatic, the firm is owned primarily by three individuals and their families: Antonio Mugica, a dual-Spanish-Venezuelan national who is the chief executive officer (78.8 percent); Alfredo Anzola (3.9 percent); and Roger Pinate (8.5 percent). Investor Jorge Massa as well as Smartmatic employees and other friends own the remainder.

"No foreign government or entity — including Venezuela — has ever held an ownership stake in Smartmatic," Mugica said in a statement late Sunday.

The two companies said they have been cooperating with CFIUS after initial questions were raised last spring but decided to seek a formal review more recently.

Sequoia, which has been operating since the late 1800s and providing electronic voting equipment since the 1980s, currently provides electronic voting machines for 16 states as well as the District of Columbia.

"Sequoia is very confident our equipment will perform as well as it has over the course of history," said Sequoia spokeswoman Michelle Shafer. "It wouldn't matter if the voting equipment is created by Martians, because it all goes through a very vigorous testing process at the federal and state level."

The investigation by CFIUS was first reported Saturday by The Miami Herald.

Separately, activist Patricia Axelrod of Reno, Nev., sued Sequoia on Wednesday, claiming her vote in the 2004 general election was not counted because of a defective machine.

The complaint accuses Sequoia of negligence and property damage and seeks more than $10,000 in damages, as well as a court order to require the public testing of all Sequoia machines in Washoe County, Nev., and the repair of any defective machines.

"Sequoia management and product defect and negligence lost my 2004 vote, impaired the accurate results of the 2004 election and threatens the outcome of the 2006 elections," Axelrod said.

Shafer said Sunday she had not seen the suit and could not comment on it. But she cited the equipment's track record, saying, "We're very proud of how it's performed and the state is pleased with how it's performed, and voters can feel very confident when they go out to vote."