MIAMI (AP) – Smartmatic, the elections-technology company currently engaged in a defamation lawsuit against Fox News, is facing a growing number of criminal allegations directed at some of its executives. Recent claims from federal prosecutors suggest that a "slush fund" used for bribing foreign officials was partially funded with proceeds from a contract for voting machines sold to Los Angeles County.

The details of this escalating criminal case emerged in court filings in Miami, where Smartmatic's co-founder, Roger Pinate, along with two Venezuelan colleagues, was charged last year with bribing officials in the Philippines during that country's 2016 presidential elections. Pinate, who is no longer employed by Smartmatic, has entered a plea of not guilty.

As part of building their case, federal prosecutors are seeking to introduce evidence indicating that nearly $300 million received by Smartmatic from Los Angeles County for modernizing its voting systems was funneled into a fund controlled by Pinate through overseas shell companies and fraudulent invoices.

It is important to note that Smartmatic itself has not been charged with any criminal activities, nor have U.S. prosecutors accused the company or its executives of altering election results. Furthermore, there have been no allegations of wrongdoing against officials from Los Angeles County, who assert they were unaware of any bribery schemes. County officials have publicly stated that they had no knowledge of these concerns.

This development comes at a critical time for Smartmatic, as the company pursues a $2.7 billion defamation lawsuit against Fox News. The lawsuit stems from allegations that Fox aired false claims suggesting the company was implicated in rigging the 2020 U.S. presidential election. Fox News maintains that its reporting was a legitimate coverage of newsworthy allegations.

Smartmatic has labeled the Justice Department's recent filing as filled with "misrepresentations" and disconnected from reality. In a public statement, the company asserted, "Let us be clear: Smartmatic wins business because we're the best at what we do. We operate ethically and abide by all laws, always, in Los Angeles County and every jurisdiction where we operate."

In response to the mounting allegations, Fox has sought more information from Los Angeles County regarding its dealings with Smartmatic. The network aims to undermine Smartmatic's claims about its business prospects, framing the company as a scandal-ridden organization facing legal challenges rather than attributing its troubles to Fox's coverage.

Smartmatic was founded over two decades ago by a group of Venezuelans, initially gaining traction through work associated with the late Venezuelan leader Hugo Chavez, an advocate for electronic voting. The company expanded its operations globally, providing voting technology services to elections in 25 countries, including regions from Argentina to Zambia. In 2018, Smartmatic was awarded a significant contract with Los Angeles County, which has since helped it establish a foothold in the growing U.S. voting technology market.

The company claims that its business drastically declined following Fox News's coverage, which allowed individuals associated with President Donald Trump to present allegations linking Smartmatic to a conspiracy to steal the 2020 election. Although Fox later aired a segment countering these allegations, the network has firmly defended itself against the defamation suit filed in New York.

In ongoing investigative efforts concerning Smartmatic's activities in Los Angeles, Fox has initiated legal action to compel Los Angeles County Clerk Dean Logan to provide public records relating to his interactions with Smartmatic's U.S. affiliate. Additionally, Logan has been questioned under oath regarding a dinner paid for by a Smartmatic executive at the exclusive Magic Castle club and a Smartmatic-sponsored trip to Taiwan in 2019 connected to equipment manufacturing. Prosecutors allege that the vendor involved in this trip is linked to the suspected bribery scheme in the Philippines.

Logan stated in his deposition that the dinner was merely a "social occasion" unrelated to official business and that he did not need to report the trip to Taiwan since it was covered by the contract with Smartmatic. A spokesperson for Logan's office emphasized that the allegations of bribery are unfounded and unrelated to Smartmatic's work for Los Angeles County. The spokesperson also confirmed that all of Smartmatic's projects had been evaluated for compliance with contract terms.

On a broader scale, U.S. prosecutors in Miami have accused Pinate of paying a secret bribe to Venezuela's election chief by gifting her a luxury residence in Caracas, which prosecutors allege was an attempt to mend relations following Smartmatic's withdrawal from Venezuela in 2017. Smartmatic has denied these bribery allegations, reiterating its cessation of operations in Venezuela after exposing the government's manipulation of election results.

Smartmatic has previously settled defamation lawsuits against conservative news outlets Newsmax and One America News Network in connection with their coverage of the 2020 U.S. election. The terms of these settlements have not been disclosed.