Fox lawsuit highlights effects of conspiracies on Dominion

PHOENIX (AP) — In Arizona’s most populous county, elected officials are bracing for what could happen when it comes time to replace its $2 million-a-year contract for voting equipment.

Officials in Maricopa County, which includes Phoenix, say they have no concerns about their current vendor, Dominion Voting Systems. The problem is that the company has been ensnared in a web of conspiracy theories since the 2020 presidential election that have undermined public confidence in U.S. elections among conservative voters, led to calls to ban voting machines in some places and triggered death threats against election officials across the country.

“I have concerns over my own personal security if we re-enlist Dominion,” Maricopa County Recorder Stephen Richer, a Republican elected in 2020, said in a court filing. “It went from a company that nobody had heard about to a company that is maybe one of the most demonized brands in the United States or the world.”

That sudden turnabout in fortunes for the Colorado-based voting machine company is at the heart of a $1.6 billion defamation lawsuit it has filed against Fox News, with the trial scheduled to begin in mid-April. Dominion claims Fox defamed it by repeatedly airing false claims about the company’s voting machines and software. Court records and testimony revealed that several Fox hosts and executives didn’t believe the claims pushed by former President Donald Trump and his allies since the 2020 election but continued to air them, in part because they were worried about losing viewers.

Fox has argued the network was reporting on allegations that were newsworthy as Trump and his Republican allies contested his loss to Joe Biden, a Democrat. The network has said Dominion has been overstating its value and downplaying security concerns about its machines. Its attorneys also argue that documents produced in the case show Dominion is in a solid financial position.

Dominion has been presenting evidence that it says shows lost contracts and business opportunities over the last two years. It cites misinformation as the reason officials in some counties in Nevada, Pennsylvania and Tennessee have terminated their contracts with it and other counties in Iowa, Kansas, Massachusetts, Missouri, New Jersey and Ohio have opted against renewing.

One expert, in a report submitted by Dominion in November as part of its lawsuit, estimated the company had experienced nearly $16 million in lost profits from customers who either terminated their contracts early or decided not to renew.

The same estimate projected Dominion has already suffered $72.3 million in lost opportunities, which includes potential contract extensions, additional equipment sales and service contracts with existing customers, and new business.

Overall, the expert estimated the company had experienced a $920 million decline in value, which includes the estimated taxes the company would have to pay if they were awarded damages. The expert also estimated additional future lost opportunities that have yet to be detailed publicly.

“The evidence will show that Dominion was a valuable, rapidly growing business that was executing on its plan to expand prior to the time that Fox began spreading and endorsing baseless lies about Dominion voting machines,” Stephanie Walstrom, a Dominion spokeswoman, said in a statement.

The company's challenges haven’t ended, as conspiracies about the last presidential election have permeated much of the Republican Party. Trump allies continue to travel the country meeting with community groups and holding forums to promote election conspiracies.

The conspiracies have been cited by some county officials, who say they are responding to constituent concerns, as justification for refusing to certify election results and have fed attempts to decertify or ban voting equipment.

“People aren’t acting rationally,” said Lawrence Norden, an election security expert with the Brennan Center for Justice, which has advocated for more voter access and funding for election offices. “They are canceling contracts at great expense to their taxpayers.”

Not included in the Dominion expert’s report are more recent actions, including in Shasta County, California, where the board of supervisors terminated its contract with Dominion early. At a meeting in January, the board cited a loss in public confidence in the machines, which are used in the county to tabulate paper ballots marked by hand.

In 2020, Trump won Shasta County with 65% of the vote.

“Dominion has to prove to me that we have a free and fair election,” said Board of Supervisors Chair Patrick Henry Jones, who led the effort to end the contract. “Just because we’re all sitting up here and elected doesn’t mean we had free and fair elections every single time.”

The board is now pursuing a plan to count ballots by hand, a process experts consider to be less accurate and more time-consuming in all but the smallest of jurisdictions. Trump ally Mike Lindell, the MyPillow CEO, has promised to support their efforts to get rid of their voting machines.

In an interview, Lindell said he was prepared to help cover the costs of any lawsuits Shasta County might face.

“They are within their rights of going to paper ballots and a hand count,” Lindell said. “They have to be courageous, or we are not going to get rid of these machines.”

Cathy Darling Allen, the elected Shasta County clerk and registrar of voters, has defended the voting equipment and blamed “disproven conspiracy theories” for undermining the county’s election system and staff. She has warned the county was in danger of not being able to conduct elections.

“Their actions have placed the security of our elections at risk and created a dangerous precedent encouraging outsiders to undermine our elections at the county level,” Darling Allen wrote in testimony to Congress earlier this month.

She estimated that hand-counting all ballots in a presidential election with 50 contests on the ballot would cost at least $1.6 million and require hiring nearly 1,300 temporary employees. The county has more than 111,000 registered voters.

Election security experts were concerned that the market for voting machines already was limited before the 2020 election, dominated by three companies. One Dominion competitor, Election Systems & Software, has not reported contract cancellations but has also been forced to defend its reputation amid the voting machine conspiracies.

Erin Murphy, an attorney for Fox, told the Delaware Superior Court judge presiding over the defamation case in a recent hearing that Dominion has “a real speculation problem” regarding its claims for damages and said Dominion’s lost-profits argument appears to be based on the presumption that it would have won every contract it sought had it not been for Fox’s coverage of the election fraud allegations.

That ignores the fact that Dominion’s rivals have sometimes offered lower bids or more attractive technology, Murphy said. Fox has highlighted internal communications, including a chat in which one Dominion employee said, “God our products suck,” as well as a federal advisory outlining potential vulnerabilities reported in a Dominion system.

Arizona's Maricopa County has been at the forefront of the conspiracy theories about Dominion. The GOP-controlled legislature in 2021 used its subpoena power to seize the county’s voting equipment and hired a firm run by Trump supporters to comb through it in search of evidence the machines were compromised. They found none, and Doug Logan, who oversaw the project, conceded “the Dominion machine is actually quite precise” in a private text message that surfaced in an unrelated lawsuit. Nevertheless, distrust remains rampant.

Dominion’s executive vice president of sales, Waldeep Singh, said in a court filing that the situation in Arizona has made it impossible to do business there. He blamed conspiracy theories for scuttling the company’s chances of winning business in Yavapai County, a conservative rural county north of Phoenix.

“All I can tell you is, based on my experience and our trajectory at the time in Arizona, we were trending in a very positive direction,” Singh said.

Now, he said, “I don’t think we’ll win anything in Arizona again.”