What to Know About Dominion, the Voting Machine Company Suing Fox

If not for the 2020 election, most people would not have heard of Dominion Voting Systems, an elections technology company that John Poulos started out of his basement in Canada more than two decades ago.

But in the days and weeks after the election, former President Donald J. Trump and many of his allies accused the company of perpetrating election fraud. Dominion then filed a slew of defamation lawsuits against public figures and news networks, accusing them of spreading the false narratives and exposing its employees to harassment. The company’s case against Fox News is scheduled to go to trial this week. Judge Eric M. Davis, who is presiding over the case, said in a statement late on Sunday that he was delaying the trial by a day, until Tuesday. He did not cite a reason but said he would make an announcement Monday at 9 a.m.

Here is what we know about the company, from its private equity owner in New York to its powerful perch in the nation’s elections industry.

Dominion’s Early Days

Dominion became one of the largest providers of election technology in the United States by selling, licensing and maintaining products such as its Democracy Suite software and ImageCast voting and tabulation machines. During the 2020 election, the company served 28 states, including many swing states, as well as Puerto Rico.

Mr. Poulos, who has degrees in electrical engineering and business, incorporated Dominion in Toronto in 2003 with some friends after a stint in Silicon Valley. His sister was his first investor, followed by his parents and his friends’ parents. (Dominion declined to comment for this article.)

The company is named after Canada’s 1920 Dominion Elections Act, which removed barriers to voting that had excluded women and voters of certain racial, religious or economic groups. Mr. Poulos’s business idea was to help people with disabilities, such as paralysis or blindness, cast their ballots as independently as possible while still leaving an auditable paper trail. Dominion incorporated accessible technology like audio readouts and large screens into election machines.

The company scored its first American contract in 2009, providing voting technology to dozens of counties in New York. The next year, it moved its headquarters to Denver, where it now has several hundred employees.

Private Equity Owners

Staple Street Capital, a private equity firm in New York, is the majority owner of Dominion. Mr. Poulos, Dominion’s chief executive, retains a roughly 12 percent stake. PennantPark Investment, a financial firm based in Miami, is another investor.

Fox said in a legal filing that Staple Street paid $38.3 million in 2018 to acquire 76.2 percent of Dominion. At the time, the private equity firm valued the technology vendor at $80 million, or one-twentieth of the $1.6 billion in damages that Dominion is seeking from Fox, according to Fox’s filing.

Staple Street’s owners, Stephen D. Owens and Hootan Yaghoobzadeh, first worked together in 1998 on buyouts for the Carlyle Group, a private equity giant. (Their résumés also feature stints at Lehman Brothers and Cerberus Capital Management.) The firm’s board of directors includes a former chief executive of Dunkin’ Brands as well as a former chairman of the Federal Communications Commission and ambassador to the European Union.

Staple Street declined to comment.

On its website, Staple Street says it has $900 million of assets under management — mostly midsize companies such as a flower bulb distributor in New Jersey, an accounting and payroll reporting service popular with restaurant chains, a support organization for dental clinics and, at one point, the theme park operator Six Flags.

Fox said in its filing that Mr. Yaghoobzadeh had authorized Dominion’s lawsuit against the network. The lawsuit, Fox said, is meant to generate publicity, deter negative reporting and “unjustly enrich” Staple Street.

Fox cited discovery documents that it said showed Dominion “in a solid financial position, maintaining substantial cash, carrying no debt and producing a steady return on investment” to Staple Street. In 2021, Dominion paid full bonuses to its employees and executives and projected $98 million in revenue for 2022, Fox said.

Last year, when asked whether he believed that Dominion was a “toxic” company after the 2020 election, Mr. Owens answered, “That’s correct.”

A Business in Flux

In its complaint, which it filed in 2021, Dominion accused Fox of broadcasting lies that “deeply damaged” its “once-thriving” business, “one of the fastest-growing technology companies in North America” with a potential value of more than $1 billion.

Shasta County, a rural area in Northern California that has become a hotbed for election denial, terminated its Dominion contract in January. Lawmakers in Montgomery County in Pennsylvania renewed a deal with Dominion for $518,052 in February, the same month that officials in Kern County, north of Los Angeles, narrowly approved a three-year, $672,948 contract after hours of heated debate.

Dominion’s contracts with local and state governments typically last for several years and range from tens of thousands of dollars to more than $100 million, the company said in its complaint against Fox. The company estimated that misinformation about the company had cost it more than $600 million in profits.

In an expert witness report submitted in the case late last year, Mark J. Hosfield, a managing director of the investment bank and advisory firm Stout, wrote that the false narratives had led Dominion to lose $88 million in profits from current and future opportunities. He also wrote that Fox’s coverage had caused the value of Dominion’s equity and debt to drop $920.8 million. Dominion’s renewal rate with clients had historically been 90 percent, he said.

Fox has said the $1.6 billion that Dominion is seeking is “a staggering figure that has no factual support” and was “pulled out of thin air.” There has been no evidence of Dominion’s laying off employees, closing offices, defaulting on credit obligations or suffering canceled contracts as a result of Fox’s coverage, the network said.

Fox said in other court filings last year that “Dominion’s calculations are riddled with mathematical overstatements” and losses misattributed to damaging news coverage, and that the company had beaten revenue forecasts that it set before the election.

“Dominion’s lawsuit is a political crusade in search of a financial windfall, but the real cost would be cherished First Amendment rights,” Fox said in a statement.

Dominion, in a statement said: “In the coming weeks, we will prove Fox spread lies causing enormous damage to Dominion. We look forward to trial.”

An Important but Mysterious Industry

The elections technology industry has few major players and offers little public information about its finances. Dominion is most likely the second-largest company of its kind operating in the United States, behind Election Systems & Software in Nebraska, according to Verified Voting, an election security nonprofit.

Both companies, along with Hart InterCivic in Texas, have acquired smaller competitors over the past two decades. As of 2016, the three vendors served more than 90 percent of eligible voters in the country, according to a report from the Wharton School at the University of Pennsylvania.

Wharton researchers at that point described the election technology business as having “all the aspects of an industry that new investors would want to avoid — a costly regulatory environment, constrained market size, cost-conscious customers, and concentrated and entrenched vendors.”

The Brennan Center for Justice estimated last year that replacing outdated voting equipment over the next five years could cost more than $580 million. A group of Democratic lawmakers, including Senator Elizabeth Warren of Massachusetts, sent letters in 2019 to Staple Street and other private equity firms that had invested in election technology companies, voicing concern about industry consolidation and the maintenance of voting machines. In response, Staple Street wrote to Ms. Warren that it spent roughly 10 to 20 percent of its revenue on research and development.

Susan C. Beachy contributed research