Michigan firm linked to election worker data breach; Detroit ends contract

• Konnech owner Eugene Yu arrested Tuesday and expected to face charges in California
• His East Lansing firm is accused of storing election worker data on Chinese servers
• Detroit cancels contract, says election integrity “remains unquestioned”

LANSING — Detroit’s elections department is terminating its contract with a Michigan-based software firm whose owner is expected to face criminal charges in California related to a potential breach of poll worker data. 

In a statement provided to Bridge Michigan, Clerk Janice Winfrey said identifying information about Detroit election workers "remains secure" and is now under the "exclusive control" of the city, which had contracted with the Konnech Corporation only for "logistical and call center support."

Konnech’s founder, 64-year-old Eugene Yu of Okemos, is facing at least one felony charge in Los Angeles County, where he is accused of violating a $2.9 million contract by storing election worker data on a Chinese server. 

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Yu intends to "vigorously" fight the charge and is "not aware of any data being stored in China," his defense attorney said earlier this week during a bond hearing in Michigan, where he was arrested Tuesday.

L.A. County District Attorney George Gascón announced Yu had been taken into custody on "suspicion of theft of personal identifying information.”

Gascón made clear the alleged conduct had "no impact on the tabulation of votes and did not alter election results.” The investigation, he said, is "concerned solely with the personal identifying information of election workers.”

Konnech develops and sells election management software used by various municipalities, including L.A. and Detroit. The firm employs about 20 people in East Lansing, where it recently expanded with a $306,000 grant from the Michigan Economic Development Corp.

The company last month filed a defamation lawsuit against a Texas non-profit, alleging loyalists of former President Donald Trump had bragged about hacking Konnech servers and falsely claimed the firm is "a vehicle for the Chinese Communist Party to breach U.S. elections."

A spokesperson for the Michigan Secretary of State’s office said she is not aware of any local jurisdictions other than Detroit that have contracts with Konnech, although she acknowledged county or municipal clerks are not required to report that information to the state. 

“Konnech operates a payroll management system for poll workers that is used by Detroit and has never had access to voter data or election data,” said state spokesperson Angela Benander.

“The Michigan Bureau of Elections does not contract with Konnech. Michigan elections remain secure and voters can be confident in their integrity and accuracy.”

Winfrey, the Detroit clerk, called the allegations against Konnech "deeply concerning" but said any city election worker data was stored on servers in Lansing, per contract. "The integrity of our election process remains unquestioned, and all employee data remains secure," she said.

Detroit’s decision to terminate its contract with Konnech was first reported Thursday by The Detroit News. 

Yu will be charged in L.A. under a felony embezzlement law, according to court records in Michigan, but he is not accused of embezzling any money and intends to fight the accusation he stole election worker data, defense attorney Mark Kriger said Tuesday in an Ingham County court. 

A family man who became a U.S. citizen in 1997, Yu has been “fully cooperative” with L.A. investigators and the F.B.I. who he met with a month ago to discuss allegations of a potential data breach, Kriger said in 55th District Court. 

Yu is also facing a misdemeanor charge in Michigan for allegedly attempting to flee before his arrest. He was apprehended Tuesday en route to the airport without his cell phone, according to Ingham County Assistant Prosecutor Nicole Matusko, who on Tuesday called him a “significant flight risk.”

Kriger told a local judge that Yu did not know a warrant for his arrest had been issued and was preparing to fly to Texas for a hearing on his defamation lawsuit against True the Vote, a non-profit that has been at the center of ongoing attempts to try and prove that election fraud cost Trump the 2020 election.

In suing the group last month, Konnech attorney Constantine Pamphilis accused True the Vote of racism and xenophobia for claiming Yu and his employees are "Chinese operatives."

Konnech “does not, and has never, stored any actual customer or poll worker data on any server in China as defendants falsely claim," she wrote in a complaint.

In that Texas case, U.S. District Court Kenneth Hoyt granted Konnech's request for a temporary restraining order. It prohibits True the Vote from disclosing any information downloaded from Konnech servers and requires the nonprofit to identify anyone involved in the alleged breach.

Yu was released from Ingham County jail on Thursday after paying the 10 percent cash surety on a $1 million bond set by 55th District Circuit Court Judge Donald Allen. 

He is “expected to self-surrender” to L.A. county authorities “soon,” Ingham County Assistant Prosecuting Attorney Nicole Matusko told Bridge Michigan in a Friday morning email.