Originally Published: 11 APR 23 07:10 ET

By Fredreka Schouten and Marshall Cohen, CNN

(CNN) -- First, the Shasta County Board of Supervisors in rural northern California voted to cancel its contract with Dominion Voting Systems, citing public distrust of the company's machines.

Then, the supervisors agreed to shift to hand-counting ballots in future elections after receiving written assurance from one of the most vocal 2020 election deniers -- MyPillow CEO Mike Lindell -- that he would provide "financial and legal" resources to the county if it faced "pushback" over the move.

The decision by a majority of supervisors in this deeply conservative county to end the Dominion contract -- years before its expiration date and over the objection of the county's top election official -- illustrates how the attacks against the company continue to reverberate more than two years after the 2020 election. Dominion is preparing to face off in the coming days against Fox News in a Delaware courtroom in a high-profile $1.6 billion defamation lawsuit. Dominion claims the network "recklessly disregarded the truth" by peddling conspiracies advanced by former President Donald Trump and his allies about its voting systems. Fox News has denied any wrongdoing.

Dominion has also sued Lindell and Trump-aligned attorneys Sidney Powell and Rudy Giuliani, along with two smaller right-wing networks, Newsmax and One America News Network. Each lawsuit offers detailed rebuttals of the conspiracy theories that have flourished in pockets of the country and conservative media circles ever since Trump and his allies began pushing claims that the 2020 presidential election was stolen.

The recent actions by Shasta County "shows the lasting power of these lies," said Larry Norden, senior director of the elections and government program at the liberal-leaning Brennan Center for Justice at New York University's law school.

"And it's having real-life consequences in the way we are going to be running our elections this year and next," he said.

Officials with Dominion called Shasta's move "yet another example of how lies about Dominion have damaged our company" but declined further comment on the county's action.

The Shasta supervisors who voted to end the contract said they acted because public trust in the Dominion machines had eroded. "You can't put a price tag on voter trust," they said in a statement explaining their decision.

Dominion has argued in the Fox lawsuit that canceled contracts like these, and lost business opportunities going forward, are why it deserves $1.6 billion in damages. Fox News has aggressively pushed back against that figure, claiming Dominion manipulated the underlying data to generate a highly inflated, attention-grabbing number.

Started in a Toronto basement

Dominion, which began some two decades ago in the Toronto home of its co-founder and CEO John Poulos, has become one of the biggest suppliers of voting machines and software in the US.

In 2020, Dominion Voting Systems operated in 28 states -- including jurisdictions in key presidential battleground states that Democrat Joe Biden flipped on his way to winning the White House, such as Georgia, Michigan and Arizona.

Poulos, who has an undergraduate degree in electrical engineering, has said he launched the company, in part, because of a desire to help people with disabilities cast ballots without assistance and to improve how paper ballots were marked and counted -- after watching the hanging chad debacle in Florida during the 2000 presidential election. (A federal law enacted in 2002 changed some voting procedures in federal elections and required jurisdictions to provide at least one accessible voting system for people with disabilities in each polling place, growing the market for new devices.)

A New York-based private equity firm, Staple Street Capital, acquired most of Dominion in 2018, and its US headquarters are in Denver. According to court filings in the Fox litigation, Staple Street Capital paid about $38.3 million to buy an approximately 75% stake in Dominion.

Within days of the 2020 general election, Trump and his top surrogates, including Powell and Giuliani, began spreading unfounded conspiracy theories about Dominion -- including claims that its machines had switched votes from Trump to Biden, that it was an instrument of Democratic political figures or that it was a tool of Communist regimes in Latin America.

Some of the Dominion lies appear to have originated from a Minnesota woman, who emailed Powell, then-Fox host Lou Dobbs and GOP legal activist Tom Fitton hours after news outlets projected Biden's victory on November 7, 2020. The woman claimed Dominion was a Democratic front that led a multi-state scheme to steal the election, though she said her theories came from "the wind," which speaks to her, and admitted they were "pretty wackadoodle," according to court filings.

In the following days, Powell and Giuliani parroted many of these same unfounded claims about Dominion on Dobbs' show on Fox Business Channel and other Fox programs. Many of those appearances are at the heart of Dominion's defamation case against Fox.

For its part, Fox denies that it defamed Dominion or anyone else, and says its on-air personalities were merely covering newsworthy allegations of election irregularities from public figures, who held prominent roles as top advisers to the sitting president.

In late 2020, Poulos became more public-facing as he defended the company.

"Dominion has not and has never been a front for Communists," he told a Michigan Senate oversight committee in December of that year, as he rattled off an array of fast-spreading conspiracy theories. "Dominion has no ties to the Pelosi family, Feinstein family, Clinton family or George Soros."

"The comments about our company being started in Venezuela with Cuban money with the intent to steal elections are beyond bizarre and are complete lies," he added. "My company started in my basement, which happened to be in Toronto, and our only intention was to help blind people vote on paper ballots."

(The GOP-led Senate oversight committee ultimately concluded there was "no evidence of widespread or systematic fraud" in the state's 2020 election, which Biden won by nearly 3 percentage points.)

A Dominion spokesman declined to make Poulos available for a CNN interview, citing the upcoming trial in Wilmington, Delaware. It is slated to begin April 17, with jury selection scheduled to start Thursday -- barring a last-minute settlement, which is always possible.

But Poulos has spoken publicly about the high cost for him, his family and employees. All have faced threats, he said.

In a "60 Minutes" interview last October, Poulos said that the threats had remained so pervasive that his children still were barred from retrieving packages from the front door "until we verify that it`s actually from a trusted sender."

He added, "it's important to all the people whose families have been impacted by this" for those who spread falsehoods about the company to admit they were wrong.

In court filings last week, Fox asked the judge to block Dominion from bringing up death threats like these at the trial. The network called the threats "horrific and absolutely inexcusable" but argued that they would "arouse the jury's sympathy" and distract from the legal questions at hand.

Dominion v. Goliath

Dominion already has made waves with its defamation lawsuit against the media heavyweight.

Pre-trial filings have seen the release of incriminating texts and emails that show Fox News' executives, hosts and producers privately doubted the claims the network was airing publicly about Dominion.

In one eye-popping message that was disclosed as part of the litigation, Fox News star Tucker Carlson said he "passionately" hates Trump and that Trump's presidency was a failure. In the November 2020 text exchange, Carlson said, "We're all pretending we've got a lot to show for it, because admitting what a disaster it's been is too tough to digest. But come on. There isn't really an upside to Trump."

And more revelations may be on the way. Last week, a Delaware judge ruled that Dominion can force Fox Corporation executives Rupert and Lachlan Murdoch to testify in person at the trial.

Fox's lawyers contend that pinning any potential damage to Dominion's business on the network's coverage ignores other reasons why the company may be facing additional scrutiny from its clients. Fox has highlighted other issues such as internal criticism from Dominion employees, including one who wrote, "Our products suck."

Doubts in a conservative county

During a public meeting earlier this year in Redding, California -- nearly 3,000 miles away from the Delaware courtroom where Dominion and Fox News' legal skirmishes have played out -- Patrick Jones, the chairman of the Shasta County Board of Supervisors, quoted claims from Fox News' legal filings to argue that Dominion's machines are "riddled with bugs." The email was sent in October 2020 by Dominion's director of product strategy and security.

He joined two other members of the five-person board in the vote to scrap the contract. "People do not trust electronic machines," Jones said. "We do not trust them, and we have to restore trust."

Jones declined an interview request this week, saying CNN "will not tell the truth." Another Shasta supervisor, Kevin Crye -- who says he secured Lindell's financial support and also backed ending the Dominion contract -- did not respond to a CNN inquiry.

Now, the county, home to roughly 111,000 of the state's nearly 22 million registered voters, is working to devise a new way of running its elections, ahead of local elections in November. Last week, the board approved spending $950,000 with another vendor to purchase the equipment and software needed to provide accessible voting to disabled residents and to assist with the planned hand count.

Cathy Darling Allen, the county's elected clerk and a Democrat, opposed ending the $262,000-a-year contract to lease the Dominion machines. She estimates that hand-counting all ballots in a presidential election will require hiring more than 1,200 temporary workers at a cost of $1.6 million. And she and state officials have warned that a manual tally could come with high error rates.

"This feels very much like an answer looking for a problem to solve," Darling Allen told CNN. "We don't have a problem in Shasta County with elections, and yet here we are."