Facebook questioned as Cambridge Analytica CEO claims poll influence
LONDON/SAN FRANCISCO — The suspended chief executive officer (CEO) of Cambridge Analytica said in a secretly recorded video broadcast on Tuesday that his UK-based political consultancy’s online campaign played a decisive role in US President Donald Trump’s 2016 election victory.
CEO Alexander Nix’s comments, which could not be verified, are potentially a further problem for Facebook, Inc. as it faces lawmakers’ scrutiny in the US and Europe over Cambridge Analytica’s improper use of 50 million Facebook users’ personal data to target voters.
The social media network’s shares fell for a second day, closing down 2.5%, as investors worried that its dealings with Cambridge Analytica might damage its reputation, deter advertisers and invite restrictive regulation. The company has lost $60 billion of its stock market value over the last two days.
Cambridge Analytica’s board of directors suspended Mr. Nix on Tuesday, shortly before the second part of British broadcaster Channel 4’s exposé of the firm’s methods.
In the program, Mr. Nix describes questionable practices used to influence foreign elections and said his firm did all the research, analytics and targeting of voters for Mr. Trump’s digital and TV campaigns. He also boasts he met Mr. Trump when he was the Republican presidential candidate “many times.”
Mr. Nix’s comments “do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation,” Cambridge Analytica said in a statement on Tuesday.
Cambridge Analytica has denied all the media claims and said it deleted the data after learning the information did not adhere to data protection rules.
Brad Parscale, the 2016 Mr. Trump campaign’s main digital adviser who dealt regularly with Cambridge Analytica, did not immediately respond to a request for comment on Mr. Nix’s claims.
Jared Kushner, Mr. Trump’s son- in- law and now senior adviser, oversaw the Mr. Trump campaign’s digital operations.
One former Mr. Trump adviser said Mr. Kushner brought Cambridge Analytica into the 2016 campaign effort. Mr. Kushner’s lawyer did not immediately respond to a request for comment.
Cambridge Analytica whistleblower Christopher Wylie told the Washington Post on Tuesday that in 2014 conservative strategist Steve Bannon, who would go on to be Mr. Trump’s White House adviser, oversaw the firm’s early efforts to collect Facebook data to build detailed profiles on millions of American voters.
Mr. Bannon approved spending nearly $1 million to acquire data, including Facebook profiles, in 2014, Mr. Wylie told the Post. It is unclear whether Mr. Bannon knew how Cambridge Analytica was obtaining the Facebook data, the Post reported.
Mr. Bannon, who served on Cambridge Analytica’s board, did not immediately respond to a request for comment from Reuters.
US law bans foreigners from making contributions or spending money on behalf of a US election campaign but it was not illegal for the Mr. Trump campaign to retain Cambridge Analytica’s services, according to Bradley Smith, a former Republican member of the US Federal Election Commission.
“The fact that they are a British company doesn’t add anything to the analysis unless they were giving their services away for free or charging below-market rates,” said Mr. Smith, now a professor at the Capital University Law School in Columbus, Ohio.
US and European lawmakers have demanded an explanation of how Cambridge Analytica gained access to user data in 2014 and why Facebook failed to inform its users, raising broader industry questions about consumer privacy.
Facebook said it had been told by the Federal Trade Commission (FTC), the leading US consumer regulator, that it would receive a letter this week with questions about the data acquired by Cambridge Analytica. It said it had no indication of a formal investigation.
“The entire company is outraged we were deceived,” Facebook said in a statement on Tuesday. “We are committed to vigorously enforcing our policies to protect people’s information and will take whatever steps are required to see that this happens.”
The FTC is reviewing whether Facebook violated a 2011 consent decree it reached with the authority over its privacy practices, a person briefed on the matter told Reuters.
Facebook was also hit on Tuesday in a San Francisco court by the first of what could be many lawsuits by shareholders claiming to suffer losses because the firm misled them about its ability to protect user data. The company could also soon face lawsuits on behalf of users whose personal information was exposed.
Created in 2013, Cambridge Analytica markets itself as a source of consumer research, targeted advertising and other data-related services to both political and corporate clients. According to The New York Times, it was launched with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by Mr. Bannon.
Facebook says the data were harvested by a British academic, Aleksandr Kogan, who created an app on the platform that was downloaded by 270,000 people, providing access not only to their own personal data but also data from their friends.
Facebook said Mr. Kogan then violated its policies by passing the data to Cambridge Analytica.
Facebook has since suspended both the consulting firm and SCL (Strategic Communication Laboratories), a government and military contractor. —