HOW OLD ETONIAN’S HONEY-TRAP BOASTS COST ZUCKERBERG £5BILLION

Drinking champagne in the dimly-lit bar of a Belgravia hotel, Alexander nix outlined some dark arts his political consulting firm, Cambridge Analytica, might use to interfere with a foreign election. One idea floated by the smooth Old Etonian involved hiring Eastern European prostitutes to seduce a rival party’s candidate, before leaking secretly-recorded footage of the ensuing tryst to a news outlet.

‘We could send some girls around to the candidate’s house,’ he declared. ‘We could bring some Ukranians in on holiday with us, you know what i’m saying? They are very beautiful. i find that works very well.’

Failing that, Cambridge Analytica would hire someone to pose as a crooked businessman, who would offer the rival politician a bribe. ‘We’ll have a wealthy developer come in, someone posing as a wealthy developer, a master of disguise. They will offer a large amount of money to a candidate to finance his campaign in exchange for land, for instance, [and] we’ll have the whole thing recorded on cameras. We’ll blank out the face of our guy and then post it on the internet.’

nix seemed to care little for such trifling issues as ethics, or the rule of law.

His London-based company is accustomed to operating under the radar of electoral authorities, using a shadowy network of former spies to winkle skeletons out of closets, and using psychological data gleaned from social media platforms such as Facebook to target swing voters with highly partisan (and sometimes downright misleading) political adverts.

Cambridge Analytica is also, he said, adept at setting up opaque shell companies to hide its activities from the citizens whose behaviour it sought to influence.

‘They [our staff] will set up fake iDs and websites... There’s so many options. i’ve had lots of experience like this,’ he boasted.

‘We’ve just used a different organisation to run a very, very successful project in an eastern European country. no-one even knew they were there. They just ghosted in, ghosted out, and produced really, really good material.’

Nix thought that the middle-aged Asian man sitting across the table worked for one of Sri Lanka’s wealthiest families, who were willing to spend vast amounts of money to ensure that politicians hostile to their interests would not achieve power there.

Such clients have spent small fortunes with Cambridge Analytica, helping turning nix into a seriously rich man feted by the tech industry.

The 42-year- old, who spoke alongside Facebook chiefs at last year’s ‘ Online Marketing rockstars’ conference in Hamburg, keeps his Savile row suits at a vast home in London’s Holland Park, which he and his girlfriend, norwegian shipping heiress Caroline Paus, bought for £4.5million in February 2012.

This time, however, nix was sadly mistaken. For the wouldbe customer was in fact an undercover reporter working for Channel 4 news who, in a deliciously ironic twist, was secretly videotaping their conversation.

Footage of the encounter was broadcast on Monday, just 24 hours after The Observer sensationally accused Cambridge Analytica of illegally harvesting personal details from more than 50million Facebook accounts without the permission of users, before using that data to help insert Donald Trump in the White House.

The insight the footage offered into the firm’s corporate culture provided fresh impetus to a scandal which has wiped more than £39billion off Facebook’s share price – costing founder Mark Zuckerberg more than £5billion personally.

And it has prompted calls for criminal investigations and public inquiries on both sides of the Atlantic. Elizabeth Denham, the Uk information Commissioner, was yesterday racing to get a court warrant allowing her investigators to raid the Mayfair offices of Cambridge Analytica, where whistleblowers claim files of supposedly-private Facebook records are being illegally held – years after they were supposed to have been destroyed.

in an astonishing twist, it emerged that the Silicon Valley giant’s lawyers were themselves already searching nix’s offices, prompting Denham to order them to ‘ back away’ to avoid interfering with the ‘integrity’ of her investigation.

Meanwhile, MPs summoned Zuckerberg to Parliament to explain why his firm’s senior staff have not just issued misleading public statements about the affair, but obfuscated while giving evidence to MPs and failed to contact the millions of victims whose personal information has been compromised.

At the heart of the controversy lie two great issues of the internet age. Firstly, can the increasingly ubiquitous internet giants be trusted to properly handle the unprecedented levels of often intimate data they hold about an increasing portion of the world’s population?

And secondly, in the era of ‘fake news’, is such data capable of being exploited by rogue individuals, organisations, or even hostile regimes, to subvert Western democracy? recent years have seen organisations such as Facebook, google, and to a lesser extent Apple and Twitter, accumulate personal information about their users on a scale that is unprecedented in human history.

FACEBOOk, which has 2.2 billion active account holders (encompassing a quarter of the world’s population) knows everything from where we live and our date of birth to who we socialise with, what our ‘relationship’ status is, where we holiday and what shops and restaurants we visit.

Every time a user posts a picture, uploads a comment, or ‘likes’ – Facebook speak for endorsing – a post from a contact, the firm finds out a little bit more about what makes them tick.

On a very basic level, this allows the company to make money by allowing advertisers to target consumers who might be particularly prone to buying

their product. For example, Facebook users who announce the birth of a child might find themselves being bombarded with adverts for baby clothes. Someone who regularly posts images of the dinner they’ve cooked might be offered kitchen products. And those who post photos from a holiday resort might stumble across adverts for local attractions.

Yet on a more advanced – and some might say sinister – front, the data we share on the platform can be used without our knowledge to build up very detailed psychological profiles that contain intimate information about such subjects as our likely sexuality, social class, intelligence and political persuasions.

All of which brings us back to Cambridge Analytica. A decade ago, researchers at Cambridge University developed a Facebook ‘ app’ called ‘ my personality’, which allowed users to take a test that gave them scores for different personal traits. Around 40 per cent of these users allowed the ‘ app’ access to their Facebook profiles, meaning that it was possible to for researchers to correlate the personality traits with the sorts of things the users had ‘liked’ on the platform.

The original findings were curious, if somewhat useless. They discovered, for example, that people who had liked posts saying ‘I hate Israel’ were disproportionately fond of Nike trainers and KitKat chocolate bars. And adult users fond of the children’s toy Hello Kitty were likely to be keenly interested in politics.

Over time, the researchers were able to refine such correlations to make more detailed predictions. Eventually, once they had analysed between 15 and 20 likes from a single user they were able to predict who that user might vote for. With knowledge of 150 likes, their model could predict someone’s personality better than their spouse could. If they had 300 likes to go on, they could understand a Facebook user better than the user themselves.

In 2014, Cambridge Analytica – which was adept at helping political campaigns tailor messages to play on the fears of electorates in countries such as India and Kenya – decided to use this phenomenon to help target the campaign strategy for the upcoming US general election.

The firm, which was financed by a major Republican donor called Robert Mercer – and would later have the Trump strategist Steve Bannon on its board – hired a Cambridge University scientist called Aleksandr Kogan to build an app that would identify the relatively small numbers of swing voters who would decide the election, and help craft tailored messages that could be delivered to them. Working outside his academic duties, Kogan created a copycat app to ‘my personality’ called ‘this is my digital life’. He then paid around 320,000 Americans to take the personality test. Each was asked if their Facebook profiles could be accessed, ostensibly for academic research purposes. About 280,000 consented.

What the users weren’t told, however, was that the information on their Facebook profiles was actually being collected and harvested for commercial gain.

Neither were they told that Kogan’s app was also collecting data concerning their friends. On average, each of the ‘seeders’ who agreed to take the test unwittingly helped Cambridge Analytica gain access to an average of 160 others, meaning that it eventually harvested data from no fewer than 50 million profiles. Fast forward to the 2016 US election, and Cambridge Analytica was able to match this haul of data to electoral rolls, allowing Trump’s strategists to carefully calibrate campaign messages to resonate exactly with the hopes and fears of the voters it needed to win.

Often they found themselves bombarded with negative adverts about Hillary Clinton, or viral videos that contained what critics dubbed ‘fake news’.

Though Trump lost the popular vote, this helped him win the key marginal states, and with it the White House.

IN

a subsequent speech, Nix, whose firm was paid around £4.8million boasted that ‘pretty much every message Trump put out was data-driven’. There was, however, a problem. Or rather, an array of problems. First, the data behind this campaign was obtained without the consent of the majority of the individuals it concerned.

Second, the way it was gathered broke Facebook’s own policies, governing the way the personal details of users were supposed to be protected.

Third, those who took part in Cambridge Analytica’s survey were told, wrongly, that their data would only be gathered for academic research purposes. Fourth, US law makes it illegal to employ foreigners in political campaigns. And lastly, British law prohibits the selling of private data for commercial purposes without consent. Against this backdrop, a tranche of emails, contracts, and legal records made public by Christopher Wylie, a former Cambridge Analytica data analytics expert who turned whistleblower at the weekend, raises serious questions about his former firm and its relationship with Facebook.

The web giant seems to have found out about the data breach in 2015. But it did nothing to notify victims, or to secure the harvested information – even after the first news reports about the affair began to trickle out last year. As late as yesterday, the New York Times was reporting that copies of the private data could still be found online.

MEANWHILE, in the face of a growing sense of scandal on both sides of the Atlantic, Facebook and Cambridge Analytica have proceeded to obfuscate.

As recently as last month Simon Milner, Facebook’s UK policy director, told MPs investigating the phenomenon of fake news that Cambridge Analytica did not hold data from his social network. That was untrue. last night, Facebook was, bizarrely, continuing to deny that the exploitation of personal information of 50 million people is a data breach.

Nix, meanwhile, told Parliament that his firm did not hold any data obtained by Kogan. In a more recent statement to the Mail, Cambridge Analytica claimed it ‘is not a data mining company’ and ‘does not obtain data from social media profiles or likes such as on Facebook.’ Both comments seem impossible to reconcile with known facts. But as the video by Channel 4 News shows, the political consulting firm whose behaviour threatens the future of the world’s largest social network is no stranger to the darkest of dark arts. Nix was last night suspended by Cambridge Analytica. But whether that will do anything but inflame the scandal remains to be seen.