Face­book backs Sand­berg’s han­dling of re­search into Soros

Board let­ter says COO is truth­ful about knowl­edge of PR firm’s work re­gard­ing in­vestor

The Niagara Falls Review - - The Wall Street Journal - DEEPA SEETHARA­MAN

Face­book Inc.’s board of di­rec­tors threw its sup­port be­hind Chief Op­er­at­ing Of­fi­cer Sh­eryl Sand­berg on Wed­nes­day, say­ing that it was “en­tirely ap­pro­pri­ate” for her to ask if Ge­orge Soros had shorted the com­pany’s stock af­ter the bil­lion­aire in­vestor called the so­cial-me­dia giant a “men­ace.”

Face­book’s gen­eral coun­sel Colin Stretch sent a let­ter from the board to Pa­trick Gas­pard, pres­i­dent of Mr. Soros’s Open So­ci­ety Foun­da­tions. Mr. Gas­pard has been among those who have crit­i­cized or ques­tioned Ms. Sand­berg’s han­dling of the mat­ter.

“To be clear, Ms. Sand­berg’s ques­tion was en­tirely ap­pro­pri­ate given her role as COO,” Mr. Stretch wrote. “When a well­known and out­spo­ken in­vestor at­tacks your com­pany pub­licly, it is fair and ap­pro­pri­ate to do this level of dili­gence.”

The let­ter was a show of sup­port for Ms. Sand­berg, one of the tech in­dus­try’s most prom­i­nent ex­ec­u­tives, as in­vestors, reg­u­la­tors, and users re­new pres­sure on both her and the com­pany fol­low­ing a se­ries of man­age­ment mis­steps.

Face­book CEO Mark Zucker­berg is chair­man of the board of di­rec­tors.

Mr. Stretch sent the mes­sage at the Face­book board’s re­quest in re­sponse to a let­ter Mr. Gas­pard pub­li­cized Tues­day. In that com­mu­ni­ca­tion, Mr. Gas­pard said that Ms. Sand­berg had mis­led him dur­ing a pri­vate phone call on Nov. 15 about her knowl­edge of com­pany-com­mis­sioned op­po­si­tion re­search into Mr. Soros by De­fin­ers Pub­lic Af­fairs, a con­sult­ing firm that Face­book tasked with scru­ti­niz­ing de­trac­tors.

Dur­ing that call, Ms. Sand­berg “as­sured me that she knew ab­so­lutely noth­ing about th­ese ef­forts, which in­cluded oppo re­search on Ge­orge Soros,” Mr. Gas­pard wrote in a his Dec. 4 let­ter to the com­pany’s board of di­rec­tors. “It is now clear from the news that Ms. Sand­berg did not speak in good faith.”

On Wed­nes­day, Mr. Stretch dis­puted Mr. Gas­pard’s char­ac­ter­i­za­tion, say­ing Ms. Sand­berg had been truth­ful to him about her knowl­edge of De­fin­ers’s work re­gard­ing Mr. Soros. Open So­ci­ety didn’t im­me­di­ately re­turn a re­quest for com­ment.

The ex­change be­tween Mr. Soros’s group and Face­book is the lat­est twist in a dif­fi­cult two years for the so­cial-me­dia com­pany, where em­ployee morale has col­lapsed as the com­pany has faced one con­tro­versy af­ter an­other.

Mr. Gas­pard’s com­ments weren’t even the only firestorm this week. Ear­lier Wed­nes­day, Bri­tish law­mak­ers shared 250 pages of in­ter­nal Face­book doc­u­ments show­ing how com­pany ex­ec­u­tives, in­clud­ing Mr. Zucker­berg, sought to lever­age its de­vel­oper plat­form.

Also Wed­nes­day, Stifel an­a­lysts down­graded Face­book shares to a hold, cit­ing the com­pany’s in­ter­nal and po­lit­i­cal is­sues.

“Face­book’s man­age­ment team has cre­ated too many ad­ver­saries—politi­cians/reg­u­la­tors, tech lead­ers, con­sumers, and em­ploy­ees—to not ex­pe­ri­ence long-term neg­a­tive ram­i­fi­ca­tions on its busi­ness,” the an­a­lysts wrote.

Ms. Sand­berg’s in­volve­ment in the Soros mat­ter has been un­der scru­tiny since The New York Times re­ported last month that Face­book had hired De­fin­ers in part to push back against the com­pany’s crit­ics.

On Nov. 15, Ms. Sand­berg said she didn’t know about De­fin­ers and the work the firm was do­ing for the com­pany.

The fol­low­ing week, she re­vised her state­ment to say that some of De­fin­ers’s work was “in­cor­po­rated into ma­te­ri­als pre­sented to me and I re­ceived a small num­ber of emails where De­fin­ers was ref­er­enced.”

Last week, Face­book con­firmed that Ms. Sand­berg sent an email to her staff in Jan­uary ask­ing whether Mr. Soros has shorted the com­pany’s stock af­ter the lib­eral phi­lan­thropist called in­ter­net “mo­nop­o­lies” a “men­ace” in a speech at the World Eco­nomic Fo­rum.

Face­book of­fi­cials had al­ready asked De­fin­ers to look into Mr. Soros when Ms. Sand­berg sent her email, ac­cord­ing to a Face­book spokesman.

“She told you, truth­fully, that she had not known about the work done by the De­fin­ers pub­lic re­la­tions firm re­lated to Mr. Soros,” Mr. Stretch wrote Wed­nes­day, ad­ding that Ms. Sand­berg takes “full re­spon­si­bil­ity” for work done un­der her watch.

The let­ter also out­lines var­i­ous steps Face­book has taken since the 2016 U.S. pres­i­den­tial elec­tion to se­cure its plat­form from bad ac­tors try­ing to spread dis­in­for­ma­tion, in­clud­ing by set­ting up an in­de­pen­dent elec­tion com­mis­sion to ex­plore the re­la­tion­ship be­tween so­cial net­works and democ­racy.

“Much ad­di­tional work re­mains, but to be clear th­ese are not the ac­tions of a com­pany that has, in your words, ‘failed to take re­spon­si­bil­ity’,” Mr. Stretch wrote.


Face­book con­firmed Sh­eryl Sand­berg emailed her staff in Jan­uary ask­ing whether Ge­orge Soros had shorted the com­pany’s stock.

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