LONDON
— As the upstart voter-profiling company Cambridge Analytica prepared
to wade into the 2014 American midterm elections, it had a problem.
The firm had secured a $15 million investment from Robert Mercer,
the wealthy Republican donor, and wooed his political adviser, Stephen
K. Bannon, with the promise of tools that could identify the
personalities of American voters and influence their behavior. But it
did not have the data to make its new products work.
So
the firm harvested private information from the Facebook profiles of
more than 50 million users without their permission, according to former
Cambridge employees, associates and documents, making it one of the
largest data leaks in the social network’s history. The breach allowed
the company to exploit the private social media activity of a huge swath
of the American electorate, developing techniques that underpinned its
work on President Trump’s campaign in 2016.
An
examination by The New York Times and The Observer of London reveals
how Cambridge Analytica’s drive to bring to market a potentially
powerful new weapon put the firm — and wealthy conservative investors
seeking to reshape politics — under scrutiny from investigators and
lawmakers on both sides of the Atlantic.
Christopher
Wylie, who helped found Cambridge and worked there until late 2014,
said of its leaders: “Rules don’t matter for them. For them, this is a
war, and it’s all fair.”
“They
want to fight a culture war in America,” he added. “Cambridge Analytica
was supposed to be the arsenal of weapons to fight that culture war.”
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Details of Cambridge’s acquisition and use of Facebook data have surfaced in several accounts since the business began working on the 2016 campaign, setting off a furious debate about the merits of the firm’s so-called psychographic modeling techniques.
But
the full scale of the data leak involving Americans has not been
previously disclosed — and Facebook, until now, has not acknowledged it.
Interviews with a half-dozen former employees and contractors, and a
review of the firm’s emails and documents, have revealed that Cambridge
not only relied on the private Facebook data but still possesses most or
all of the trove.
Cambridge
paid to acquire the personal information through an outside researcher
who, Facebook says, claimed to be collecting it for academic purposes.
During
a week of inquiries from The Times, Facebook downplayed the scope of
the leak and questioned whether any of the data still remained out of
its control. But on Friday, the company posted a statement expressing alarm and promising to take action.
“This
was a scam — and a fraud,” Paul Grewal, a vice president and deputy
general counsel at the social network, said in a statement to The Times
earlier on Friday. He added that the company was suspending Cambridge
Analytica, Mr. Wylie and the researcher, Aleksandr Kogan, a
Russian-American academic, from Facebook. “We will take whatever steps
are required to see that the data in question is deleted once and for
all — and take action against all offending parties,” Mr. Grewal said.
Alexander
Nix, the chief executive of Cambridge Analytica, and other officials
had repeatedly denied obtaining or using Facebook data, most recently
during a parliamentary hearing last month. But in a statement to The
Times, the company acknowledged that it had acquired the data, though it
blamed Mr. Kogan for violating Facebook’s rules and said it had deleted
the information as soon as it learned of the problem two years ago.
In
Britain, Cambridge Analytica is facing intertwined investigations by
Parliament and government regulators, who are scrutinizing possible data
privacy violations and allegations that it performed illegal work on
the “Brexit” campaign. In the United States, Mr. Mercer’s daughter,
Rebekah, a board member, Mr. Bannon and Mr. Nix received warnings from
their lawyer that it was illegal to employ foreigners in political
campaigns, according to company documents and former employees.
Congressional
investigators have questioned Mr. Nix about the company’s role in the
Trump campaign. And the Justice Department’s special counsel, Robert S.
Mueller III, has demanded
the emails of Cambridge Analytica employees who worked for the Trump
team as part of his investigation into Russian interference in the
election.
While
the substance of Mr. Mueller’s interest is a closely guarded secret,
documents viewed by The Times indicate that the firm’s British affiliate
claims to have worked in Russia and Ukraine. And the WikiLeaks founder,
Julian Assange, disclosed in October
that Mr. Nix had reached out to him during the campaign in hopes of
obtaining private emails belonging to Mr. Trump’s Democratic opponent,
Hillary Clinton.
The
documents also raise new questions about Facebook, which is already
grappling with intense criticism over the spread of Russian propaganda
and fake news. The data Cambridge collected from profiles, a portion of
which was viewed by The Times, included details on users’ identities,
friend networks and “likes.”
“Protecting
people’s information is at the heart of everything we do,” Mr. Grewal
said. “No systems were infiltrated, and no passwords or sensitive pieces
of information were stolen or hacked.”
Still, he added, “it’s a serious abuse of our rules.”
Reading Voters’ Minds
The
Bordeaux flowed freely as Mr. Nix and several colleagues sat down for
dinner at the Palace Hotel in Manhattan in late 2013, Mr. Wylie recalled
in an interview. They had much to celebrate.
Mr.
Nix, a brash salesman, led the small elections division at SCL Group, a
political and defense contractor. He had spent much of the year trying
to break into the lucrative new world of political data, recruiting Mr.
Wylie, then a 24-year-old political operative with ties to veterans of
President Obama’s campaigns. Mr. Wylie was interested in using inherent
psychological traits to affect voters’ behavior and had assembled a team
of psychologists and data scientists, some of them affiliated with
Cambridge University.
The
group experimented abroad, including in the Caribbean and Africa, where
privacy rules were lax or nonexistent and politicians employing SCL
were happy to provide government-held data, former employees said.
Then
a chance meeting bought Mr. Nix into contact with Mr. Bannon, the
Breitbart News firebrand who would later become a Trump campaign and
White House adviser, and with Mr. Mercer, one of the richest men on earth.
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Mr.
Nix and his colleagues courted Mr. Mercer, who believed a sophisticated
data company could make him a kingmaker in Republican politics, and his
daughter Rebekah, who shared his conservative views. Mr. Bannon was
intrigued by the possibility of using personality profiling to shift
America’s culture and rewire its politics, recalled Mr. Wylie and other
former employees, who spoke on the condition of anonymity because they
had signed nondisclosure agreements. Through a spokeswoman, Mr. Bannon
declined to comment.
Mr.
Mercer agreed to help finance a $1.5 million pilot project to poll
voters and test psychographic messaging in Virginia’s gubernatorial race
in November 2013, where the Republican attorney general, Ken
Cuccinelli, ran against Terry McAuliffe, the Democratic fund-raiser.
Though Mr. Cuccinelli lost, Mr. Mercer committed to moving forward.
The
Mercers wanted results quickly, and more business beckoned. In early
2014, the investor Toby Neugebauer and other wealthy conservatives were
preparing to put tens of millions of dollars behind a presidential
campaign for Senator Ted Cruz of Texas, work that Mr. Nix was eager to
win.
When
Mr. Wylie’s colleagues failed to produce a memo explaining their work
to Mr. Neugebauer, Mr. Nix castigated them over email.
“ITS 2 PAGES!! 4 hours work max (or an hour each). What have you all been doing??” he wrote.
Mr.
Wylie’s team had a bigger problem. Building psychographic profiles on a
national scale required data the company could not gather without huge
expense. Traditional analytics firms used voting records and consumer
purchase histories to try to predict political beliefs and voting
behavior.
But
those kinds of records were useless for figuring out whether a
particular voter was, say, a neurotic introvert, a religious extrovert, a
fair-minded liberal or a fan of the occult. Those were among the
psychological traits the firm claimed would provide a uniquely powerful
means of designing political messages.
Mr.
Wylie found a solution at Cambridge University’s Psychometrics Centre.
Researchers there had developed a technique to map personality traits
based on what people had liked on Facebook. The researchers paid users
small sums to take a personality quiz and download an app, which would
scrape some private information from the their profiles and those of
their friends, activity that Facebook permitted at the time. The
approach, the scientists said, could reveal more about a person than
their parents or romantic partners knew — a claim that has been
disputed.
When
the Psychometrics Centre declined to work with the firm, Mr. Wylie
found someone who would: Dr. Kogan, who was then a psychology professor
at the university and knew of the techniques. Dr. Kogan built his own
app and in June 2014 began harvesting data for Cambridge Analytica. The
business covered the costs — more than $800,000 — and allowed him to
keep a copy for his own research, according to company emails and
financial records.
All
he divulged to Facebook, and to users in fine print, was that he was
collecting information for academic purposes, the social network said.
It did not verify his claim. Dr. Kogan declined to provide details of
what happened, citing nondisclosure agreements with Facebook and
Cambridge Analytica, though he maintained that his program was “a very
standard vanilla Facebook app.”
He
ultimately provided over 50 million raw profiles to the firm, Mr. Wylie
said, a number confirmed by a company email and a former colleague. Of
those, roughly 30 million contained enough information, including places
of residence, that the company could match users to other records and
build psychographic profiles. Only about 270,000 users — those who
participated in the survey — had consented to having their data
harvested.
Mr. Wylie said the Facebook data was “the saving grace” that let his team deliver the models it had promised the Mercers.
“We
wanted as much as we could get,” he acknowledged. “Where it came from,
who said we could have it — we weren’t really asking.”
Mr.
Nix tells a different story. Appearing before a parliamentary committee
last month, he described Dr. Kogan’s contributions as “fruitless.”
An International Effort
Just
as Dr. Kogan’s efforts were getting underway, Mr. Mercer agreed to
invest $15 million in a joint venture with SCL’s elections division. The
partners devised a convoluted corporate structure, forming a new
American company, owned almost entirely by Mr. Mercer, with a license to
the psychographics platform developed by Mr. Wylie’s team, according to
company documents. Mr. Bannon, who became a board member and investor,
chose the name: Cambridge Analytica.
The
firm was effectively a shell. According to the documents and former
employees, any contracts won by Cambridge, originally incorporated in
Delaware, would be serviced by London-based SCL and overseen by Mr. Nix,
a British citizen who held dual appointments at Cambridge Analytica and
SCL. Most SCL employees and contractors were Canadian, like Mr. Wylie,
or European.
But
in July 2014, an American election lawyer advising the company,
Laurence Levy, warned that the arrangement could violate laws limiting
the involvement of foreign nationals in American elections.
In
a memo to Mr. Bannon, Ms. Mercer and Mr. Nix, the lawyer, then at the
firm Bracewell & Giuliani, warned that Mr. Nix would have to recuse
himself “from substantive management” of any clients involved in United
States elections. The data firm would also have to find American
citizens or green card holders, Mr. Levy wrote, “to manage the work and
decision making functions, relative to campaign messaging and
expenditures.”
In
summer and fall 2014, Cambridge Analytica dived into the American
midterm elections, mobilizing SCL contractors and employees around the
country. Few Americans were involved in the work, which included
polling, focus groups and message development for the John Bolton Super
PAC, conservative groups in Colorado and the campaign of Senator Thom
Tillis, the North Carolina Republican.
Cambridge
Analytica, in its statement to The Times, said that all “personnel in
strategic roles were U.S. nationals or green card holders.” Mr. Nix
“never had any strategic or operational role” in an American election
campaign, the company said.
Whether
the company’s American ventures violated election laws would depend on
foreign employees’ roles in each campaign, and on whether their work
counted as strategic advice under Federal Election Commission rules.
Cambridge
Analytica appears to have exhibited a similar pattern in the 2016
election cycle, when the company worked for the campaigns of Mr. Cruz
and then Mr. Trump. While Cambridge hired more Americans to work on the
races that year, most of its data scientists were citizens of the United
Kingdom or other European countries, according to two former employees.
Under
the guidance of Brad Parscale, Mr. Trump’s digital director in 2016 and
now the campaign manager for his 2020 re-election effort, Cambridge
performed a variety of services, former campaign officials said. That
included designing target audiences for digital ads and fund-raising
appeals, modeling voter turnout, buying $5 million in television ads and
determining where Mr. Trump should travel to best drum up support.
Cambridge
executives have offered conflicting accounts about the use of
psychographic data on the campaign. Mr. Nix has said that the firm’s
profiles helped shape Mr. Trump’s strategy — statements disputed by
other campaign officials — but also that Cambridge did not have enough
time to comprehensively model Trump voters.
In
a BBC interview last December, Mr. Nix said that the Trump efforts drew
on “legacy psychographics” built for the Cruz campaign.
After the Leak
By
early 2015, Mr. Wylie and more than half his original team of about a
dozen people had left the company. Most were liberal-leaning, and had
grown disenchanted with working on behalf of the hard-right candidates
the Mercer family favored.
Cambridge
Analytica, in its statement, said that Mr. Wylie had left to start a
rival firm, and that it later took legal action against him to enforce
intellectual property claims. It characterized Mr. Wylie and other
former “contractors” as engaging in “what is clearly a malicious attempt
to hurt the company.”
Near the end of that year, a report in The Guardian revealed
that Cambridge Analytica was using private Facebook data on the Cruz
campaign, sending Facebook scrambling. In a statement at the time,
Facebook promised that it was “carefully investigating this situation”
and would require any company misusing its data to destroy it.
Facebook
verified the leak and — without publicly acknowledging it — sought to
secure the information, efforts that continued as recently as August
2016. That month, lawyers for the social network reached out to
Cambridge Analytica contractors. “This data was obtained and used
without permission,” said a letter that was obtained by the Times. “It
cannot be used legitimately in the future and must be deleted
immediately.”
Mr.
Grewal, the Facebook deputy general counsel, said in a statement that
both Dr. Kogan and “SCL Group and Cambridge Analytica certified to us
that they destroyed the data in question.”
But
copies of the data still remain beyond Facebook’s control. The Times
viewed a set of raw data from the profiles Cambridge Analytica obtained.
While
Mr. Nix has told lawmakers that the company does not have Facebook
data, a former employee said that he had recently seen hundreds of
gigabytes on Cambridge servers, and that the files were not encrypted.
Today,
as Cambridge Analytica seeks to expand its business in the United
States and overseas, Mr. Nix has mentioned some questionable practices.
This January, in undercover footage filmed by Channel 4 News in Britain
and viewed by The Times, he boasted of employing front companies and
former spies on behalf of political clients around the world, and even
suggested ways to entrap politicians in compromising situations.
All
the scrutiny appears to have damaged Cambridge Analytica’s political
business. No American campaigns or “super PACs” have yet reported paying
the company for work in the 2018 midterms, and it is unclear whether
Cambridge will be asked to join Mr. Trump’s re-election campaign.
In
the meantime, Mr. Nix is seeking to take psychographics to the
commercial advertising market. He has repositioned himself as a guru for
the digital ad age — a “Math Man,” he puts it.
In the United States last year, a former employee said, Cambridge
pitched Mercedes-Benz, MetLife and the brewer AB InBev, but has not
signed them on.
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