Is Cambridge Analytica a Big Story? Part III
Part III: Cambridge Analytica’s Exaggerations about their Work & Fact-checking the Media
Click here for Part I, here for Part II, and here for Part IV.
Cambridge Analytica exaggerated their work.
Despite story after story referring to Cambridge Analytica as “Trump’s data team, how close were they to the campaign and how successful were they?
After spending more than a year touting their work with the Cruz campaign, word quickly started getting around town in the summer of 2016 that Cambridge Analytics was overselling. In August 2016, staffers for the now-defunct Cruz campaign told AdAge that Cambridge Analytica had not lived up to the sales pitch:
“Everyone universally agrees that their sales operation is better than their fulfillment product,” said another consultant who has worked with the company. “The product comes late or it’s not quite what you envisioned.”
“What’s the old saying?” asked another source, conjuring up a metaphor to describe Cambridge Analytica. “All hat, no cattle?”
The Trump campaign had started talking Cambridge Analytica at the end of June and appears to have hired them at some point in July. By August, most media outlets were reporting on the new relationship. However, the partnership was short lived. CBS News reports that the Trump campaign dropped Cambridge Analytica in September 2016.
The crucial decision was made in late September or early October when Mr. Trump’s son-in-law Jared Kushner and Brad Parscale, Mr. Trump’s digital guru on the 2016 campaign, decided to utilize just the RNC data for the general election and used nothing from that point from Cambridge Analytica or any other data vendor. The Trump campaign had tested the RNC data, and it proved to be vastly more accurate than Cambridge Analytica’s, and when it was clear the RNC would be a willing partner, Mr. Trump’s campaign was able to rely solely on the RNC.
Cambridge Analytica data was used for some targeted digital advertising and a large TV buy, but the main source of “get out the vote” and matching digital outreach data came from the RNC.
This report matches descriptions of behind-the-scenes at the Trump campaign that were published prior to the election. This information was repeated at campaign wrap-up meetings held in D.C. in January 2017. I personally heard staffers testify that Cambridge Analytica’s work wasn’t an integral part of either the Trump or Cruz campaign. These opinions were also expressed in articles in The Spectator and Buzzfeed:
But interviews with 13 former employees, campaign staffers, and executives at other Republican consulting firms who have seen Cambridge Analytica’s work suggest that its psychological approach was not actually used by the Trump campaign and, furthermore, the company has never provided evidence that it even works. Rather than a sinister breakthrough in political technology, the Cambridge Analytica story appears to be part of the traditional contest among consultants on a winning political campaign to get their share of credit — and win future clients.
The media’s use of describing Cambridge Analytica as “Trump’s data team” frustrated so many people that the New York Times devoted an entire story to it:
But a dozen Republican consultants and former Trump campaign aides, along with current and former Cambridge employees, say the company’s ability to exploit personality profiles — “our secret sauce,” Mr. Nix once called it — is exaggerated.
The New York Times also notes how Cambridge Analytica has clarified some of its previous boasts about their work in the 2016 election:
In some recent public settings, Cambridge executives have acknowledged that. “I don’t want to break your heart; we actually didn’t do any psychographics with the Trump campaign,” Matt Oczkowski, Cambridge’s head of product, said at a postelection panel hosted by Google in December.
This is true. I didn’t attend the Google event, but Oczkowski made similar statements at another event I attended in January 2017.
The firm’s claims about its client base have also shifted. As recently as October, the firm said it had 50 clients in the 2016 elections. But a company spokesman said federal elections records showing just a dozen were correct.
This is also true. Based on required filings from the Federal Election Commission, Cambridge Analytica worked with 13 campaigns and PACs during the 2016 cycle for a total of $15.3 million.
Cambridge Analytica stopped working in US politics.
In December, the company announced they were officially pulling out of US politics to focus on international elections and corporate work:
For his part, Nix says the decision to pull back from U.S. politics was in anticipation of the lull in activity in the field in an off-election year. “There’s going to be literally dozens and dozens of political firms [in the 2018 midterm elections], and we thought, that’s a lot of mouths to feed and very little food on the table,” says Nix. In 2017, there have been no filings on the Federal Election Commission’s website that showed Cambridge Analytica working as a vendor. Forbes reached out to 16 campaigns and super PACs that have worked with the data company since 2014 or received donations from the Mercer family in 2017. None said they are currently working with Cambridge.
The most recent data available from the FEC is from December 2017 Year-End reports (the next deadline is March 31), but there are no records of Cambridge Analytica doing any political work in 2017.
Cambridge Analytica may have violated FEC rules.
Based on a report from The Guardian, they hired non-US citizens for political activities, which is illegal according to Federal Election Commission Act. The Bernie campaign was recently fined for paying Australians to work for them
This will be investigated. If they did hire non-US citizens, they will likely be fined based on the recent violation from the Bernie campaign.
Cambridge Analytica is not owned by the Mercer family.
If there’s one mistake bigger than characterizing this as a “breach” or a “leak,” it’s the claim that the Mercers own Cambridge Analytica. They don’t. They are investors.
While the ownership and organization of the company is obfuscated, Tablet investigated the legal structure of the company. We know that Cambridge Analytica is a subsidary of SCL Group, Ltd., which is a private company in the UK with a 15-person board. Based on British legal documents, SCL owns a handful of subsidiaries such as SCL Analytics Ltd., SCL Strategics Ltd., and SCL Elections.
Tablet notes that SCL Elections is owned entirely by Alexander Nix. In January 2015, SCL USA was incorporated under SCL Elections and changed its name to Cambridge Analytica UK Ltd. on April 14, 2016.
The 2015 Bloomberg profile notes that Nix tried to expand to the US in 2010, but there was no interest. After 2012, and the success of the Obama campaign’s data mining operation, Nix tried again and found the Mercer family.
Mercer emerged as a major financial force in conservative politics just as it became an ideal sphere in which to indulge his pursuit for interesting technical programs. In 2013, SCL Elections spun off its American operations into a district entity, Cambridge Analytica, while also also removing the phrase “soccer mums” that appears in SCL Elections materials. “We want to look, feel like an American company,” says Nix.
Just as significantly, it then became a Republican company. The Mercers have repackaged Cambridge Analytica as an ingenious cog in the GOP party machinery that can crank out votes using methods unavailable to Democrats. Earlier this fall, the firm moved its Washington office to Alexandria’s Old Town, the seat of the Republican consulting sector. “It’s pretty clear that in America you’ve got to pick a side in this business,” says Nix. “It’s not really our decision. The market makes our decision.”
The Daily Beast reports that it isn’t Robert Mercer who is involved with the operations, but his daughter, Rebekah:
The source said Robert Mercer, former co-CEO of America’s most lucrative hedge fund, is just a passive investor in Cambridge Analytica and has never been on its board. Rebekah Mercer is his daughter, and conducts broad business oversight as a board member.
One columnist for The Guardian writes that the Mercers invested a reported $10 million into Cambridge Analytica. However, an exact dollar figure has never been revealed since it is a private company.
Cambridge Analytica has potential links to Russia.
The business tactics of Cambridge Analytica deserve to be questioned (along with those of Facebook). However, is there a connection with Russia? In the current media environment, if Trump is mentioned, there seems to be an automatic allegation of nefarious Russian activity. Over the course of the Mueller investigation, Cambridge Analytica has been the subject of several theories by the media. Some are absurd. Some deserve investigation, and a few raise eyebrows.
New York Times: SCL worked in Russia…25 years ago.
SCL Group, Ltd., the parent company of Cambridge Analytica, is shrouded in mystery. One of the allegations of Russian collusion is the charge that they included Russia on a map of countries where they previously worked. The New York Times writes:
On two promotional documents obtained by The New York Times, SCL said it did business in Russia. In both documents, the country is highlighted on world maps that specify the location of SCL clients, with one of the maps noting that the clients were for the firm’s elections division. In a statement, SCL said an employee had done “commercial work” about 25 years ago “for a private company in Russia.”
Very little is known about SCL’s founding or their work. In 2015, Bloomberg wrote the most comprehensive profile on the early days of SCL that I’ve found.
In its early years, Oakes’s company worked with the Conservative Party, according to an executive, but after the 1997 elections his firm pulled back from British politics.SCL tacticians had found that they were unable to maintain the same aloof sensibility that their London-based workforce brought to overseas politics. “It’s difficult to ask people in their own country to work on a campaign they don’t support,” says Nix, who joined fellow Etonian Oakes’s firm in 2003 as a director guiding its expansion. Over the next decade, SCL continued its international work, steering as many as ten campaigns for prime minister or president annually in countries as far-flung as South Africa, Argentina, Thailand, and Italy.
The timing fits. Bloomberg notes that Strategic Communications Laboratories was founded by Nigel Oakes in 1993. However, we should remember that that Russia was a very different 25 years ago. This would have been during the Boris Yeltsin administration in the immediate aftermath of the collapse of the Soviet Union. While there is much to question SCL over, there is barely enough information here to make an allegation.
Mother Jones: Polo Photos Point to Putin
MoJo does a good job of making themselves look silly:
The footage, though, was a bit grainy. So here is a clearer shot of Nix, snapped during a polo match in which he played on July 28, 2016. He happens to be posing with Alexander Yakovenko, the Russian ambassador to the United Kingdom. The photo was taken days after Democratic National Committee files and emails hacked by Russian intelligence were dumped online by WikiLeaks at the start of the Democratic Party’s convention. The previous month, the Trump campaign had hired Nix’s company, and by this point, it had been widely reported that Russian intelligence was behind the DNC hack.
Even before getting caught for attempted bribery, Alexander Nix raised suspicions. However, questioning a photo with a diplomat who is stationed in the UK while they are both at a social event in the UK is veering down the path of McCarthyism. This photo was taken by the event photographer and offered for sale on the photographer’s website. Most of us have been at events similar to this. Do you plot espionage with enemies of your government at charity events and then pose for photos?
Mother Jones also offers this non sequitur:
Journalists, researchers, and congressional investigators have wondered about any ties between Cambridge Analytica and Russia. This photo is hardly evidence of an untoward connection. But last year a Huffington Post article on Robert and Rebekah Mercer, the super-wealthy, right-wing backers of Cambridge Analytica, did note that Rebekah, at one meeting with Nix, was highly impressed by Nix’s polo skills, gushing about his prowess and asking him to show cellphone photos of himself on horseback.
Rebekah Mercer — like many women in America — is enamored by a British accent and polo players! That definitely proves collusion!
Aleksantdr Kogan, the man at the heart of the situation, lectured at St. Peterburg State University three times and took Russian grants for research.
Kogan is…interesting. Born in Soviet-era Moldovia, he grew up in Moscow until the age of seven when his family moved to the U.S. He later became a U.S. citizen. In 2014, he was an assistant professor of psychology at Cambridge University when Michal Kosinski and David Stillwell published a paper from the Psychometrics Centre discussing the success of MyPersonality Facebook app. After Koskinki turned down a partnership offer, and Cambridge University denied him MyPersonality data, he co-founded Global Research Services with Joseph Chancellor, who is now employed by Facebook. They then replicated the survey, paid people on Mechanical Turk to take it and sold the data to SCL.
He also briefly changed his name to Dr. Spectre and gave an interview to The Guardian. He denies the two projects ever overlapped.
Nothing I did on the Russian project was at all related to Cambridge Analytica in any way. No data or models.” His recollection was that the Russia project had started a year after his collaboration with Cambridge Analytica ended.
Tablet: SCL’s Founders Had Links to Ukraine
In an article that should get more attention, Tablet details Vincent Tchenguiz, the main investor behind SCL, and his ties to Dmitry Firtash, a Ukrainian oligarch with ties to Putin and a failed business venture with Paul Manafort.
A high-profile real estate mogul in London, Tchenguiz is estimated to be worth about $1.1 billion and owns about 1% of all housing in the UK. Between 2005 and 2015, he was the main stockholder of Strategic Communications Lab, Ltd. He acquired 24% of SCLs shares through Consensus Business Group and later Wheddon Ltd., which are both part of his holding company, Investec Trust.
Wheddon Ltd., was also used to invest in Zander Group, another privately-owned UK business, whose largest shareholder is Dmitry Firtash, a Ukrainian oglicarch. Firtash was indicted by the US on bribery charges in 2014 and is currently fighting extradition efforts in Austria. Tablet details:
From 2006 until 2011, the largest single shareholding in Zander Group, 28 percent of the total shares, was owned by a Cyprus company called Spadi Trading. And Spadi was owned by Group DF, as in Dmitry Firtash, in the British Virgin Islands. This holding company is one of 153 companies worldwide the U.S. is trying to seize pursuant to its indictment of Firtash. (Spadi’s ultimate owner is Robert Shetler-Jones, also a Group DF board member.).
In 2011, Tchenguiz and his brother, Robert, were arrested for their alleged roles in the 2008 collapse of the Icelandic bank Kaupthing. However, the charges against him were dropped by the U.K.’s Serious Fraud Office. He recently settled a $2.2 billion lawsuit with Kaupthing.
Tablet reports that shortly before it’s collapse, the Tchenguiz brother’s loans total approximately 40% of the bank’s capital. Kaupthing’s largest shareholder, Exista, had ties to Alfa Bank, the largest commercial bank in Russia.
Vox: The Flynn Connection
Vox theorizes that Peter W. Smith, the “GOP operative” who contacted hacker groups to obtain Hillary’s emails passed on information to Michael Flynn. Smith was a wealthy business man who spent his fortune digging up opposition research on Democrats. Days after granting an interview to the Wall Street Journal about his work, he committed suicide. According to the Chicago Tribune:
Smith told the Journal he believed the missing emails might have been obtained by Russian hackers. He also said he thought the correspondence related to Clinton’s official duties. He told the Journal he worked independently and was not part of the Trump campaign. He also told the Journal he and his team found five groups of hackers — two of them Russian groups — that claimed to have Clinton’s missing emails.
Smith claims to have been in contact with Lt. General Michael Flynn, who has since plead guilty to lying to FBI agents. What is not clear is if Flynn responded to Smith, and if Smith suspicisons were taken seriousy.
How does this fit in with Cambridge Analytica? Apparently, Flynn briefly served as unpaid adviser to Cambridge Analytica in 2016.
To summarize Vox: Smith independently paid people to find Hillary’s emails. Two of the hacker groups contacted were Russian. Smith also told others he knew Flynn and was in communication with him. It is unclear if Smith obtained emails, or if he really knew Flynn. (When you join a presidential campaign or staff, it’s amazing how many people you suddenly know). It is proven that Flynn had suspicious interests in Russia. Since Flynn briefly worked with Cambridge Analytica, Flynn must have been the passed on information. Right?
This should be investigated, but with Mueller having access to Flynn’s records and the UK investigating Cambridge Analytica, information should emerge if this happened.
Cambridge Analytica Briefed Lukoil in 2014
Christopher Wylie, the former Cambridge Analytica employee who spoke to The Guardian and New York Times, described how the company had several meetings with Lukoil, a Russian petroleum company with close ties to the Kremlin. During the meetings, Cambridge Analytica briefed them on their political operations in America. The Times reports:
Lukoil was interested in how data was used to target American voters, according to two former company insiders who said there were at least three meetings with Lukoil executives in London and Turkey. SCL and Lukoil denied that the talks were political in nature, and SCL also said there were no meetings in London.
It’s not clear why Cambridge Analytica was pitching them:
Asked about the Russian oil company, a spokesman for SCL said that in 2014 the firm’s commercial division “discussed helping Lukoil Turkey better engage with its loyalty-card customers at gas stations.” The spokesman said SCL was not ultimately hired.
Arash Repac, chief executive of Lukoil Eurasia Petrol, offered a different explanation for the talks. He said that a meeting he attended with SCL in Turkey involved a promotional campaign with local soccer teams.
It is also suspicious that Kogan was funded by Russian research grants at the same time he was gathering data for SCL in 2014. The Guardian obtained a 2014 email suggesting that Kogan help with the Lukoil pitch:
One Cambridge Analytica employee mentioned Kogan’s Russian work in an email to Nix in March 2014 discussing a pitch to a Caribbean nation for a security contract, including “criminal psychographic profiling via intercepts”.
“We may want to either loop in or find out a bit more about the interesting work Alex Kogan has been doing for the Russians and see how/if it applies,” the colleague wrote.
The Guardian also viewed the slide deck used in the Lukoil meetings that highlighted SCL’s previous “electoral” activity:
A slide presentation prepared for the Lukoil pitch focuses first on election disruption strategies used by Cambridge Analytica’s parent company, SCL, in Nigeria. They are presented under the heading “Election: Inoculation”, a military term used in “psychological operations” and disinformation campaigns. Other SCL documents show that the material shared with Lukoil included posters and videos apparently aimed at alarming or demoralising voters, including warnings of violence and fraud.
“Inoculation” in this presentation likely refers to Inoculation Theory, a sociological theory from the 1960s that is one of the most cited communications theories in academic research as well as strategic communications plans. It is one of the foundational theories used to teach mass communications and is discussed in nearly every communications course held at U.S. colleges. Does the New York Times employ journalists that took communications classes in college?
Bottom line: this is alarming. Firms sometimes have competing interests, but they are usually contractually-obligated to establish firewalls. Under no circumstance is it ever acceptable for a firm or agency to showcase the work of one client without their permission to another client or a prospective client. At the very minimum, this is highly unprofessional. For most agencies, this would be grounds for terminating the contract immediately.
(I have one theory that would explain why Lukoil would be interested in Cambridge Analytica’s services, and it has nothing to do with the 2016 election.)
CNN: Alexander Nix reached out to Julian Assange.
Unlike some of the other allegations, this is verified. Nix, for unknown reasons, contacted Julian Assange, the head of WikiLeaks, and offered to help him release the Hillary emails.
Assange, who is believed to have ties with Russia, turned him down.
Nix then decided to email at least three people about his offer. One of those individuals was Rebecca Mercer.
This situation landed Nix into trouble long before the bribery issue, and he was called in to testify before the House Intelligence Committee last December. Mueller also requested that the firm turn over all emails relating to the Trump campaign.
In Part IV, learn about the Obama campaign & data mining, what Facebook knew, and the problems with psychographics.