Steve Bannon, Robert Mercer, and the Birth of Cambridge Analytica
This article describes populist firebrand and future Trump campaign manager Steve Bannon, his relationship with the arch-conservative hedge fund manager and billionaire Robert Mercer, and the establishment of the political consulting and data analytics firm Cambridge Analytica.
It is the second article in the series, “Cambridge Analytica, Steve Bannon, and the Bad Boys of Brexit on the Trump Campaign.” While it is not necessary to read previous entries, it is recommended.
Part one describes the mysterious father company of Cambridge Analytica, Strategic Communications Laboratories.
This article is an excerpt from my book, While We Slept: Vladimir Putin, Donald Trump, and the Corruption of American Democracy, available here.
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At some point in 2013, a fateful meeting on an airplane set in motion events that would lead to the birth of Cambridge Analytica.
On a flight from Los Angeles to New York, Republican strategists Mark Block and Linda Hansen, who had run former Godfather’s Pizza CEO and Republican presidential candidate Herman Caine’s 2012 White House bid, sat next to a military contractor who had done work with the British strategic communications company, SCL Group.
The contractor, a US Air Force Cyber War Expert, effusively praised SCL and inspired Block to reach out to SCL executive Alexander Nix.
Shortly thereafter, Block held a six hour meeting with Nix at the Willard InterContinential hotel in Washington, DC.
Nix explained how SCL had pioneered the practice of psychographics to more effectively utilize that data it collected.
Psychographics, Nix explained, was the process by which SCL applied personality scoring to the individuals within the company’s data set.
Through behavioral microtargeting, a term the firm trademarked, SCL tailored messaging to groups of individuals with similar personality traits, thus theoretically improving the efficacy of the messaging.
SCL utilized the OCEAN model to classify its data, which emerged from academic research into behavioral and social psychology, and that established the “Big Five” personality traits as being Open, Conscientious, Extroverted, Agreeable and Neurotic.
Block was thrilled by Nix’s presentation.
While Block was convinced, arguments have raged over the efficacy of SCL’s and later Cambridge Analytica’s use of psychographics, with many credible experts arguing that the methodology itself was oversold by Nix and others who had a financial incentive to exaggerate the firm’s data prowess.
“In the main,” the UK’s Information Commissioner’s Office wrote in a 2020 letter summarizing their findings on Cambridge Analytica, “their models were also built from ‘off the shelf’ analytical tools and there was evidence that their own staff were concerned about some of the public statements the leadership of the company were making about their impact and influence.”
It is beyond the scope of this article to engage in an in-depth examination of the efficacy of psychographic profiling.
While this line of inquiry is important, too narrow a focus on it runs the risk of overlooking a vitally important fact. As Mark Block’s positive reaction to Nix’s sales pitch indicates, influential and connected people believed that what Nix was selling could work.
As we shall see, vastly more powerful people than Mark Block would soon direct their immense resources in support of this belief.
Block introduced Nix to the billionaire Rebekah Mercer, who had emerged as one of the most prolific donors to conservative causes in the United States.
Over lunch in Manhattan, Nix delivered his well polished spiel to Mercer, who like Block lapped it up with relish. When he finished, Mercer suggested that she wanted Nix to meet her father. She left them with directions of where to meet later that day.
Block and Nix were confused when they arrived at the location at the designated time only to find themselves standing before a rundown sports bar next to the Hudson River.
Moments later, the Mercer’s 203-foot Yacht the Sea Owl came ashore and upon boarding Alexander Nix was introduced to Robert Mercer and his right wing political Svengali, Steve Bannon.
Robert Mercer, an arch-conservative eccentric and recluse, was the billionaire co-CEO of Renaissance Technologies, widely considered the most successful and secretive hedge fund on earth.
Mercer did not start out in finance, but rather computer science. In the 1970s, he conducted research as an employee at IBM into speech recognition software.
James Simons, a mathematician and Cold War code breaker who founded Renaissance Technologies, believed that Mercer’s research could be applied to his attempts to use quantitative models derived from mathematical and statistical analyses to inform systematic trading across financial markets.
Simons convinced Mercer to join him at Renaissance.
The crown jewel of their efforts was the Medallion Fund. Established in 1988 and open only to employees of RenTec, it had generated 66% percent average annual returns and total profits exceeding $100 billion, making it arguably the most successful fund in history.
While Mercer kept to himself, once saying that he preferred the company of cats to people, many of his colleagues at Renaissance came to realize that he held profoundly conservative views.
Mercer was a member of the national Rifle Association and maintained a collection of machine guns, including a gas operated AR-18 assault rifle featured in the film The Terminator.
Despite being a scientist, Mercer was a climate change skeptic, a fact which confused his scientifically literate colleagues.
At one time, Mercer funded the work of an Oregonian biochemist and climate skeptic named Arthur Robinson, who collected vials of human urine in the belief that they contained insights into human longevity and argued that low level exposure to radiation could benefit humans.
While Mercer’s views on these matters were mostly met with a shrug by his colleagues, it was his views on race and civil rights the disturbed some.
A RenTec employee claimed that in a conversation that took place after the election Mercer had told him that he believed the United States had gone in the wrong direction following the passage of the 1964 Civil Rights Act.
Mercer expressed the belief that African-Americans were doing “fine” in the 1950s and 60s, and that the Civil Rights Act had “infantilized” them. The employee further claimed that Mercer told him that the only racist people remaining in the United States were black and that the government shouldn’t involve itself in such matters.
After the election of Obama in 2008, Mercer and his daughter Rebekah became increasingly politically active. Their immense wealth became even more powerful in politics following the 2010 Citizens United Supreme Court decision, which allowed Super PAC’s to receive unlimited sums of money.
While the Mercer’s initially backed traditional Republican organizations, Robert’s tendency to distrust the establishment and towards iconoclasm found a fellow traveler in 2011 when he became acquainted with right wing provocateur, online news entrepreneur and television personality named Andrew Breitbart.
The founder of Breitbart News, Andrew Breitbart is perhaps best known for his belief that “politics is downstream from culture.” In other words, in order to change a society’s politics you have to begin with its culture.
“The people who have money, every four years at the last possible second, are told, ‘You need to give millions of dollars, because these four counties in Ohio are going to determine the election,’” Breitbart said in a speech before the National Policy Council in October 2009.
“I am saying, why didn’t we invest 20 years ago in a movie studio in Hollywood, why didn’t we invest in creating television shows, why didn’t we create institutions that would reflect and affirm that which is good about America?”
The Mercer’s grew enamored with Breitbart and his vision and purchased 50% of Breitbart News.
Nine months later, Andrew Breitbart unexpectedly dropped dead of a heart attack, but not before introducing the Mercer’s to his friend and fellow conservative iconoclast Steve Bannon.
It had been Bannon who drew up the business plan that led to the Mercer’s dropping $10 million into Breitbart News, which was instrumental in its transformation from a small collection of blogs into the conservative media powerhouse that exerted immense influence in the 2016 election.
A Navy veteran, graduate of Harvard Business School, former Goldman Sachs employee and conservative Hollywood filmmaker, Steve Bannon for a time housed Breitbart News in a building he owned in Santa Monica.
As a devout Catholic, he was influenced by the French intellectual and mystic René Guénon’s philosophy of Traditionalism, which rejected liberalism and secular modernity and took an apocalyptic view of history that characterized the West as being in a state of spiritual decline.
A key follower of Guénon was the Italian fascist intellectual and radical traditionalist Julius Evola.
Evola’s ideas later partially inspired the Eurasianist and fascist philosophy of infamous Putin sycophant Alexander Dugin.
In remarks given at the Vatican in 2014, Bannon synthesized many of Guénon’s and Evola’s ideas into his own fears of what he viewed as the existential threat posed by Islamic encroachment into the West by way of the European migrant crisis.
With the death of Andrew Breitbart, Bannon became the executive chair of Breitbart News and served as the Mercer’s chief political advisor. Thus it was unsurprising that he was present on the Sea Owl when Alexander Nix came aboard and was seated next to Robert Mercer. By the time Nix was finished, Mercer was intrigued enough that he decided to send Bannon to the UK to explore the opportunity further.
In October of 2013, Bannon traveled to the UK and met with Christopher Wylie at a hotel near Cambridge University. Wylie, as recounted in part one, was a young SCL employee who had pioneered its data program.
Wylie writes in his memoir that despite being off put by Bannon’s scruffy appearance, he was surprised by the breadth of Bannon’s interests and knowledge. Bannon asked Wylie about SCL’s research into cultural change.
“We talked for four hours,” Wylie writes, “not only about politics but about fashion and culture, Foucault, third-wave feminist Judith Butler, and the anture of the fractured self. On the surface, Bannon seemed utterly predictable — another old, straight white guy — but he spoke with a certain wokelness I hadn’t expected at all. In fact, I quickly decided he was kind of cool.”
Wylie explained SCL’s activities in Trinidad and Tobago to Bannon, highlighting their ability to see in real time what Trinidadians were looking at online and incorporate that information into their data set.
When Bannon asked if such a thing could be replicated in the United States, Wylie replied that he didn’t’ see why not. Intrigued, Bannon requested the SCL provide a proof of concept.
At the time, SCL had been hired to work on the Virginia gubernatorial campaign of Republican candidate Ken Cuccinelli.
SCL’s experience in Virginia provides a good example of just how difficult it is to determine the efficacy of its services. Cuccinelli lost the election, and two of the Super PAC’s that paid for SCL’s work on the campaign left the experience believing the company has misrepresented its capabilities and underperformed.
Wylie, however, who had traveled to Virginia after his meeting with Bannon, left the experience believing that their work had yielded promising results.
He states that the research they conducted in Virginia established that there was a relationship between personality traits and political outcomes, and further that they could both predict behaviors and shift attitudes by tailoring language to specific psychometric profiles.
The results were promising enough for Robert Mercer. He decided to invest between $15–20 million and Cambridge Analytica, a name thought up by Bannon, was born, 90% owned by Mercer and 10% by SCL Group.
Flush with cash and linked to one of the most powerful and prolific donors in the Republican party, Cambridge Analytica was poised to make a splash on the national stage in the US.
In order to do so, it needed access to a vastly larger trove of data. The company would eventually harvest the data it needed from the world’s largest social network: Facebook.
The story of how it did so leads us back to Cambridge University.
Illicit Facebook Data and Aleksandr Kogan in St. Petersburg
In 1989, Professor John Rust established the Psychometrics Centre at City University of London. The Centre concerned itself with studying the theory and technique of psychological measurement. Six years later, it moved to Cambridge University.
In 2012, an academic named John Stillwell arrived who had the insight of using social media as a means of gathering valuable psychometric data.
In 2007, Stillwell created a viral Facebook app called myPersonality that tested users OCEAN personality score and provided them with the option of sharing their results for research purposes, which 40% agreed to do.
Stillwell and two colleagues published a now famous paper, “Private traits and attributes are predictable from digital records of human behavior.”
The paper was full of intriguing findings, such as a person’s skin color and sexuality could be predicted based on their Facebook likes.
In early 2014, Christopher Wylie reached out to Stillwell to discuss partnering with SCL Group, but Stillwell ultimately decided against collaborating.
Wylie then turned to another academic at the Psychometric Centre, Aleksandr Kogan. Kogan, who had been been using macro-level datasets provided by Facebook since early 2013, offered to replicate Stillwell’s work and harvest his own set of data.
Over the course of his work with Facebook, two data scientists from the company worked directly with Kogan and Facebook provided him with data on 57 billion friendships.
In May of 2014, Kogan and his partner Joe Chancellor established Global Science Research (GSR) and signed a contract with SCL Elections.
While GSR’s contract was with SCL Elections, the data was being shared with Cambridge Analytica (which itself had a US and a UK branch).
GSR then took an app that Kogan had devised in his work with Facebook from 2013 and reworked it to become an interactive Facebook personality quiz called This Is Your Digital Life.
Using $800,000 provided by SCL, GSR paid Facebook users a small fee to take the test.
At the time, Facebook’s policy allowed third party apps that received permission from a user to also access the data of their Facebook friends. While only 270,000 Facebook users ever took the test, Kogan gained access to the raw data of 50 million users.
Of those, they were able to match 30 million with other records and data they had gathered, which allowed them to form psychographic profiles.
Facebook later claimed that upwards of 87 million of its users may have had their data harvested.
The Facebook data provided by Kogan expanded Cambridge Analytica’s insights into the American electorate by orders of magnitude.
While Facebook’s terms and conditions at the time prohibited the sale of data by third party apps for commercial purposes, and Kogan had represented that he was only using the data he collected for research purposes, he has claimed that he did not know he was violating any rules.
Unbeknownst to most of his colleagues at Cambridge, Kogan also worked as an associate professor at St. Petersburg University.
According to Christopher Wylie, Kogan’s work in St. Petersberg was funded by the Russian state through a public research grant.
Born in the former Soviet Union and brought up in Moscow until he was seven, Kogan was a Moldovan-American who spoke fluent Russian.
In a May 2014 lecture at St. Petersburg University, Kogan spoke in Russian and made bold claims about data collected over Facebook.
“The level of what can be predicted about you based on what you like on Facebook is higher than what your wife would say about you, what your parents or friends can say about you,” Kogan claimed, likely referring to Stillwell’s research. “Even if we take your 10 best friends and they all give a description of who you are as a person and we combine it all together — this analysis method is still better.”
He continued, with flourish, “Your Facebook knows more about you than any other person in your life.”
Employees of SCL/Cambridge Analytica were aware of Kogan’s work in Russia.
In an email dated March 14th, 2014, an SCL Group employee named Marcus Beltran wrote to Nix and Wylie about “the interesting work Alex Kogan has been doing for the Russians,” as it related to the “predictive crime-based CRM [customer relationship management]” and “criminal psychographic profiling” analytics being gathered for SCL’s work in Trinidad and Tobago.
Kogan worked with SCL on the project while negotiating the contract between SCL and GSR.
According to Wylie, Kogan’s research at St. Petersburg State University was focused on developing psychometric profiles of social media users, with a particular emphasis on exploring the potential that disordered people will end up engaging in trolling behavior online.
Kogan was reportedly studying the link between narcissism, Machiavellianism and psychopathy, known as the dark triad of personality traits, and online behavior such as cyber stalking, cyberbullying and trolling. Kogan found that people who score high in psychopathy were more likely to post about issues pertaining to authoritarianism.
According to one of Kogan’s research papers, he was working with the “data of Facebook users from Russia and the USA by means of a special web application.”
Wylie would later say that he did not believe Kogan was “ill intentioned,” but rather “careless and naive” and that his data security was objectively poor.
Inevitably, Kogan’s work and presence in St. Petersburg brings to mind the fact that the Internet Research Agency was operating in the same city at the same time.
Read my in-depth article about the Kremlin troll farm the Internet Research Agency and its operations targeting the 2016 US Presidential election here.
More coincidental still, May of 2014 was not only the month in which Kogan’s GSR signed a contract with SCL Elections and he delivered the above mentioned lecture in St. Petersburg, it was also the month in which the IRA’s social media influence operations under “Project Lakhta” actively began targeting the United States to spread distrust towards political candidates and the American political system in general.
None-the-less, there is no evidence that Kogan was involved in, or aware of, the activities of the Internet Research Agency.
In later investigations of Cambridge Analytica, the UK’s Information Commissioner’s Office explored the question of whether the data gathered by Kogan had been accessed by people in Russia.
When questioned about this in Parliament, Britain’s Information Commissioner Elizabeth Denham responded, “It is an active line of investigation… there were some IP addresses that were found in that data and that server associated with Aleksandr Kogan that resolved to Russia and associated states. That is information that we have passed on to the authorities. It is not in our remit to investigate any further than that, but we have passed that on to the relevant authorities.”
Upon further clarification, it was revealed that those Russian IP addresses were connected to the earlier app that Kogan had built for the Cambridge Psychometric Centre.
While the ICO didn’t explicitly say which app, Kogan had created an app called CPW Lab App for his earlier work with Facebook, which he later repurposed for the “This Is Your Digital Life” app he used to gather data for Cambridge Analytica.
Representatives from the ICO said that the Russian IP addresses were linked to past alleged cyber attacks and to a “Tor entry point,” a device used to hide one’s identity online.
The ICO referred the matter to Britain’s National Crime Agency, though as of this writing no further information on this matter has come to light.
The next article in the series will explore Cambridge Analytica’s various connections to Russia.