Cambridge Analytica

Background

Cambridge Analytica (CA) was created in 2013 with an early focus on U.S. elections and bankrolled with $15 million in investments from the billionaire Republican donor Robert Mercer whose daughter, Rebekah Mercer, also served on the company’s board.¹ ²After coming under fire for reportedly misusing data from Facebook users, CA announced it would shut down in 2018 and begin bankruptcy proceedings.³

CA is an offshoot of SCL Group, formerly Strategic Communication Laboratories, a government and military contractor providing behavioral research and strategic communications. It has described its specialties as “psychological warfare,” “public diplomacy,” and “influence operations.”⁴ ⁵

SCL Group has been in what Politico described as military disinformation campaigns to social media branding and voter targeting.” On an archived version of its website, SCL Group advertised its involvement in over 25 international political and electoral campaigns since 1994.⁶ It has boasted of its ability to influence public opinion world-wide using what has been called “psy ops” to learn about its target audience.⁷

According to Bloomberg, SCL was launched by Nigel Oakes in 1993.⁸ An archive of the SCL website describes the company as taking a hands-on approach to a “powerful persuasion methodology for communication” that Oakes first developed in the nonprofit Behavioural Dynamics Institute, a group he had established in 1989. SCL Ltd started as a “a project management and implementation company,” and performed the first trials of its methodology in 1990 by claiming credit for breaking up a strike at a UK car transport plant. The group branched out intwo SCL Defense, which catered to the world’s militaries, SCL Elections in 1994, and SCL Social and SCL Behavioral in 2009 to serve commercial and social sectors.⁹

DeSmog UK mapped how the company ties to climate science denial through its Brexit and Trump connections. Nafeez Ahmed at Motherboard has also outlined Cambridge Analytica’s ties to the fossil fuel industry.¹⁰

Emerdata

While CA is apparently shutting down, a lesser known data company named Emerdata was formed in 2017 and includes many of the key people behind Cambridge Analytica such as now-suspended Alexander Nix, as well as Rebekah Mercer and her sister Jennifer Mercer. Public filings at UK Companies House show Emerdata was incorporated in August 2017, and the Mercer sisters joined the board in March 16, 2018.¹¹

Business Insider noted that while it isn’t clear precisely what Emerdata does, it lists its purpose as “data processing, hosting, and related activities.” In February 2018, it moved to a Canary Wharf address shared with SCL Group, the parent company to Cambridge Analytica.

Key people include:

Julian Wheatland — Chief Operating Officer and initial shareholder (at date of incorporation)
Alexander Tayler — Initial shareholder.
Jennifer Mercer — Director (Appointed March 19, 2018)
Rebekah Mercer — Director (Appointed March 16, 2018)
Alexander Bruce Taylor — Director (Appointed March 28, 2018)
Alexander Nix — Former director (Appointed January 23, 2018. Terminated April 13, 2018)
Ahmad Al Khatib — Director (Appointed January 23, 2018)
Cheng Peng — Director (Appointed January 23, 2018)
Johnson Chun Shun Ko — Director (Appointed January 23, 2018)

Johnson Chun Shun Ko is deputy chairman of Frontier Services Group, a private security firm that primarily operates in Africa chaired by Erik Prince, a prominent supporter of Trump. Prince is known for founding Blackwater US and is the brother of US education secretary Betsy DeVos.¹²

The Daily Beast reported Prince donated at least $100,000 to Make America Number 1 PAC to support Trump’s bid for presidency. Prince has also supported the right-wings news outlet Breitbart, formerly headed by Steve Bannon. Notably, Bannon has also sat on the board of Cambridge Analytica and has helped fun it.¹³

Medium reported questioned the nature of the relationship, through Emerdata Limited, between Julian Wheatland and Alexander Nix, and Erik Prince’s business partner Ko Chun Shun:¹⁴

“Many questions are raised by this partnership. What is the business purpose of Emerdata Limited? And what is the business relationship between Emerdata Directors Julian Wheatland and Alexander Nix who also head up Cambridge Analytica, and Erik Prince’s business partner, Mr. Ko Chun Shun? And, most interestingly, is there any direct connection between Cambridge Analytica and Erik Prince?”

See related filings below.

Data Harvesting Controversy

In 2018, a whistleblower reported the company had used personal information from as many as 50 million Facebook users, taken without authorization, starting as early as 2014 in order to influence the U.S. election. It reportedly used the information to build a system to profile individual US voters in order to target them with personalized political advertisements. The Observer and The New York Times were among the first to report on the issue.¹⁵ ¹⁶

Whistleblower Christopher Wylie told the Observer: “We exploited Facebook to harvest millions of people’s profiles. And built models to exploit what we knew about them and target their inner demons. That was the basis the entire company was built on.”¹⁷

The Guardian later reported that potentially more than 87 million users may have been affected by the breach. The data was harvested through an app called thisisyourdigitallife, made by Aleksandr Kogan in collaboration with Cambridge Analytica.¹⁸

Cambridge Analytica claimed that it did not know Kogan had violated Facebook’s policies, and that it had deleted the data in 2015. The Times and The Observer reported that the data had not been deleted. Facebook said it would investigate the accuracy of the claims.¹⁹

The Federal Trade Commission launched an investigation into Facebook following the revelations, The Washington Post reported.²⁰

Trump Campaign Ties

Cambridge Analytica was paid millions of dollars by Donald Trump’s campaign, with much of that money coming from Robert Mercer who reportedly owns a large stake in the company. Stephen K. Bannon, former Senior Advisor to Trump, also served as an officer at the company for some time. The Intercept reported that Bannon received checks from the company for several months after he claimed to have severed ties with them.²¹

CA lists the Donald J. Trump for President campaign as a case study on its website:²²

“Cambridge Analytica’s work on the Trump campaign is a clear example of how data-driven marketing techniques can change behavior in target populations. Applied to the commercial sector, these techniques can strategically engage your key audiences, improving conversion rates and boosting sales.”

Channel 4 Undercover Investigation

An undercover investigation by Channel 4 News filmed what it described as a discussion of coordination between Trump’s campaign and outside groups. Following the release of the report, Cambridge Analytica announced it had suspended its chief executive Alexander Nix, pending full investigation.²³

In the third part of the released video, executives claimed “ran all the digital campaign, the television campaign and our data informed all the strategy” for President Trump.²⁴

Mark Turnbull, managing director for SCL Elections, separately described how the company could create negative material for opposing candidates:²⁵

“Sometimes you can use proxy organisations who are already there. You feed them. They are civil society organisations.. Charities or activist groups, and we use them – feed them the material and they do the work…

“We just put information into the bloodstream to the internet and then watch it grow, give it a little push every now and again over time to watch it take shape. And so this stuff infiltrates the online community and expands but with no branding – so it’s unattributable, untrackable,” he said.²⁶

Alexander Tayler, the company’s Chief Data Officer, described how they tactics could sidestep campaign financing laws:

“As part of it, sometimes you have to separate it from the political campaign itself. So in America you know there are independent expenditure groups running behind the campaign… Super pacs. Political action committees.

“So, campaigns are normally subject to limits about how much money they can raise. Whereas outside groups can raise an unlimited amount. So the campaign will use their finite resources for things like persuasion and mobilisation and then they leave the ‘air war’ they call it, like the negative attack ads to other affiliated groups.”²⁷

In a separate meeting, Turnbull reportedly described how their company was behind the “Defeat Crooked Hilary” attack ads that were funded by the Make America Number 1 super-PAC.²⁸

A Cambridge Analytica spokesman said: “CA has never claimed it won the election for President Trump. This is patently absurd. We are proud of the work we did on that campaign, and have spoken in many public forums about what we consider to be our contribution to the campaign.”²⁹

In another part of Channel 4’s Investigation, Cambridge CEO Alexander Nix said his firm would try to dig up dirt on opposing candidates by taping them accepting bribes:³⁰

“We’ll offer a large amount of money to the candidate, to finance his campaign in exchange for land for instance, we’ll have the whole thing recorded, we’ll blank out the face of our guy and we post it on the Internet,” Nix said.³¹

In another exchange, he said they could “send some girls around to the candidate’s house,” adding that Ukrainian girls “are very beautiful, I find that works very well.”³²

Fossil Fuel Ties

DeSmog has mapped Cambridge Analytica’s links with the fossil fuel industry, highlighting connections to large oil companies including BP, Shell, and Exxon which were all named as clients in a presentation through a smaller company called Phi Energy.³³

MotherBoard reported how several directors at Cambridge Analytica’s parent company, SCL Group, have close ties to the fossil fuel industry.³⁴

For one, SCL Elections director Christian Patrick Teroerde was director at SCL Elections from 2013 to 2014, a position that coincided with his role at Hanson Asset Management where he had been co-founding managing director since 2010. The Hanson Family, whose wealth was managed by the company, made much of their wealth from the coal industry including Peabody Holding Company, which Hanson acquired before the firm was sold and became Peabody Energy.³⁵

Motherboard noted that, during its founding year, company correspondence for Cambridge Analytica was sent to the same address as Teroerde’s directorship at SCL Elections.³⁶

Stance on Climate Change

Cambridge Analytica is tied both to Brexit and climate science denial, DeSmog UK reported and mapped:

Funding

One of the key ties on the U.S. side is Robert Mercer and his daughter, Rebekah Mercer. Aside from investing approximately $15 million in Cambridge Analytica, Rebekah also sits on the company’s board.³⁷

Steve Bannon, former chief strategist for Donald Trump, has also given money to CA. Former employees say that Bannon played a central role in the early stages of the company. “This was Steve Bannon’s baby,” said former contractor Christopher Wylie. He described Cambridge Analytica as “Bannon’s arsenal of weaponry to wage a culture war on America using military strategies.”³⁸

Wylie said that both Bannon and Rebekah Mercer participated in conference calls in 2014 when the plans to collect Facebook data were discuss. Wylie acknowledged that it was unclear if they knew the details of how the collection took place, however he said Bannon “approved the data-collection scheme we were proposing.”³⁹

Key People

The following is based on publicly available listings at Companies House UK:

Name & Division

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Description

Alex Oakes

Secretary

SCL Group Limited

Alexander Nix

Director/CEO

Cambridge Analyitica (UK) Limited

SCL Analytics Limited

SCL Commercial Limited

SCL Digital Limited (Dissolved June 2016)

SCL Elections Limited

SCL Group Limited

SCL Social Limited

SCL Sovereign Limited (Dissolved June 2016)

Christian Teroerde

Secretary

SCL Elections Limited

SCL Social Limited

David Christie

Director

SCL Group Limited

Geoffrey Edwin

Director

SCL Group Limited

John Bottomley

Secretary

SCL Group Limited

Julian Wheatland

Director

SCL Analytics Limited

Nigel Oakes

Director

SCL Group Limited

Roger Gabb

Director

SCL Analytics Limited

SCL Group Limited

Actions

May 2, 2018

SCL Elections and a number of Cambridge Analytica LLC’s UK affiliates announced applications to commence insolvency proceedings in the U.K. CNN reported that the news followed the company’s allegations of misusuing the Facebook data of millions of users.⁴⁰

In its statement, the company continued to assert “unwavering confidence that its employees have acted ethically and lawfully,” but said that a “siege of media coverage” had driven away its customers and suppliers.⁴¹

April 10–11, 2018

Facebook CEO Mark Zuckerberg testified in front of Congress over two days, discussing the leak of users’ data to Cambridge Analytica. View the full text of Day 2 of the testimony at Politico.⁴²

“In 2015, we learned from journalists at The Guardian that Kogan had shared data from his app with Cambridge Analytica. It is against our policies for developers to share data without people’s consent, so we immediately banned Kogan’s app from our platform, and demanded that Kogan and other entities he gave the data to, including Cambridge Analytica, formally certify that they had deleted all improperly acquired data — which they ultimately did.

Last month, we learned from The Guardian, The New York Times and Channel 4 that Cambridge Analytica may not have deleted the data as they had certified. We immediately banned them from using any of our services. Cambridge Analytica claims they have already deleted the data and has agreed to a forensic audit by a firm we hired to investigate this. We’re also working with the U.K. Information Commissioner’s Office, which has jurisdiction over Cambridge Analytica, as it completes its investigation into what happened,” Zuckerberg said in his testimony.

In his first day of testimony, Zuckerberg said it was “clearly a mistake” to believe Cambridge Analytica when they said they had deleted the data.⁴³

“When we heard back from Cambridge Analytica that they had told us they weren’t using the data and had deleted [the app], we considered it a closed case,” Zuckerberg told the Florida senator. “In retrospect, that was clearly a mistake,” he said.

March 2018

The New York Times reported that Rebekah Mercer had visited Facebook’s headquarters in an attempt to mend relations between Facebook and Cambridge Analytica, following revelations that CA had improperly obtained data from tens of millions of users.⁴⁴

Following these events, Facebook had banned the company from its platform. The NYT reported that the Facebook scandal combined with other doubts about the firm’s effectiveness had “effectively crippled” its election work in the US.⁴⁵

“They’re selling magic in a bottle,” said Matt Braynard, who worked alongside Cambridge on the Trump campaign. “And they’re becoming toxic.”⁴⁶

While the Mercers made no public statements on the ban, the NYT suggested it could be affecting their political network:⁴⁷

“The effort by Ms. Mercer’s friend to help mend fences with Facebook hints at both Cambridge’s importance to her family’s political ambitions and the perils posed by Facebook’s ban,” NYT reported.⁴⁸

In March, a CA spokesman said that Rebekah Mercer had a “broad business oversight” role at the company, but was not involved in daily operations. Former Cambridge Analytica employees said she was close to the company’s chief executive, Alexander Nix, who was suspended in response to the Facebook controversy.⁴⁹

Matthew Michelson served as Ms. Mercer’s intermediary with Facebook.⁵⁰

UK corporate records show that Rebekah and her sister Jennifer serve as directors of Emerdata, a British data company formed by a number of executives from Cambridge Analytica and its affiliated SCL group.⁵¹ ⁵²

March 20, 2018

A former Cambridge Analytica employee reported that Stephen K. Bannon had overseen the company’s early efforts to collect Facebook data, The Washington Post reported. Under Bannon, the company tested messages that later became central to Trump’s campaign such as “drain the swamp” and “deep state,” former employee Chris Wylie said.⁵³

He told The Washington Post that Bannon had been deeply involved in the strategy and had approved spending nearly $1 million to acquire the data in 2014.⁵⁴

“We had to get Bannon to approve everything at this point. Bannon was Alexander Nix’s boss,” said Wylie, who was Cambridge Analytica’s research director. “Alexander Nix didn’t have the authority to spend that much money without approval.”⁵⁵

Bannon served on the CA board at the time. He received more than $125,000 in consulting fees from CA in 2016, and also owned “membership units” in the company worth between $1 million and $5 million.⁵⁶

2015

In 2015, The Guardian first reported on the tactics of the then-little-known Cambridge Analytica, which had gathered data from millions of US Facebook users to create “psychographic profiles” that could be used by Ted Cruz’s presidential campaign to gain an edge.⁵⁷

FEC filings showed that Cruze’s campaign paid Cambridge Analytica at least $750,000 that year, as well as over $2.5 million over the prior two years from Super PACs that also received funding from the Mercer family.

Bloomberg and Politico reported earlier on how Cruz’s campaign had started working with Cambridge Analytica.⁵⁸ ⁵⁹

“I’ve seen their product, and it’s better than anything I’ve ever seen,” Cruz spokesman Rick Tyler told Politico. “We know what a Cruz supporter looks like demographically … and this allows us to go into Iowa and match those traits with likely caucus-goers.”⁶⁰