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Cambridge Analytica Suspends C.E.O. Amid Facebook Data Scandal Cambridge Analytica Suspends C.E.O. Amid Facebook Data Scandal
(about 2 hours later)
Cambridge Analytica, the political data firm with ties to President Trump’s 2016 campaign, suspended its chief executive, Alexander Nix, on Tuesday, amid a furor over the access it gained to private information on more than 50 million Facebook users. Cambridge Analytica, the political data firm with ties to President Trump’s 2016 campaign, suspended its chief executive, Alexander Nix, on Tuesday, amid the furor over the access it gained to private information on more than 50 million Facebook users.
The decision came after a television broadcast in which Mr. Nix was recorded suggesting unseemly practices to influence foreign elections. The decision came after a television broadcast in which Mr. Nix was recorded suggesting that the company had used seduction and bribery to entrap politicians and influence foreign elections.
The London-based company, founded by Stephen K. Bannon and Robert Mercer, a wealthy Republican donor who has put at least $15 million into it, offered tools that could identify the personalities of American voters and influence their behavior. The suspension marked a new low point for the fortunes of Cambridge Analytica and for Mr. Nix, who spent much of the past year making bold claims about the role his outfit played in the election of Mr. Trump. The company, founded by Stephen K. Bannon and Robert Mercer, a wealthy Republican donor who has put at least $15 million into it, offered tools that it claimed could identify the personalities of American voters and influence their behavior.
So-called psychographic modeling techniques, which were built in part with the data harvested from Facebook, underpinned the company’s work for the Trump campaign in 2016. Mr. Nix once called the practice “our secret sauce,” though some have questioned its effectiveness. So-called psychographic modeling techniques, which were built in part with the data harvested from Facebook, underpinned Cambridge Analytica’s work for the Trump campaign in 2016. Mr. Nix once called the practice “our secret sauce,” though some have questioned its effectiveness.
In a joint investigation published online on Saturday, The New York Times and The Observer of London detailed the company’s acquisition and use of the Facebook data. On Monday, a British television news report also cast the company in a harsh light, showing video of Cambridge Analytica executives offering to entrap politicians. But in recent days, the firm has found itself under increased scrutiny from lawmakers, regulators and prosecutors in the United States and Britain following reports in The New York Times and The Observer of London that the firm had harvested the Facebook data, and that it still had a copy of the information.
In the video, Mr. Nix, sitting in a hotel bar, suggested ideas for a prospective client looking for help in a foreign election. The firm could send an attractive woman to seduce a rival candidate and secretly videotape the encounter, Mr. Nix said, or send someone posing as a wealthy land developer to pass a bribe. The reports quickly put Mr. Nix in the cross hairs of a Parliamentary committee investigating fake news and Russian interference in Britain’s referendum to exit the European Union. Earlier this month, he told the committee that Cambridge Analytica had never obtained or used Facebook data — a statement that the firm itself has contradicted in recent days.
But it was Monday’s broadcast by Channel 4 News in Britain that appeared to push the board of Cambridge Analytica to move against Mr. Nix. Channel 4 spent months investigating the company, and sent a reporter to pose as a prospective client from Sri Lanka, secretly filming the encounters with Mr. Nix.
The most damning footage was captured in January when Mr. Nix, sitting in a hotel bar in London, suggested the firm could send an attractive woman to seduce a rival candidate and secretly videotape the encounter, or send someone posing as a wealthy land developer to pass a bribe.
“We have a long history of working behind the scenes,” Mr. Nix said.“We have a long history of working behind the scenes,” Mr. Nix said.
The prospective client, though, was actually a reporter from Channel 4 News in Britain, and the encounter was secretly filmed as part of a monthslong investigation into Cambridge Analytica. Inside Cambridge Analytica, Mr. Nix, the scion of a wealthy family who attended Eton College, the exclusive secondary school, had a reputation for lashing out at staffers, and for aggressively pursuing deals.
The results of Channel 4’s work were broadcast in Britain on Monday, days after reports in The New York Times and The Observer of London that the firm had harvested the data from more than 50 million Facebook profiles in its bid to develop techniques for predicting voter behavior. Christopher Wylie, a data expert who worked at the firm in 2013 and 2014 and helped develop its voter-profiling technology, said in a recent interview that he kept memberships at a number of exclusive strip clubs near Pall Mall in London at the insistence of Mr. Nix, who often entertained clients from African and Caribbean countries there.
On Tuesday, Damian Collins, the chairman of the Digital, Culture, Media and Sport Select Committee of the House of Commons, called on Mark Zuckerberg, Facebook’s chief executive, to give evidence in the British Parliament. “Why would I have these memberships?” said Mr. Wylie, who is gay. “I didn’t want them.”
In a letter, Mr. Collins said that previous answers from Facebook officials about the misuse of data had been “misleading” to the committee. Channel 4 followed up Tuesday with a second part of its investigation that focused mainly on Mr. Nix’s claims that Cambridge Analytica played a pivotal role in the election of Mr. Trump — a claim that many inside the Trump campaign have disputed.
“It is now time to hear from a senior Facebook executive with the sufficient authority to give an accurate account of this catastrophic failure of process,” the letter said, adding, “I hope that this representative will be you.” The Channel 4 report also included allegations first reported by The Times this past weekend that Cambridge Analytica’s use of foreigners to work on election campaigns in the United States could have violated American election laws. (The Times did not work with Channel 4.)
In the United States on Tuesday, the Federal Trade Commission announced an investigation into whether Facebook violated an agreement on data privacy in the episode. At least two American state prosecutors have also said they are looking into the misuse of data by Cambridge Analytica. Announcing its chief executive’s suspension, Cambridge Analytica said in a statement that “in the view of the board, Mr. Nix’s recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation.”
Announcing the chief executive’s suspension, the company said in a statement that “in the view of the board, Mr. Nix’s recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation.” The company said it had asked Alexander Tayler, its chief data officer, to serve as its acting chief executive. Mr. Tayler trained as a chemical engineer and joined Cambridge Analytica in 2014 as its lead data scientist, according to his LinkedIn profile.
The company said it had asked Alexander Tayler, its chief data officer, “to serve as acting C.E.O. while an independent investigation is launched to review those comments and allegations.” At the same time, the company said it was launching an “independent investigation” of Mr. Nix’s comments and the allegations facing the firm.
The company also said it had hired a lawyer, Julian Malins, “to lead this investigation, the findings of which the board will share publicly in due course.” The company said it had hired a lawyer, Julian Malins, “to lead this investigation, the findings of which the board will share publicly in due course.”
It added: “The board will be monitoring the situation closely, working closely with Dr. Tayler, to ensure that Cambridge Analytica, in all of its operations, represents the firm’s values and delivers the highest-quality service to its clients.”It added: “The board will be monitoring the situation closely, working closely with Dr. Tayler, to ensure that Cambridge Analytica, in all of its operations, represents the firm’s values and delivers the highest-quality service to its clients.”
Mr. Tayler trained as a chemical engineer and joined Cambridge Analytica in 2014 as its lead data scientist, according to his LinkedIn profile. Mr. Malins is a seasoned corporate lawyer who has worked on complex litigation, with an expertise in asset recovery and money laundering cases. It was not immediately clear what impact Mr. Nix’s resignation would have on the SCL Group, the parent company of Cambridge Analytica. The companies were set up with a convoluted corporate structure, and their operations are deeply intertwined.
Some observers thought the suspension of Mr. Nix was at most a first step. Mr. Nix, for instance, holds dual appointments at the two companies. Cambridge Analytica is registered in Delaware and almost wholly owned by the Mercer family, but it is effectively a shell — it holds intellectual property rights to its psychographic modeling tools, yet its clients are served by the staff at London-based SCL and overseen by Mr. Nix, who is a British citizen.
“If they think ‘suspending’ a chief executive even approaches proportionality for this kind of mass data breach, they underestimate people & institutions who will fight for #privacy rights & for Facebook to account for their actions,” Claude Moraes, a Labour Party official who represents London in the European Parliament, wrote on Twitter. Neither the Mercer family nor Mr. Bannon have publicly commented since the reports in the Times and The Observer.
Facebook, too, has sought to avoid the spotlight but also found itself under a similarly unwelcome glare. In the United States, the Federal Trade Commission said on Tuesday that it had opened an investigation into whether Facebook violated an agreement with the agency on data privacy.
In addition, Eric T. Schneiderman, the attorney general of New York, said the state was joining Massachusetts in an investigation into whether the company failed to protect the privacy of users in those states. Their attorneys general have demanded that Facebook hand over information about its interactions with Cambridge Analytica.
“Consumers have a right to know how their information is used — and companies like Facebook have a fundamental responsibility to protect their users’ personal information,” Mr. Schneiderman said.
In Britain, Damian Collins, the chairman of the Digital, Culture, Media and Sport Select Committee of the House of Commons, which is running the inquiry into fake news, called on Mark Zuckerberg, Facebook’s chief executive, to give evidence to Parliament.
In a letter, Mr. Collins said that previous answers from Facebook officials about the misuse of data had been “misleading.”
“It is now time to hear from a senior Facebook executive with the sufficient authority to give an accurate account of this catastrophic failure of process,” the letter said, adding, “I hope that this representative will be you.”