Staff Columnist

Wealthy Cambridge Analytica backers casting off debtors

Data-miner at heart of privacy scandal petitions for Chapter 7

Chairman of the Senate Judiciary Committee Chuck Grassley (R-IA) strikes the gavel beside ranking member Dianne Feinstein (D-CA) before Christopher Wylie, former Cambridge Analytica research director, testified before a Senate Judiciary Committee hearing titled,
Chairman of the Senate Judiciary Committee Chuck Grassley (R-IA) strikes the gavel beside ranking member Dianne Feinstein (D-CA) before Christopher Wylie, former Cambridge Analytica research director, testified before a Senate Judiciary Committee hearing titled, "Cambridge Analytica and the Future of Data Privacy" on Capitol Hill in Washington, U.S., May 16, 2018. (Al Drago/Reuters)
/

Scandal-ridden Cambridge Analytica is representative of everything people distrust about corporate America.

Mostly unsurprising news arrived this week that Cambridge Analytica has filed for bankruptcy in the Southern District of New York.

The political consultant company, alongside it’s British parent, SCL Elections Ltd., came under fire earlier this year for improperly using the data of more than 85 million Facebook users, dating back to 2014. Insolvency proceedings began in the United Kingdom on May 2. Despite government investigations and public outrage, the company has denied any wrongdoing.

“Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the company’s best efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both political and commercial arenas,” representatives wrote as part of a statement announcing their intention to seek bankruptcy.

The company is fully blaming “the siege of media coverage” for it’s black eye and inability to attract new business or retain existing accounts. The announcement doesn’t mention the earlier scuttling of CEO Alexander Nix following his recorded comments about using bribes and prostitutes to entrap politicians. Following Nix’s ouster, the company promoted its chief data officer, Alexander Taylor, to serve as acting CEO. Taylor, as well as executive Mark Turnbull took part in meetings, recorded by an undercover journalist, in which Nix made these claims.

“ … we’re used to operating through different vehicles, in the shadows, and I look forward to building a very long-term and secretive relationship with you,” Nix is quoted as saying during one of those meetings.

These and other comments were sordid and shocking, even by today’s topsy-turvy political standards.

ARTICLE CONTINUES BELOW ADVERTISEMENT

Just this week, during testimony before the U.S. Senate Judiciary Committee, former Cambridge Analytica employee Christopher Wylie said the company used Facebook to “identify mental and emotional characteristics in certain subsets of the American population and worked to exploit them by designing them to activate some of the worst vulnerabilities in people, such as neuroticism, paranoia and racial biases.”

Although Republicans on that committee — especially U.S. Sen. Ted Cruz, R-Texas, who was the first of the 2016 presidential hopefuls to employ the firm, a move that was later credited with his Iowa caucus win — tried to lessen the actions taken by Cambridge Analytica as something that most modern-day political campaigns do — specifically calling out former President Barack Obama’s 2008 and 2012 campaigns for using Facebook data — Wylie pushed back.

“A lot of people are concerned about, for example, the ability of big government to inhibit our liberties and choice. Big data can engineer a situation that limits our choice and our freedom. And it’s not a partisan issue,” he said.

Still, Nix repeatedly claimed credit for the Cruz triumph in Iowa and, later, for the 2016 general election win of Donald Trump, although doing so violated long-standing industry norms.

“We did all the research, all the data, all the analytics, all the targeting, we ran all the digital campaign, the television campaign, and our data informed all the strategy,” Nix told the undercover reporter.

Which brings us back to current news about the impending bankruptcy. The Chapter 7 petition was signed on behalf of Cambridge Analytica’s board by Rebekah and Jennifer Mercer, daughters of computer scientist turned hedge fund billionaire Robert Mercer and part of a family that has traditionally financed GOP efforts.

Rebekah Mercer was part of the Trump transition team that helped select his cabinet and is a shareholder in Breitbart News, which dismissed former Trump political strategist Steve Bannon five days after Rebekah publicly distanced herself from him. It was a significant break, given that Bannon and “Bob” Mercer are believed to have oversaw data-mining Cambridge Analytica during its foray into both UK’s Brexit vote and the 2016 U.S. election.

According to a CNBC profile, Mercer earned an average of $113 million a year from 2011 to 2013. It was during that same time that his household staff sued for alleged underpayment, a case that was settled out of court.

ARTICLE CONTINUES BELOW ADVERTISEMENT

The Washington Post reported Americans may never know exactly how much money was pumped into the 2016 election by the Mercer family; spending by Bob alone topped $49 million and the Mercer Family Foundation roughly added another $19 million.

But when the time came to close shop at Cambridge Analytica, members of the Mercer family filed for Chapter 7 bankruptcy, which wipes out qualifying debt without a repayment plan. The company has listed assets in the range of $100,001 to $500,000 and liabilities totaling between $1 and $10 million. It was created in 2013 with $15 million in backing from Mercer, according to the New York Times.

So, a company founded by individuals with incredibly deep pockets and a political agenda was caught doing questionable things, which ultimately delivered a desired outcome. Now firmly in the crosshairs of public scrutiny, they’re ready to turn off the lights and lock the doors, leaving their debts on the conference room table.

There’s no denying the legality of this maneuver, but the ethics of it is a completely different story.

• Comments: @LyndaIowa, (319) 368-8513, lynda.waddington@thegazette.com

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Want to join the conversation?

Consider subscribing to TheGazette.com and participate in discussing the important issues to our community with other Gazette subscribers.

Already a Gazette or TheGazette.com subscriber? Just login here with your account email and password.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.