The Founding of Cambridge Analytica

and politics. We've got midterm elections coming up pretty soon here in the United States as I record this, so these are are kind of related back to that without being too political in one stance or another. Also a reminder, I'm recovering from getting sick. I'm recording this right after I just recorded the Echo Chamber episode, and so my voice is going to continually decrease in quality over this episode and the following one, which will be Part two.

So we have had tons of conversations in the United States about all things political. It's probably getting a little exhausting for those of you who are in the US. And in our last episode, I talked a little bit about propaganda and how delivering the right type of information or misinformation depending on the message to the right audience

at the right time. Can really influence outcomes, and this and the next episode we're going to look at a specific story involving a company that specialized in that type of thing, or at least claimed to specialize in that type of thing. The company was the UK based Cambridge Analytica. So if you're in the United States or the UK,

you've probably heard that name. If you're outside of those countries, you might have heard it because it was the center of pretty massive controversies that may have involved the personal data of up to eight seven million Facebook users, only a small number of whom agreed to share any information with this group in the first place. And you'll understand why all this means over the course of the next

couple of episodes. Now, the story is a complicated one, and it involves a lot of people and other organizations, and one of the big ones we're going to talk about is Facebook and how Facebook's policies were what made Cambridge Analytica's actions possible, or at least one part of Cambridge Analytica's actions, the part that really took a lot of focus in the spring of and then there's the responsibility that we social media users bear as well. We

also play a part in this. So what the heck was Cambridge Analytica because spoiler alert, the company, at least officially no longer exists. Well simply, but Cambridge Analytica was in the business of gathering information, personal information, psychological information about people and then crafting messaging specifically aimed at those people to make the biggest impact possible, specifically or political campaigns,

in other words, to help elect certain candidates. Candidates that had reserved the services of Cambridge Analytica, which was acting as a political consultant. They were guns for hire. You could go out and secure the firm services and try

to get elected. Um, they would gather information about the people you were hoping to reach, and they were meant to determine the most effective approach on how to do that, how to reach those people based on the information they had learned about your target audience, and they would serve up and almost personalized form of messaging based on that data, at least in theory. So it wasn't a guarantee that your message was going to be received well, but it

was about as close as you can get. And in fact, sometimes you might say that Alexander Nicks, who who ran Cambridge Analytica was in fact guaranteeing those results that messaging could include misinformation, it could include propaganda, didn't have to, but it could, and it could be used to create a larger wedge between different people within a region. It was a powerful and therefore potentially dangerous claim to make. Now.

According to the company itself, it would pair consumer information with psychological profile information on each person in your target audience, and it would gather that information from different sources like surveys, research, and social media platforms, namely Facebook. It would also conduct other ways to try and gather data. It would sort people into different buckets, different categories, and the four big ones would be are you confrontational or non confrontational? Are

you agreeable? Are you a follower? Are you a leader? That sort of stuff, and it could formulate strategies to target each bucket based on those qualities. So if these claim as were all supported by evidence and had really strong results, it would be both really impressive and really disturbing.

This idea that we can learn a lot about the people you are trying to get to support you, and we can send out the message that is most likely to get you that support disturbing because the information this company gathered about people went well beyond just general information like a name and an age and zip code or something. It would include stuff like occupations, maybe the types of shows they like to watch, the type of car they drove, their voting record, the sort of stuff they shopped for,

what kind of medications they took. These were the claims Cambridge Analytica made that they had these data points. And here's the kicker, A whole lot of the information was stuff the target audience was already sharing. They were posting this information to social media, though the company was claiming to have access to these data points long before it actually got that access. So, in other words, Gambrage Analytica seemed to be making some pretty grandiose claims about their capabilities.

Alexander Nicks, the head of it, was making most of those claims and very public forums before they had any real means of delivering upon it. But it did sort of catapult them into the spotlight for a while. Now, keep in mind, we are often talking in this episode and the next one about stuff that people were willingly

sharing regularly on social media. It's the same sort of stuff that they might get upset about if they heard that some research firm had a spreadsheet and their name was in that spreadsheet and the data that they had just shared on Facebook or Twitter ended up being in that spreadsheet. It kind of changes the context because when you pop on Facebook, let's say you're celebrating the fact that you just bought a brand new car. To you,

you are sharing some fun news with your friends. You're like, Hey, I got my new card. It's pretty cool, blah blah blah. And to you, that's just like I'm excited, be excited with me. But to these research firms, what you've done is just revealed a little bit more information about yourself that might potentially be valuable in the future, and they're taking note of it. However, it would be too easy

to put all the blame on social media users. We probably could share less in a lot of cases than we are sharing, but we don't hold all the blame. Cambridge Analytica also employed tools that went beyond looking at public profiles. So this story involves not just user behavior, not just Cambridge Analyticas behavior, but also Facebook and its policies.

Facebook had in place of policy that developers could take advantage of that gave those developers access to enormous amounts of data, not just the information belonging to the people who downloaded the apps, but others who never gave any consent for their information to be shared. That's also at the heart of this issue, so we're going to cover

that as well. By the way, I'm making no effort to be unbiased in this episode as far as the behavior of Cambridge Analytica, because I think it's pretty clear that they did business in a dangerous and unethical way. Maybe an illegal way, but definitely in an ethical way. And it's not just my opinion. There are a lot of others who share this opinion. There's an article in mother Jones that's titled Cloak and Data, the real story behind Cambridge Analytica's Rise and Fall, which is quite good, uh.

And in that article, an employee of Cambridge Analytica said that the staff would never employ their techniques on British political campaigns because it was too close to home, it was too questionable, but it seemed like it was okay to do it when it involved a different countries political system, that that would be fair game. That seems pretty ugly

to me. The idea that oh, no, we would never do this here, that would be probably not cool at all, but it's okay to do it in other country's political system. That's fine. It's because that's over there, that's not over here. That's troubling to a great degree. Also spoiler alert, there are a lot of allegations that suggest that Cambridge Analytica at least had some involvement with British politics, specifically the referendum to vote on on leaving the European Union, also

known as Brexit. But those are allegations that Cambridge Analytica has denied vehemently and there are ongoing investigations into that matter. So that story still hasn't played out. I'll touch on it probably again in the course of these episodes. So Cambrage Analytica was a company that, at the bottom line, would scrape data about people and then form messaging strategies around that data. So let's get into the details. So before there was at Cambridge Analytica, there was a guy

named Nigel Oaks. Oaks went to Eaton, which is a boarding school in England, one of the more posh ones, certainly expensive. A lot of statesman from England have attended there. Uh, it is a boy's only boarding school, and he is an old Etonian. That's what they call the folks who

who graduated from Eaton. Oaks started out in advertising. Actually he started out as a DJ, but he went on into advertising, became an executive at Sachi and Sacchi, and according to Oaks, in nine he founded an academic working group called Behavioral Dynamics Institute. And I say according to because it's really hard to track down official information about

these things. The purpose of this working group was to advance research and development quote into persuasion and social influence end quote according to the official history of research group, So sort of an offshoot of advertising. How can you shape public opinion about a given subject? That was the key. How can we use our understanding of human psychology to have better success with any kind of communications campaign which could be for marketing purposes, It didn't have to be political.

And the main focus was, according to Oaks, communication for conflict reduction, So an idea of how can a government or how can an organization communicate in a way that's effective to reduce conflict around the situation. Oakes brought on a couple of psychologists to work with him on this.

One of them was Barry Gunter, who is now a professor emeritus at Leicester University, and the other was Adrian Furnham, and apparently the three would meet semi regularly between ninet to talk about psychology, potential applications of it in the commercial world, and about research projects. But the two psychologists

eventually broke ties with Oaks. They, at least Barry Gunter, said they felt that Oaks was sort of taking their work and making grandiose promises about leveraging psychology to get results, such as in advertising, and Gunter was contacted by The New Yorker and said, quote we felt he was promising more than the science of psychology at that time could

substantiate end quote. So in other words, psychologists were saying, there may be something to this, but you're making promises before we even have a full understanding, and it may even be that those promises have nothing behind them. In Behavioral Dynamics Institute had enough funding to make a go of it and became a company again according to the

company's own accounts. I could not find any actual records that talked about this, but either in or in two thousand five, Behavioral Dynamics Institute created a spinoff company called Strategic Communications Laboratories or sc L, and I say either ninete or two thousand five because according to the b d I history the date is when s c L started, but the UK company's house did not register s c

L as a company until two thousand five. The company official or otherwise certainly did business between nine and two thousand five. In two thousand there was an article published about the company working communications strategies for the Indonesian President Wahid, who, by the way, would later be impeached and removed from office. So I guess that messaging didn't go so well. I'll tell you more about s c L and the journey towards Cambridge Analytic in a moment, but first let's take

a quick break to thank our sponsor. S c L seemed to make a lot of big promises about what it could do a psychological data After September eleven, two thousand one, the company positioned itself as an expert resource for psychological warfare and began to go after military contracts in the UK and in the US as consultants. In the early two thousands, s c L hired a salesman named Alexander Nicks, and Knicks, like Oaks, had attended Eton,

so he was another old Etonian. In two thousand ten, Alexander Nicks traveled to America to scope out the possibility of finding clients for scl UH, specifically political clients. But Nick saw that the climate in the US was different than in other places. In the US, political consultants would tend to ally themselves to a particular side. You would either be Republican or Democratic consultants, but you rarely saw anyone who is sort of just a consultant for hire

for either side. And s c L had clients that had leaned left and some that leaned right. So it would be really che challenging to get traction in America as a foreign company that had worked for both sides of political philosophies in the past um and so s c L did not pursue a serious effort to get into US politics at that time. By two thousand and twelve,

s c L was in financial difficulty. It was not regularly pulling in consulting contracts, and there was a fundamental disagreement between Nicks, who wanted to focus more on election campaigns as a source for revenue, and Oakes, who wanted to do more work by selling operations, centers and locations across the Middle East as sort of defense contracts. So Nix and Oakes more or less part of the ways. Oakes would still head up a branch of SCL that focused on defense, and Nicks would take up a group

that was called SCL Elections. So essentially they said, fine, you take our research and you apply it that way. I'm going to take our research and apply it this way. That research, by the way, from all the reports I could find, usually consisted of just just a few small, very modest studies, nothing of any real major note. Uh, so very odd that the companies were making these big, big promises because they didn't have a whole lot of research to back it up, and certainly not a lot

of published research. Two thousand twelve also marked a new shot at the United States. So in in the US, the Obama campaigns had successfully leveraged Facebook and social media to reach out to young voters and to target audiences and send out messaging. Uh. Not totally different from what SCL and Cambridge Analytica would try to do, although in a way that was much more transparent. So while the Obama campaigns kind of led the way there, um, they they did not go the further the step further the

Cambridge Analytica went. However, it convinced Nix that it meant that the Republican side was falling behind when it comes to technology, and there was a shift happening in the way politicians would reach out to their electorate, and because the Republican Party was falling behind, it showed an opportunity.

After the two thousand twelve election, the GOP, the Grand Old Party Republican Party, issued a post mortem report that emphasized a need to look into new tools for competing in elections, including new places they had not or would not have looked before, and that gave Nix an opening. He rebranded SCL as being more than an image and communications strategy consulting firm. Now, he said, s c L is a expert in data analytics and using those results

to form actionable strategies. So, according to former employees, Nix and Oakes both had a habit of promising deliverables without having a really strong plan in place on how to make good on those promises. So, in other words, they

found out what the potential client wanted. They would promise to del liver that, and then they would come up for a price for that promise, and after that they would go back to their team and say, okay, I promised that we would give them X. We have to figure out how to give them X. That was kind of what the rebranding was all about. The company was positioning itself as having a deep expertise in a fairly young field. But maybe you could argue it was not

quite as far along as the pitch would suggest. SCL elections were a very expensive firm to have on your campaign, and Nick's strategy was to aim for wealthy underdogs in elections around the world, people who add access to a lot of money but not many political resources. And then the next piece in the Cambridge Analytica puzzle fell into place. That piece was a data analyst and political campaign strategist named Christopher Wiley. Wiley is an anomaly someone that I

really I just don't quite get. Interestingly, he had worked in political campaigns before, specifically it worked for Obama's political campaigns, and he had also acted as a consultant for the Liberal Party in Canada. Ni's met Wiley and thought that Wiley sounded like a genius and offered him a job to help build out s c LS capabilities to actually

do what the company was claiming it could do. And Wiley accepted the offer, and part of the reason why, while he said he accepted it, in fact the main reason was that Nick's essentially told him you're gonna have free reign to work on your theories about data and politics and messaging. You're gonna have a a sandbox to play in where you can you can experiment all you like, and that made Widy very happy. He thought that data and politics were a place that had not yet really

come to fruition. So around the same time, s c ls goal was to build out a tool it called Rippen, or maybe more accurately, its goal was to sell a tool called Rippen and then take the money from those sales and then develop the tool called Ribbon. So in other words, they were kind of selling a product they did not really have. This loops us back to all those data points the company claimed it had access to early on when I was talking about it in the

opening of this episode. The Rippon tool was supposed to be software that would allow a company a campaign to manage things like a voter database, campaign efforts all in a holistic, coordinated, and micro targeted way to really have a focused strategy and actionable strategy so that at any given step you knew what was happening and what was

supposed to happen next. And it sounded too good to be true, And it turned out that that was the case because Rippon which was named after Rippon, Wisconsin, that's the birthplace of the Republican Party from the nineteenth century when the the the party was founded in Rippon, Wisconsin as mostly as an effort to unify people who were um anti slavery UH and numerous other UH foundational ideas.

It all started there. But this the software named after the birthplace for the Republican Party, didn't really exist as a finished product. While Nix was out there trying to sell it, it was consistently in development and the company was making it a practice to get the train running

without having laid down any tracks at the beginning. So while the Rippon mess was happening, while campaigns were saying, Hey, where's this tool you've been promising us, Wiley began to look around for ways to actually make it a reality and something that would give the company an actual base to stand on, And he heard about the work of a psychologist named David Stillwell who had built a Facebook

app called My Personality Now. This app would quiz users about five factors known as the Ocean model, and Ocean stands for openness, conscientiousness, extra version, agreeableness, and europe neuroticism. So it would measure you on the scale of each of those things, and then we'll tell you how your personality kind of measures up, what sort of personality you have.

Psychologists had found that it was tricky to get people to agree to take those sorts of personality tests if people knew the results would be applied to stuff like politics or marketing, because they didn't want to share deeply personal reactions within those contexts. They didn't want to think, oh, I don't want to give this person information about my darkest desires or fears or whatever. But on Facebook, in the form of a quiz that promises to tell you

more about yourself, that would work like Gangbusters. And I think it's pretty natural that we're all interested in stuff that addresses us, specifically that talks about us. We tend to be our own favorite topic of discussion. There's a bit of egomaniac in all of us to some extent. Now some people like me, we've got egomania and droves. But when you encounter an app on Facebook that says take this quiz to learn more about yourself, you may

feel inclined to take that quiz. Here's the trick. You're not the only one learning stuff about yourself. The researchers are learning things too, and they're collecting an enormous amount of information about Facebook users. And so if you are looking at the survey, and if the survey says, hey, you can take the survey, uh, the app is going to get access to your profile to see what kind of stuff you post. It's not gonna post for you, but they can see what you've posted publicly or whatever.

And you say, sure, that's fine. Whatever it's posted publicly, you can know that. Well, that would give more data to the developer who had created the survey. So they're getting information from the survey that get know what kind of personality you have, but they also know the type of stuff you like based upon your interactions on Facebook because they have access to that information as well, and

they can start to try and draw correlations between data points. So, for example, they these researchers published a paper in two thousand uh talking about their findings, and they said that, you know, we found that people who displayed high intelligence also really tended to like thunderstorms, or people who are big fans of Hello Kitty. Scored really high on openness,

but they scored low on agreeableness and emotional stability. The researchers knew that information because the app wouldn't again, just gather information from the quiz. The app gave researchers a chance to look at the profiles of the users themselves, you know, so whatever those users had clicked like on and Facebook, that stuff got lumped in with all the other data. And that's how they were able to draw some conclusions about relationships. And that seemed really interesting to Wiley.

I'll tell you a little bit more about that in just a second, but first let's take another quick break to thank our sponsor. In two thousand and fourteen, Wiley would reach out to Stillwell and one of the other researchers, a named guy named Michael Kazinki, to find out about using the My Personality app or something akin to it

in conjunction with political campaign research. At that time, Stillwell was working in the University of Cambridge's psycho Metrics Center in the UK, and Stillwell would ultimately turn down this opportunity, but a colleague of his, a Russian American psychologist named Alexander Cogan, said, I can do that. I can make something for you. I can create an app that is

replicates the research that my colleagues have done. And so Cogan was tapped to create a tool that would work in a similar way to my personality, and he got to work on his own survey tool, which he called this is Your Digital Life Now. He positioned this survey to appear to be purely for academic research, and Facebook approved this survey. So the survey it self existed on top of Amazon's mechanical Turk platform, but it had this

inner operability with Facebook. It was a thing that you would log into through Facebook, and it would therefore allow the survey operator to pull data from Facebook in addition to the information generated by the survey. And it wasn't just the information about the person taking the quiz, because Cogan had included a friends permission request, meaning that if you agreed to take the survey under these terms. And by the way, this was a paid survey. People were

paid money to part to debate. If you agreed to take the survey and you logged in through your Facebook account, doing so would grant permission for the developer, in this case Cogan, to not just see your Facebook information, but the information of your friends. So it included stuff like your name, your age, your location, your email address, your likes, your comments, your posts, and then all the information of

your friends as well. That was the part that would ultimately get Cambridge Analytica and Facebook into a heap of trouble in the United States. So Cogan builds out the survey, uses Amazon's mechanical Turk program, and it ends with that message that asks for that Facebook permission. Something between two seventy thousand and three twenty thousand people took the survey, So you're like, all right, well, that's like a quarter of a million people, a little more than a quarter

of million people. That's a lot of people. But that was not the limit of data, right, because you had that friends permission. So you get the personality results, the survey results just from the people who took the survey, but you would get all the Facebook data from not just those people, but all of their friends as well.

That is where you would start to hear this this figure being thrown around that the survey gathered information from fifty million users on Facebook, and then when Mark Zuckerberg appeared before Congress in the spring of eighteen, he said, actually the high end might be as much as eighties seven million, not fifty million, and maybe even worse than that. And eight seven million people might have had their data scraped in this operation with only two seventy thousand people

giving consent. That brought brought the light up policy Facebook had in place for years that a lot of people had found troubling and had opposed before that point, and that would be that a person could provide con sent on behalf of everyone on their friends list to give access to their data in addition to the user's own data to an app developer. The more friends the person has,

the more data the developer would collect. Now, one complicating factor that happened around this time is that Alexander Cogan also accepted an offer from St. Petersburg University in Russia, which granted Cogan research money to be an Associate Professor Coganell has denied that any of that money was used to build on this. Uh this is your Digital Life app or the resulting analysis of the data that Facebook returned.

But this does raise even more eyebrows, saying, well, there seems to be a connection to Russia with this as well. That would not be the only connection, as we'll see on June four, two thousand fourteen, according to an executed contract that Chris Wiley would later supply to reporters, Cogan, acting as head of a company called Global Science Research, would hand over the data he collected to sc L in return for money, and that would seem to violate

Facebook's terms of use. In fact, it doesn't seem to. It did violate Facebook's terms of use. The terms were under the understanding that Cogan was doing academic research, and part of those terms said you are not allowed to share those results or to share that data, that raw data, with a third party. You cannot do that. We don't have permission to do that. But Cogan didn't. Uh So s c L was not part of this research, not

part of an academic research anyway. They wanted to make practical use of that data, so that violates the policy. Cogan would later say he felt he was being used a scapegoat. As a scapegoat in the whole matter that Cambridge Analytica and Facebook we're both pointing to Cogan and

saying he's the reason why we're in this mess. While he said that the general opinion was that if no one asked for permission, no one could be told no. And so generally speaking, even if you suspected that what you were doing was wrong, you certainly wouldn't ask anyone about it because you didn't want to be told outright it was wrong, because it would mean you wouldn't be

able to do it anymore. It was better to just keep doing the wrong thing, thinking it was wrong, but not knowing for sure, because you had plausible deniability, because as long as you didn't say, hey, is what we're doing, you know cool or not, no one could say no, that's not cool. Cogan, by the way, would also later say that the problem he ran into was that he

didn't read Facebook's terms of service. He didn't read the part that said he wasn't allowed to share that data, but moreover, in his own terms of service in the app he had developed it stated that the information might be used to be sold to third parties. That in the terms of service that he he submitted to Facebook, it said that the data gathered could be sold. Now that's in violation of Facebook's policies, but means that neither

party read the other's terms of service. And I know, I know for a fact, or at least not I don't know for a fact. I suspect that every single one of you out there, at some point or another, has signed up for something. And there was a little box, a little checkbox that said check to show that you have read the terms of service. And I know that you checked it. And I know you didn't read the terms of service because they were forty pages long and we all got better things to do with our lives.

But here's the problem. Cogan didn't read those terms of service, and he hands over the date of the Camerage Analytica. Facebook didn't read Cogan's terms of service. So Facebook didn't say, hey, no, that's totally not cool, We're not going to approve your app. Instead, it all went through and this would become an enormous

problem later on. Now, for Alexander Nicks, this was a great time because now he had a massive amount of data at his company's disposal, and he's been promising for a while now that he was going to have access to a whole bunch of information and they were gonna be able to draw a lot of different conclusions about that information. They're going to get very accurate pictures of various target audiences, and they'd be able to act upon

that in a way that would produce real results. And now he actually had the data that he could point to and say, Hey, we've got all this information, let's make use of it. We're gonna let's make some gravy pay us money. So that made a very effective sales pitch to potential but political clients in the United States. They could kind of back up what they had been promising, at least from a we have the data standpoint, And then by chance things clicked into place for Nix and

his team. There was a political consultant named Mark Block who with an associate of his, got on a flight from Los Angeles to New York and sitting in blocks row was a subcontractor who had worked with SCL and the subcontractor on the flight talked up SCLS methods and strategies and what they were planning on doing and what they were going to do with all this data, And by the end of that flight, Block and his associate were convinced that they should really get a meeting with

Alexander Nicks and talk about this. So they arranged for one and Block met with Nicks and was impressed by the sales pitch, so he went on to introduce Nick's to a woman named Rebecca Mercer. Rebecca Mercer is one of the daughters of billionaire Robert Mercer, and the Mercers are really big backers for Republican nominees in the United States. They are strong financial backers of the GOP. The Mercers have also invested millions of dollars in bright Bart News,

which at that time was led by Steve Bannon. The Mercers were on the lookout for a new leader in digital strategy because this was just after the elections in two thousand twelve. Mitt Romney had lost and the Mercers felt that a large reason why Romney was not able to win the election was due to the digital strategy that the Republicans had been employing up to that point.

Uh keeping in mind here that that Robert Mercer comes from a computer science background, so Steve Bannon, Rebecca Mercer, and Robert Mercer listened to Alexander Nick's pitch his company's capabilities in late two thousand thirteen, reportedly aboard the Mercer families two hundred three foot yacht just gotta be a nice place to have a meeting. And the meeting apparently went well because the Mercers and Bannon invested money into

a new company. The Mercer's reportedly invested about fifteen million dollars into this new company that spun off from s c L. And this company was Cambridge Analytica. And I'm gonna be talking a lot about Cambridge Analytica and s c L in the next episode. It's almost as if

you can use both names and interchangeably. But in our next episode, I'll talk more about what cambrigeen Aaltica did, how it handled all that data we talked about earlier, the fallout that happened after people found out what was going on, and more. Before I leave, I do want to mention that, according to all the research I read, well, cambrag general Ittica technically spun off from s c L.

The two organizations were effectively one and the same. According to multiple sources, s c L essentially handled stuff uh in the U k and outside the States, and Cambridge Gennaltica handled pretty much everything in the United States, but they depended heavily on the same staff, the same physical resources,

headquartered in the same building. So while it sounds like I'm ending this episode just at the founding of Cambridge Analytica, where you know, the whole episode just leads up to that one moment, I would argue that Cambridge Gennaltica really existed the whole time, just not in name and not with the specific focus of trying to influence political elections in the United States. So in our next episode we're gonna go into more detail about how that played out.

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