The British data-mining firm Cambridge Analytica has gone from mysterious genius to potential defendant as details emerge of its role in President Trump’s 2016 election campaign. With conservative strategist Steve Bannon playing a founding role, backed by money from billionaire Robert Mercer and his daughter Rebekah, the firm was able to develop data from 50 million Facebook users into a psychologically-based strategy to target voters.
Now there are legal questions about how it obtained that Facebook data. Investigations are gearing up in the U.S. and the U.K. The company this week suspended its CEO, Alexander Nix, over comments he made to undercover reporters from the British Television 4 News.
U.S. campaign finance law may have a lot to say about this. Here are some of the biggest questions.
1. Did Cambridge Analytica have a role in running the Trump campaign?
To hear now-suspended CEO Alexander Nix in the Television 4 News report, his firm handled almost everything except those Make America Great Again caps. He claimed it was responsible for all of the data, research, analytics and targeting, plus the digital and television campaigns. Notably, he said, “Our data informed all the strategy.”
But as a British firm, Cambridge Analytica runs into a federal statute that bars foreign involvement in American elections. The law was strengthened after the 1996 Clinton re-election effort had to disgorge millions of dollars from illegal donors.
“The Federal Election Campaign Act’s prohibition on foreign contributions is the broadest prohibition in the entire statute,” said Brett Kappel, a partner in the government affairs and public policy practice of the law firm Ackerman in Washington, D.C.
One provision of the law prohibits foreign nationals from holding decision-making positions in American campaigns. So the Trump campaign could hire Cambridge Analytica, and the firm could recommend, say, an ad-targeting strategy for Wisconsin. But a campaign official — a U.S. citizen or green-card holder — would have to approve it.
Nix’s comment seems to acknowledge that line; he’s saying the firm stayed on the right side of it.
2. Did Cambridge Analytica give or sell the data to the Trump campaign?
If the answer is yes, it would raise questions.
The Trump campaign paid the firm a total of $5.9 million, according to Federal Election Commission data processed by the nonprofit Center for Responsive Politics. The campaign’s filings say the firm provided data management and survey research. But estimates for how much the data is worth, as processed by Cambridge Analytica, run much higher.
If the firm gave the data, or sold it at less than fair market value, the transaction would amount to a campaign contribution — a two-fer violation of the law, which bars corporations and foreign nationals from contributing.
3. Did Cambridge Analytica have any other clients?
Just one of note: a superPAC called Make American Number 1. During the campaign it used the name Stop Crooked Hillary PAC. As that suggests — and as Cambridge Analytica executives indicated in the Channel Four report — the superPAC served as an attack dog to supplement the campaign’s messages.
According to that report, Cambridge Analytica treated the campaign and the superPAC as a single project. This might explain why Stop Crooked Hillary PAC paid the firm almost the same sum as the campaign — $5.7 million — for its services.
Campaigns and superPACs are supposed to be independent of each other. But ironically, the seemingly sleazy arrangement is within the norms of American politics. While the two political entities cannot coordinate their messages, they can hire the same vendor. It’s the vendor’s duty to set up two teams, walled-off from each other and legally bound to maintain the separation.
4. How much trouble is Cambridge Analytica in?
Nothing is proven yet, or even alleged. But it’s worth noting that the Justice Department has a small set of “core prohibitions” around campaign finance issues that it is vigilant about prosecuting. The core prohibitions include the bans on corporate contributions and on foreign contributions and expenditures, both of which could put Cambridge Analytica in the department’s sights.
You are one of the CPR readers who wants to know what is really going on these days. We can help you keep up - The Lookout is a free, daily email newsletter with news and happenings from all over Colorado. Sign up here and we will see you in the morning!