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What Facebook Knew and Tried to Hide
The from the New York Times, I'm Michael Barbaro. This EPA daily. Today. The story of Facebook has been of a company slow to understand how powerful it is become but an investigation by the times finds that even once it's leaders understood the problem, they then sought to conceal it to of the reporters behind the story, Nick confiscatory and Shira Frankel on what they found. It's Friday November sixteenth. Hello and welcome Chris hall. There will be from our Hyun H Apollo now. I'd like to turn the ball over here and Baru communication. Joining us on the call today, we have merged Laker bird basic standards that yell for happy take questions on yesterday's news. But help to focus the majority of the on the topic at hand with that. Let me turn it over to Marc together started. Everyone. Thanks for joining us today started. I I wanna take a moment to talk about yesterday's stories Republican the response last night. I want to be very clear about one thing. Friends. I've said many times before we were too slow to Russian interference to some ended get on top. And we certainly symbol the one the way. Just that we weren't interested in knowing the tricks for that we wanted to hide will be new or they'll tried for patients is simply on. Nick. Does your reporting again? So for us it again in twenty sixteen it's right after the presidential elections and Marco gets on stage and says personally, I think the idea that fake news on Facebook of which, you know, it's it's a very small amount of of of the content influence the election in any way. I think is a pretty crazy idea outside the company. I think reporters are that. And sat up and said what voters make decisions based on their lived experience. And it turns out when we started asking people within Facebook that internally Facebook executives were also released apprised prized there were people in his own company that heard him say that and realized that he himself didn't know what was happening within the company. And specifically what the Russians were doing also walking into this kind of a buzzsaw because outside the company in Washington and in public now under fire critics say and allowed fake news to spread on the. Platform potentially reaching millions of people unfairly influencing the presidential election of people are increasingly talking about the role of Facebook's how it shapes politics. How Trump himself with Facebook? I have like close to seven million or more than seven million people with Instagram. We have won the election using social media Berg saying no, it wasn't us. So what do you learn that the is concerned employees inside Facebook do after they hear is set up. So these employees which include people on the security team led by Alex stamos. He's a time cyber security executive, and they say, we've gotta let them know what's happening and to go over the head of their bosses. They go over the heads of their bosses losses and directly Email, Mark Zuckerberg and his chief operating officer, Sheryl Sandberg and say, you guys have missed something huge here, we've found activity, and you don't seem to know about it, and what kind of activity have they found that they are surprised that their own bosses don't know about. So at this point they really found the tip of the iceberg of what Russia is doing. There were Russian accounts that they'd been following for really longtime. These accounts went back years, and they were connected to Russian tool farms, and they saw this really significant uptick in their behavior around the presidential campaign. And so they knew that there was something serious underfoot. They knew that this was a big. Effort a bigger push by Russia the made seen in the past. So how do these two senior people at Facebook Sandberg Coburg respond to this intervention by their employees? So you have to little bit about their personalities tender stand how they responded, Mark Zuckerberg. You know, he's he's so closely associated with Facebook. It's his baby every time he talks about it. He talks about how he started it in his dorm room. Right. He's thirty four years old. This company has been his whole life. So his immediate response is will what's the technical fix? What do we need to do what team needs to be in place? Should I throw engineer is it? I mean, that's that's the way his brain works. And then, you know, just next to him Cheryl Sandberg, who's in charge of things like policy and odds, you know, she's a political creature. She comes from DC. She's immediately thinking what risk of you expose us to was the legal risk here. How much should we investigate? Is. This really something we should take on a company or are we going to find out things here that we don't wanna know? So mmediately there is a division in the way that they are. Are thinking about this and responding to this alarm bell being rung by the security team at Facebook saying we have a Russian problem. Yeah. There's such different people. I mean, the way they handle the company is very very different, but Cheryl, who's also kind of seen as adults in the room is very much thinking about what are the consequence is going to be. So what does she do as a result of that? So the yo the security team and stay little bit and say, you know, you shouldn't have looked for this without letting us know, you should have put together a team to look at this without letting us know investigated Russian meddling on Facebook. Right. You should not have done it without letting the boss a sign off on it. I think was the sentiment, and then they basically put together their own team, which is broader but tries to mimic what Alec stay MRs team was already doing just kind of seeing what more can we find what other Russian interference can we possibly find? And as they start to find stuff being mmediately start to ask themselves. What is going to be the response? How is the American public, and especially conservatives going to respond to this? Evidence that they have that Russians not just formed Facebook groups and accounts, but really seemed to have a wide ranging influence campaign that was affecting US voters and remind us why are they concerned about the response of conservative in particular. So at this moment in time, Washington Republican dough and their fate is in the hands of the conservative party in the US and the entire thing has been a witch hunt, and there is no collusion between. Now, the Muller investigation has become a partisan food fight, right? If the president tries to fire special counsel, Robert Muller, the Bill would provide some speed bump. Why first of all you calling this a witch hunt because it's clearly careened way out of control. President Trump is saying it's a witch. He's got more and more Republicans in congress saying it's a witch hunt is so now all of a sudden Facebook is find the evidence that in fact, it's not a witch hunt. And all that can do is throw them on the wrong side of power in Washington with a party that already thinks they're a bunch of liberals and hippies on the west coast. So their investigation decides that or nounce to them that they want to put together a public post essentially saying we found evidence of this. And here's the beginning. The tip of the iceberg of what we found, and they get told not to do that. They get told that it's too early. It's too soon. They should spend more time investigating and it's not the rule of Facebook. They told very very clearly that they should leave it to intelligence agencies to the government to announce that sort of thing and sure who tells them not to disclose publicly executives like Sandberg and people involved in Facebook policy wings them down. And they say we don't want you guys. To write this big public post naming Russia. It's just gonna go in trouble. If you have to write a white paper, just talk broadly about kind of what security Facebook has and what our security concerns are. And don't mention Russia. Not a single word can be in that paper that points back to Russia. And that's what we saw published but Facebook has another problem. A lot of these posts from the Russians were basically appropriating conservative themes in memes ideas and arguments, and they were using the most vitriolic conservative content. They could find reflecting back into American politics on Facebook. And so now if Facebook takes actions because look though, they're taking action against conservative ideas. And they already have a bunch of conservatives who feel like Facebook and Twitter and other platforms are censoring them blocking them from speaking on their platforms. And so Facebook makes a fateful decision. Which is what they decide not to take down the Russian accounts. And we know Sandra herself decides to sign off on that decision. So they sort of enter a holding pattern at this point. They don't want to take down the count's. They don't want to say anything more than this broad very vague paper that they've published and what's interesting during this time is that markan shirl get really really busy with other projects. We're a long way from the Harvard dorms where Mark Zuckerberg created Facebook. But the multi-billionaire looking to drop the book and come face to face with the people who've made the social network giant. What it is today? He's traveling the United States in milking cows, and she's promoting her book. He's milking cows he's milking cows soccer got the full farm experience feeding calf even taking out the families seventy year old reconditioned tractor feted goat. We are just over one hundred days into Donald Trump's presidency. But some people already have an eye on twenty twenty this even rumors at this point that he's going to run for president is Facebook's chief operating officer and founder of the lean in movement, Sheryl Sandberg. Cimber? Meanwhile, has her own brand than going on women raise your hand. If someone's told you you're too aggressive at work, and what's going on inside the company during this time. Now that this investigation has shown them that they do have a real problem. So inside there's sort of slow reckoning. There's one moment but by bit as they start to find more and more. They realized they're going to have to go public with it. It's just too much to continue hiding and so through the summer in the fall, we see these meetings kind of amp up until we get to August. And August they start meeting almost every single day. They're going to go to the board. They're gonna have a big board meeting, and they're gonna let those guys know what's happening, and they're going to go public with a blog post and let the US public know. Exactly. What's happened? But Facebook is already backing itself into a corner because the Senate intelligence committee zeroing in on Facebook and Facebook has been telling people on the hill knows only the sea here. There's no big rush problem here, but the Senate intelligence committee, which at this point is the only remaining public investigation, the house investigation has gone so. Oh, that's phone apart. But the Senate committee is really breathing down their necks and getting closer and closer and Facebook is already been telling them, it's not a big deal. There's not much to see here. Let's move on. And so we're getting in September. They know the Senate investigations coming. They've got questions coming in from senators, and they gear up for this board meeting, but I decided to send Alex most brief the audit committee, and it's just a small group three members of the board. And they figure that he can give them some technical details about what he's found. This is the head of the security division of the company. Yes, he's been kind of leading the security investigation. And he knows the most probably from a technical point of view of what Russia's been doing. So he sits down, and according to multiple sources we've had talked about this. Meaning he ends up sing a lot more than they thought. He was going to say and so- hours later when it comes time for more control to sit down with the board bay lay into them. And there's cursing and shouting, and they're being asked how could you waited until now to tell us how could it have taken? As long view is to find this. And they're Florida. I mean, they did not expect this kind of reaction from the board and just mine, right? Cheryl, sambergen, Mark Zuckerberg or calms their celebrity. They're billionaires there on magazine covers they're innovators. They're celebrated in here. They are being yelled at called on the carpet by their board for a major screw-up that could endanger their company, and what is their reaction to that humbly experience. So their reaction very next days to call a meeting in Facebook. There's this glass room it's called the aquarium and it's marks office. It's in the middle of the building anyone can walk by. And they hold this meeting there with dozens and dozens of people and in front of all these dozens of people and untold other numbers of people who have called in Cheryl just lose it at Alex demos. And she starts screaming at him and saying us through us under the bus, and it goes on for a while to the point where people in the room are uncomfortable. And according to the people we spoke to who were there. They said, you know, Alex Roldan, say much and nobody else in the. Room knew what to say. And eventually Mark just kinda says. Okay. Well, let's move on from this. Let's talk about what the next steps are. I mean, it's really amazing, right? This moment has come. And what is she mad about? She's mad at the security chief for finding the problem telling the board about it. And is it our understanding here that Alex stamos did indeed throw the top executives, including Sheryl Sandberg under the bus that it was an intentional outing of them to the board. So the people we spoke to you thought it was really specific things that he said to the board that had angered her. And namely that it was he hadn't briefed her fully on what he was going to say. And he made it seem like there was still going to be more Russian stuff to come that. There was probably still stuff that they hadn't found through. And that it was likely Russia was going to try and do this again. And we were told that she was really upset about those kinds of things that he said that he made it seem like they hadn't fully gotten a grip on the problem, which we now know his true. What would be your interpretation of why Alex stamos chose to share that with the board perha-? Perhaps he was concerned that Sandberg are were not being forthcoming enough that they were hiding this. I don't know if that was his motivation. But I do think that, you know, historically, he's been someone who at companies worked up before in public speeches. He's given he's always kind of held to this notion of utter transparency, and it's gotten him in trouble in the past. And it's obviously gotten him in trouble here. But I think that his version of radical transparency was not something that Markelle were expecting. Will there it back? The daily is brought to you by TD Ameritrade when it comes to investing each of us. Does it our own unique way? Some of us wanna go it alone. Others might prefer some guidance, regardless of your style. TD Ameritrade is always creating new solutions to help you from their ward winning technology to personalise guidance. They have everything you need to invest on your terms. Visit TD Ameritrade dot com slash the daily to learn more and get started today. Okay. So that was September of twenty seventeen summarize for me. What is Facebook's message internally and externally during this time when the public and the federal government are talking more and more about possible Russian interference and exploitation of Facebook to do it now while I was out on leave. I spent a lot of time with our teams on the issue of Russian interference in the US elections on top of it. I don't want anyone to use our. Tools to undermine democracy. We're gonna fix it. We've been investigating this for many months now the problems will be fixed. You don't have to investigate us. You don't have to sue us. We are actively working with the US government on its ongoing investigations into Russian interference. That was their message. He they just told people to hold tight and don't worry we're going to get over this one. And so this is the state of things for months and months until what things get even worse. Cambridge Analytica the data privacy scandal, which is created a nightmare scenario for Facebook. Last March the times and the guardian prepared to publish a joint investigation into a small political data firm that worked for President Trump had somehow gotten its hands on the personal Facebook data tens of millions of users and possibly helped Trump win with that data and now Alex demos. Facebook's chief information security officer will reportedly leave the company by August. He urged for more disclosure. Over Russian activity on the site. And now all bets are off. Meaning what they're in crisis mode again. So this was a major richer trust. And I'm really sorry that this happened. So suddenly, they have a second scandal in some ways it's worse than the first scandal because everybody is mad. Mr. Berg, would you be comfortable sharing with us? The name of the hotel you stayed in last night. The Democrats are mad at them. Limit ask the question again this Facebook consider itself to be a neutral public form and representatives of your company of giving conflicting answers on this publicans are mad at them. Their users remanded them Facebook stock plummeted yesterday closed down nearly seven percent losing thirty six billion dollars shareholder value. They are in deep trouble. And it's only getting worse. Zaka Virk and chief operating officer Sheryl Sandberg have both promised to prioritize the safety of user data going forward and limit. What information is available to third parties. So this time in the second round of controversy. Facebook is feeling like it's facing more existential threat. Right. So now, they have investigations coming at them in Washington and Brussels in London, the Federal Trade Commission is decide to reopen a probe into Facebook to see if they violated a consent decree with the federal government, but it's more serious than that. Because the Cambridge scandal. Suddenly makes people look at Facebook's business model and their business model is through Valence. It's clicking data on you. Watching what you do on Facebook and around the web making inferences and selling ads on that. And all of a sudden people are saying, wait a second. I think that might be a little creepy. And then some people are saying, and if that helps elect President Trump, I am not okay with it. Right. I mean, this is a scandal that undermines their entire business. If they don't have your data. They can't sell ads, and they realized really quickly that if people are stopping to use Facebook or going into their privacy preferences and limiting the mount of data. They give Facebook that's a huge threat to the company. And of course, back in Silicon Valley were the egos are as big as the fortunes, there is some sniping ins backbiting the truth says we could make a ton of money. If we monetize Dr customer, if our customer was are pro we've elected not to do that. Tim cook. See you apple he goes on MSNBC. We're not gonna traffic in your personal your personal life, basically castigates Facebook for their business model says well, apple doesn't sell your data privacy to us is a human right? It's a civil liberty. I would never be in this position. And basically kind of a pointed jibe, and Mark Zuckerberg is fellow take own. There's a long standing rivalry here between companies like Facebook and apple and Google for that matter, and this is really seen by Mark, especially as Tim cook. Trying to kick him while he's down and decision gets made around that time and Facebook executives get told. Hey, you know, we don't really wanna see iphones around here. If you guys can start using Android phones that would be a lot better. What else do they do a couple of things? But what's fascinating here is at Facebook starts to adopt a public approach and a private approach in public. They're very conciliatory. Berg is apologizing says, you know, what I'm gonna come testify before congress. I think it's time for. Some kind of a regulation. I'm open to it. They start laying plans to have an advertising campaign to apologize to their users now on Facebook do more to keep you safe and protect your privacy. So he can get back to Facebook good in the first place friends because when this place does what it was built for. And we all get a little closer. But in private Facebook is going on the attack. And what is that book? Like, they start to use the full toolbox that big companies hedge funds activist investors telecoms us when they're in trouble in Washington, and one thing in particular, they go to a Republican PR firm definers that specializes in part in campaign style, political campaign style up research and the contacts you see in a presidential campaign, and they say Facebook, we can offer that to you and what do Facebook and definers start to do together. So probably what they're doing is organizing press Kohl's and doing research on people on the hill, the kinds of things that PR firms will always do for big companies, but they have something else in their toolbox to something else in their quiver. They have essentially a fake news site that they own called the N T K network, and they write their own stories on this thing, and the story is blast their clients enemies and support their clients the stories themselves, I think are mostly factual not like fake news. But it is propaganda. So what's amazing here is confronted with a scandal that they have enabled propaganda to overrun their platform. They turn to a PR firm to generate propaganda for them. And what does that propaganda? Look like all good propaganda. It's believable. It's things. Like, let's not ask questions about Facebook. Let's ask questions about apple. What's apple doing is? Tim cook a hypocrite himself. What's his stance on privacy? And there's enough truth there, there's enough basis in reality that these stories get picked up by number of other sites, and we start to see other conservative websites and blogs running these stories so this is kind of underhanded and yet just factual enough to generate interest. Exactly, I think what's interesting here is that these tactics are so completely unusual, right? Like, the world's hard place in Washington took place but Facebook had held itself out like Google like Twitter as this different kind of company was even in their in their securities filings. We exist to bring people together baby photos. Mitzvahs weddings, community building. And so in some ways, they set themselves up as a different kind of company, and what they're showing now is there just like every other company. And in some ways worse because then they went down the totally different road except profitability of these companies his ass hunk tion of their avoiding restful ability, a big critic of Facebook, and this all began was George Soros, they billionaire and he'd given a speech at DAV where he really lit into Facebook and Google that dominance. They must expand their networks and increase their share of the uses attention. He called the monopolist to no responsibility to the society around them in destructive. So he really laid down a marker. And what they did next was definers are looking into George Soros. And they eventually were strict relating documents. That basically suggested that if you looked at the criticism Facebook was getting from civil rights activists, and some consumer groups we should also look at the funding. Those groups were getting from source. The implication was the Soros was kind of masterminding this whole anti Facebook push that appeared to be grassroots push. And there are two things about this. First of all there is some truth to it. Because some of the groups that are in these anti Facebook coalitions, do get some grant money from the philanthropies. The problem is they are now moving into a different kind of conspiracy theory world in taking on Soros. They are tapping into a well of the leftist Jews have completely met at alliance radical Islam rumor and smears and anti semitic conspiracy theories and just like. Phillies round up Jews for Hitler these doing it again today. I mean Soros is literally the number one living Nazi that they themselves are not peddling that other people are going to bring to that discussion and that is dangerous territory. So Nick and share what are we to make of everything that we have just talked about? Here are reporting over the last year has been about this idea that Facebook was in over its head that it had grown to be something uncontrollable, but it needed to be controlled. And they weren't a quick to do that. But this latest reporting from you both, and our colleagues seems to suggest that there may be a larger problem of knowing what's going on and spending more energy inside Facebook trying to protect the company then perhaps protect the country. I think this is a story about a company that built something incredibly powerful didn't realize exactly how it worked even though they had built it. And when they started to discover the dark side to the thing they had Bill they did everything they could keep people from knowing. And when people start to find out they tried to solve the problem by pushing back. By shifting attention to other people by deflecting denying delaying. In every era. There is some new big industry that grows faster than it. Should it was true with the food industry and meatpacking plants? It was true with standard oil oil industry. And what happens is there was always a moment when journalists and the public begin to understand what is behind the product, they are consuming, and this seems to me for Facebook for big tech. This is their Upton Sinclair moment, this is the moment. When people around the world see inside the sausage factory and see what is there, and they don't like it. Sheera nick. Thank you very much. Great to be here. Thank you. On thursday. Facebook ended its relationship with definers public affairs. The firm that had spread negative information about Facebook's critics and competitors in Washington booth democratic and Republican lawmakers responded to the times investigation by calling for stronger. Regulation to restrain Facebook's power Representative David Cecil Leany, the top democrat on the house antitrust subcommittee said quote Facebook cannot be trusted to regulate itself. Here's what else you need to note, Florida has ended the first phase of its recount of last week's elections with Rhonda Santa's a vocal conservative and enthusiastic. Ally of President Trump holding his lead in the governor's race over democrat, Andrew gillum. But in Florida's contested Senate race state officials have now ordered a manual weekend with Rick Scott, a Republican holding just a twelve thousand vote lead over the incumbent Democrat Bill Nelson a lead of zero point one five percent. A tenth of a percent below the margin that triggers a manual recount. The daily is produced by feel about Lindsay garrison. Rachel Wester any Brown, Andy mills, I calm Raja. Claire tennis getter Michael Simon Jones, Jessica Chung and Alexander Leon and edited by page count. The Russia Anderson and Wendy door special. Thanks to Sam Domec Maceio Bouchard, Stella tan and David crackles. That's it for the deal. I'm Michael see Monday. Here's to the early bird and caring about how things are made. Here's to starting every day. Like it Sunday and Sunday's being just another day. Here's to inspiring. Better. Sleep, wellness and happiness at home. 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