Trump’s Rise to the White House: Cambridge Analytica Targeted “Inner Demons”

By Pam Martens and Russ Martens: March 19, 2018

According to news reports last Friday and over the weekend, Facebook has landed squarely in the middle of the next explosive leg of the Trump-Russia scandal. According to the Guardian’s Observer newspaper in the U.K., a digital data mining company known as Cambridge Analytica collected private information from approximately 50 million Facebook users in order to support Donald Trump’s presidential campaign in 2016.

Trump’s campaign hired Cambridge Analytica in the spring of 2016 and “paid it more than $6.2 million,” according to a Reuters report.

A Cambridge Analytica whistleblower, Christopher Wylie, told the Observer that “We exploited Facebook to harvest millions of people’s profiles. And built models to exploit what we knew about them and target their inner demons. That was the basis that the entire company was built on.”

According to the reports, the “inner demons” were unleashed through personalized political advertisements after the personal information was collected through an app called “thisisyourdigitallife.” The app was built by a Cambridge University academic, Aleksandr Kogan, who is also reported to have been an “associate professor at St Petersburg State University, taking Russian government grants to fund other research into social media,” according to a report in the Guardian.

Facebook has suspended both Wylie and Cambridge Analytica from its platform but denies it did anything wrong. (Read its statement here.) Its stock is down almost 5 percent in mid morning trading.

In 2015, Politico reported that Cambridge Analytica “provides governments, political groups and companies around the world with services ranging from military disinformation campaigns to social media branding and voter targeting” and that the company had “boasted of its ability to help foment coups.” The article indicated that the company was owned, “at least in part” by hedge fund billionaire Robert Mercer.

On November 20, 2016, Wall Street On Parade published an investigative report on “The Right Wing Group Behind Donald Trump’s Rise Aims to Keep Fear Alive.”  We reported that Robert Mercer’s daughter, Rebekah Mercer, sat on the Trump Transition Team’s executive committee. That committee was heavily involved in selecting Trump’s cabinet and key staff. We documented that many of the same corporate front groups being funded by the Charles and David Koch foundations were also funded by the Mercer Family Foundation.

We also reported on how Robert Mercer’s hedge fund, Renaissance Technologies, conducted its business. We wrote:

“In 2014, the U.S. Senate’s Permanent Subcommittee on Investigations hauled [Renaissance Technologies’] executives before a hearing and accused it of ‘tax avoidance of more than $6 billion.’ The hedge fund, and others, had concocted a scheme to magically change short term capital gains into long terms capital gains while also using enormous leverage provided by the too-big-to-fail banks. As we reported in detail in 2014:

“…the hedge fund makes a deposit of cash into an account at the bank which has been established so that the hedge fund can engage in high frequency trading of stocks. The account is not in the hedge fund’s name but in the bank’s name. The bank then deposits $9 for every one dollar the hedge fund deposits into the same account. Some times, the leverage reaches as high as 20 to 1.

“The hedge fund proceeds to trade the hell out of the account, generating tens of thousands of trades a day using their own high frequency trading program and algorithms. Many of the trades last no more than minutes. The bank charges the hedge fund fees for the trade executions and interest on the money loaned.

“Based on a written side agreement, preposterously called a ‘basket option,’ the hedge fund will collect all the profits made in the account in the bank’s name after a year or longer and then characterize millions of trades which were held for less than a year, many for just minutes, as long-term capital gains (which by law require a holding period of a year or longer). Long term capital gains are taxed at almost half the tax rate of the top rate on short term gains.”

In 2015 the Internal Revenue Service released a memo indicating that the basket option was an improper maneuver to convert short term capital gains into long terms gains. And yet, there has been no public announcement of any Federal regulatory action taken against Renaissance or Mercer over the $6 billion tax avoidance scheme.

One of the banks facilitating the Renaissance trades was Deutsche Bank. As we reported last Wednesday, Deutsche Bank is up to its eyeballs in the Trump-Russia probe. We noted the following:

The draft report released by the Democrats after belatedly learning that their Republican colleagues had abruptly ended the [Trump-Russia] probe, included this paragraph:

‘Donald Trump’s finances historically have been opaque, but there have long been credible allegations as to the use of Trump properties to launder money by Russian oligarchs, criminals, and regime cronies. There also remain critical unanswered questions about the source of President Trump’s personal and corporate financing. For example, Deutsche Bank, which was fined $630 million in 2017 over its involvement in a $10 billion Russian money-laundering scheme, consistently has been the source of financing for President Trump, his businesses, and his family. We have only begun to explore the relationship between President Trump and Deutsche Bank, and between the bank and Russia.’ ”

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