Facebook has other ties to Definers, the GOP-led opposition research group

Facebook has other ties to Definers, the GOP-led opposition research group
Zuckerberg Defends Company in Friday Meeting with Employees
SAN FRANCISCO — Mark Zuckerberg fiercely defended Facebook in a question-and-answer session with employees on Friday afternoon, pushing back against criticism of the company in the wake of a New York Times investigation into how it reacted to Russian influence operations.

In an hourlong videoconference broadcast to Facebook offices around the world, Mr. Zuckerberg responded to questions from employees on a range of topics, from Facebooks behavior over the past 18 months to how it should handle leaks to the media, according to three people familiar with the discussion but not willing to discuss it publicly because it was a private meeting.

Facebooks string of scandals over the last several years have highlighted the poor job Mark Zuckerberg has done running the company — and his lack of accountability. The social networking giants stock structure gives Zuckerberg near-absolute control over it, because the shares he holds get far more votes than those held by ordinary investors. Facebook is one of a growing number of companies that have such structures, which help to insulate insiders from outside investors and the public at large. Many investors have been agitating against such structures, but little can or has been done to bar them at already public companies such as Facebook. Congress can and should address the problem. No matter how poor a job Mark Zuckerberg has done lately running Facebook, hes almost certainly not going anywhere, because hes effectively his own boss.

Video: Facebook: Mark Zuckerberg plans to give users more control over what they see

The idea that Facebook tried to cover up anything was dead wrong, an impassioned Mr. Zuckerberg said, using an expletive in his response, according to these people. Some employees responded with muted applause and cheers.

Natasha Lamb, managing partner at Arjuna Capital, an activist investment firm that has challenged Zuckerbergs power at Facebook, with little success. Natasha Lamb Theyve had some success. A growing portion of newly public companies that have dual-class structures have sunset provisions that will end them over a period of some years. S&P Dow Jones Indices announced that going forward it will not include any additional companies in the S&P 500 or related indices that have dual-class stock structures. And FTSE Russell announced that to be listed on its indices, companies must have shares worth at least 5% of the companies voting rights held by outsiders or trading freely.

The session came at a fraught time for the social network, as executives mobilized to deal with a torrent of criticism of the company. A Facebook spokeswoman declined to comment on the Friday meeting.

Thirty years ago, as the number of companies with dual-class structures started to tick up, the Securities and Exchange Commission tried to force the stock exchanges to bar the practice among their listed companies. Unfortunately an appeals court struck down the rule less than two years after the SEC approved it, clearing the way for Facebook, Google, and other companies to go public with dual-class structures. The appeals courts reasoning was that Congress hadnt explicitly given the SEC the authority to force the exchanges to mandate companies have particular stock structures.

On Wednesday, The Times reported about a struggle at the top ranks of Facebook with how to respond to Russian disinformation operations and revelations of weak data privacy protections. In particular, there was considerable tension between Sheryl Sandberg, Facebooks chief operating officer, and Alex Stamos, the companys former chief security officer.

Its no wonder, then, that investors have repeatedly shown they are indeed unhappy with Zuckerbergs leadership. Last year, a majority of independent shareholders of Facebook voted in favor of a proposal that would have required it to replace him as chairman with someone who had no ties to him or the company. A similar proposal is slated to be up for a shareholder vote again next year. Meanwhile, the company has seen numerous shareholder resolutions in recent years that have sought to take away some of Zuckerbergs power and to provide more outside oversight the company.

Yup, Sheryl Sandberg yelled at me, Mr. Stamos said in an opinion piece published in The Washington Post on Saturday. I had no confidence that wed found out everything the Russians were up to, and it was quite possible that things would get worse before we built the teams and invented the technology necessary to stop it. Sheryl — as reported in this past weeks New York Times investigation — felt blindsided by this. (She later apologized.)

That sterling reputation took a serious blow this week. A report from The New York Times shows that, while Sandberg was building her global brand, she was using aggressive and underhanded tactics at Facebook. As the company faced increasing criticism and pressure over its handling of fake news, election interference, data abuse, and the incitement of ethnic violence and genocide, she embraced a strategy to suppress information about Facebooks problems, discredit its critics, and deflect blame onto its competitors. She berated her security chief for being honest about the extent of the Russian campaign on the site. And she employed multiple crisis PR firms that spread fake news as a defense tactic, in one instance tying critics to the liberal billionaire, George Soros, a frequent subject of anti-semitic abuse online.

The company had also hired Definers Public Affairs, a Washington, D.C. consulting firm, to seed opposition research on Facebook critics. Definers also linked George Soros, the liberal financier, to anti-Facebook groups. Facebook cut ties with the firm after The Times investigation was published.

Video: Facebook shares drop after Zuckerberg tried to defend company

Facebook is still a trash fire as execs deflect blame

In a conference call with reporters on Thursday, Mr. Zuckerberg criticized what Definers had done on behalf of his company and said he and Ms. Sandberg were not aware of the specific work the outside firm was doing. He added that someone on the companys communications staff probably hired Definers, although he later complimented the communications staff for their hard work.

But what did Sandberg expect when she hired a Republican opposition-research firm? It was a short-sighted response that will have long-term consequences, for both Facebook and Sandberg. In her Facebook post, Sandberg denied any knowledge of the company or its work. I did not know we hired them or about the work they were doing, but I should have, she wrote. I have great respect for George Soros—and the anti-Semitic conspiracy theories against him are abhorrent. But the damage is done. Now we know Facebook will do whatever it takes to make money, Rishad Tobaccowala, chief growth officer for the Publicis Groupe, told The New York Times. They have absolutely no morals.

Video: Zuckerberg defends Facebook after release of NYT article

In general, we need to go through all of our relationships and evaluate what might be more typical D.C. relationships and decide if we want to continue with them, Mr. Zuckerberg said on the call.

The Facebook founder tasked Sandberg with a daunting goal: Make the company profitable. It took her just two years to do so. In 2017, Facebook made in $40 billion in advertising revenue, and today the companys market capitalization is $400 billion. Sandberg also brought a corporate professionalism to the company. If Zuckerberg was the baby-faced tech visionary, Sandberg was lead adult in the room, taking care of Facebooks economic and political needs. She has been so successful that she was rumored to be the frontrunner to lead the Treasury Department if Hillary Clinton had become president.

Mr. Zuckerberg said much of the criticism of his company over the past 18 months — specifically regarding election security, content moderation and disinformation — had been fair and important.

Facebook published a response addressing allegations that they worked with Definers which stated: The New York Times is wrong to suggest that we ever asked Definers to pay for or write articles on Facebooks behalf ― or to spread misinformation, Facebook wrote. Definers did encourage members of the press to look into the funding of Freedom from Facebook, an anti-Facebook organization. The intention was to demonstrate that it was not simply a spontaneous grassroots campaign, as it claimed, but supported by a well-known critic of our company. To suggest that this was an anti-Semitic attack is reprehensible and untrue.

Ms. Sandberg, who also attended the session, added that I fully accept responsibility for Definers, according to two people familiar with the conversation. That was on me.

A recent article published by the New York Times titled Delay, Deny and Deflect: How Facebooks Leaders Fought Through Crisis, provides insight into how Facebook has operated through numerous crises over the past few years. The report also alleges that Facebook hired a PR firm which published articles critical of Facebooks competitors through an associated conservative news website. Facebook also reportedly hired a Republican opposition research firm to discredit activist protesters critical of Facebooks data breaches. This was done partly by linking them to the left-wing financier George Soros.

How Facebook employees reacted to NYT report on leadership, scandals

But Mr. Zuckerberg and Ms. Sandberg said The Timess investigation was completely unfair and at times simply not true.

Facebook Should Say Whether It Attacked Critics, Lawmakers Say

Much of the discussion centered on boosting employee morale. Elliot Schrage, Facebooks former vice president of global communications and public policy, returned to the company for the meeting on Friday.

Facebook CEO Mark Zuckerberg also discussed the NYT report at a press conference, eerily echoing Sandberg’s statement: Ive said many times before that we were too slow to spot Russian interference and we certainly stumbled along the way, but to suggest we werent interested in knowing the truth or wanted to hide what we knew or wanted to prevent investigations is simply untrue.

Mr. Schrage said that Facebook was in a difficult news cycle, and that things would eventually calm down, and he urged workers to keep trying to do their best and work on the companys tough problems.

In a year marked by scandals, Facebook continues to be shaken by damning revelations. The social network is once more in the eye storm, thanks to a bombshell report by the New York Times, which details how the company relied on shady tactics and misdirection to hide its problems and manage its public image during the last 3 years.

Some Facebook employees indicated that they believe The Times and other news outlets are unfairly targeting the company because of its outsize influence — a sentiment shared in the session on Friday when employees asked executives what would happen to employees who leak information to the press.

"Look, I learned about this reading in the New York Times yesterday," Zuckerberg said. "As soon as I learned about this, I talked to our team and we're no longer working with this firm." The original investigative piece said that Sandberg oversaw Facebook's response to the Russian hacking and thus was responsible for hiring the firm, Definers Public Affairs. But she suggested an underling did the hiring. "I did not know we hired them or about the work they were doing, but I should have," she wrote in a statement. "I have great respect for George Soros—and the anti-Semitic conspiracy theories against him are abhorrent." The president of Soros' Open Society Foundation called Facebook's participation in the effort to go after Soros "reprehensible" and "frankly astonishing." (A Facebook exec's public support of Brett Kavanaugh didn't sit well with critics, either.)  

Mr. Zuckerberg made it clear that Facebook would not hesitate to fire employees who spoke to The New York Times or other publications. But after an employee asked whether the company should issue a report about how many leakers Facebook had found and fired, Mr. Zuckerberg played down the idea.

(Newser) – Mark Zuckerberg went on the defense Thursday after a damning report in the New York Times faulted him and COO Sheryl Sandberg for how they handled the Russian hacking controversy. "The reality of running a company of more than 10,000 people is that you're not going to know everything that's going on," he told reporters, per the Times. The gist of the original story is that Facebook's top two execs were first oblivious to the problem of Russian hackers, then later tried to cover up the story or at least deflect blame from the company. Both Zuckerberg and Sandberg distanced themselves Thursday from one of the more controversial aspects of the story—that Facebook hired a Republican opposition research company that tried to link anti-Facebook protesters to George Soros, reports the Guardian.

The Facebook CEO was shocked and appalled at the conduct of his company, he told reporters on a conference call Thursday, responding to a bombshell New York Times report that Facebook hired a D.C. opposition research firm called Definers Public Affairs which proceeded to undertake all manner of ethically fraught actions on its behalf.

"A fraction of our work with Facebook included providing research and background information about critics – both on the left and the right," the statement said, "This practice, standard across many industries, is based on researching public records and databases available to anyone. When we do research, each item includes a link to the source material – a standard way to ensure information is communicated in facts, not innuendo."

Its not just Facebook. GOP-linked firm brought oppo research to Silicon Valley

I learned about this yesterday, Zuckerberg said. Pressed to explain who, then, was aware of Facebooks relationship with Definers, he offered the verbal equivalent of a shrug: Someone on our comms team must have hired them.

This week, a New York Times investigation found that Zuckerberg downplayed and denied Russian meddling in the 2016 election on his platform. The report also said he and COO Sheryl Sandberg launched a multi-pronged lobbying campaign against rival tech companies through a consulting firm called Definers Public Affairs that engaged in questionable tactics, like linking anti-Facebook activists to liberal billionaire George Soros.

Chief Operating Officer Sheryl Sandberg echoed that denial in a note published later Thursday. I did not know we hired them or about the work they were doing, she said, but I should have.

So unless that changes, unless they are making decisions from this core belief that they dont need to protect their reputation above all else at any cost, but that maybe they can be more transparent and be more open, then I think theyre going to continue facing these crises and their stock price is going to reflect that.

A TechCrunch breakdown of Facebooks communications team found numerous staffers linked to Sandberg formerly worked for Mitt Romneys presidential campaign alongside Matt Rhodes, who founded Definers after the campaign. This includes Facebooks Director of Policy Communications Andrea Saul, who worked for Sandbergs non-profit LeanIn.org for two years after the campaign concluded.

Ive seen members of Definers sitting in the room with Facebook executives when theyre announcing big changes to the company, Lapowsky said. "So it does seem pretty hard to believe that the two top leaders of this company wouldnt have known that they were working with Definers.

Another possible link: Facebooks chief lobbyist, Joel Kaplan, worked in the George W. Bush White House at the same time as Rhodes and has strong ties to Sandberg. The two attended Harvard together and he reportedly consults with her on high-level strategy at Facebook ― including deciding to downplay Russian disinformation activities on the site, another bombshell allegation made in the Times report. (Facebook denies this).

In addition to Sandbergs internal corporate ties to Facebooks communications and policy leaders, her claim of ignorance doesnt line up with basic executive oversight.

Senators press Facebook for response to reports that they retaliated against critics

Documents obtained by NBC show Facebook paid Definers $3.3 million for its services in the first quarter of 2018 alone. Assuming the relationship lasted longer than one quarter, thats one hefty annual expenditure for both a COO and CEO to know absolutely nothing about.

Their denials also represent a 180-degree reversal of the companys own spin. Just one day earlier, before its top executives publicly professed their ignorance, Facebook sought to combat the story by painting its contract with Definers as mundane, common knowledge:

Our relationship with Definers was well known by the media, the company said in a release, not least because they have on several occasions sent out invitations to hundreds of journalists about important press calls on our behalf.

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And finally, Sandbergs and Zuckerbergs portrayal of Definers relationship with the company as a little-known undertaking conflicts with Definers own description of it. While Definers disputed the nature of its work in a statement Friday, the firm said its work for Facebook included a large-scale news alert service that kept hundreds of Facebook staff informed.

Facebook slumps after Mark Zuckerberg and Sheryl Sandberg respond to the New York Times exposé (FB)

– Seeking to undermine and discredit Facebook critics in a group called Freedom From Facebook by linking them to the billionaire Jewish philanthropist George Soros, a common tactic on the far right thats fueled by anti-Semitism. Even worse, Soros didnt even fund the group.

– Lobbying a Jewish civil rights group to then cast Facebook critics as anti-Semitic. (Zuckerberg and Sandberg are both Jewish).

– Propagating disinformation about Facebook critics and competitors like Apple and Google ― via a verified Facebook page operated by Definers called NTK Network― that was dutifully picked up and disseminated by far-right outlets like Breitbart. (A former Definers employee described NTK to NBC as our in-house fake news shop.) 


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