general speeches. legislative is starting at 2:00. on c-span2, secretary of state mike pompeo talks about u.s. policy toward iran after president trump us his decision to withdraw from the iran nuclear deal. followed by a discussion for mutt -- of money input of the campaigns. nominationdering the of the consumer product safety commission. on c-span3, voter out -- voter

outreach efforts with officials. chris for wiley confirmed he is cooperating with the fbi justice department investigation into data. this is about two hours and 45 minutes.

>> thank you to everyone for coming. the facebook matter involving aleksandr kogan and cambridge analytica shed a bright light on the data practices of some of our largest technology companies. although advertisers and political campaigns have collected and used data for years, the public seemed generally unaware. this story has forced both the public and lawmakers to confront serious issues that need to be addressed, including what role congress should play in promoting transparency for consumers regarding data collection and use, while ensuring a well functioning marketplace for our data dependent technology to drive further innovation. we started that conversation with mr. zuckerberg last month. i hope that today we can continue a productive and meaningful debate about these serious policy issues.

unfortunately, events like these more often than not seem to get muddled bipartisanship and efforts to score a quick soundbite. the facebook story first broke december 2015, because "the guardian" identified that dr. kogan had allegedly transferred facebook data to cambridge analytica in violation of facebook's data policies. according to cambridge press releases and a recent internal report in july 2016, facebook requested cambridge and its affiliates to remove any data received from dr. kogan. cambridge said they removed the data and filed legal certification to facebook saying as much. i had requested that cambridge analytica appear at these hearings to explain these facts and tell their side of the story. cambridge, however, recently commenced insolvency proceedings and therefore determined it could not participate in this hearing. the underlying story has not changed much since 2015, except for two important events. first, cambridge began doing work for the trump campaign, and secondly, the trump -- president trump won the 2016 election. these two fax sounded an alarm

that revived the cambridge story. this does not diminish the importance of this discussion, but only highlights extreme partisanship at play, and more importantly, that this conversation could have easily taken place in 2015. in fact, this conversation could have taken place much earlier. advertising agencies and political campaigns have utilized data analytical tools for many years. campaigns, including those of presidential candidates in every election year since at least the 1990's used data to micro target. during the past three presidential elections, these strategies have expanded to social media platforms, specifically, facebook. president obama's campaign developed and app utilizing the same facebook feature that cambridge used to capture the information of not just the app's users, but also millions of their friends.

president obama's app potentially pulled even more information than cambridge's app. a former obama campaign official, carol davidson, recently wrote "facebook was surprised we were able to suck out the whole social graft," in the 2012 election. we could also be talking about more recent events, like buzz feed partnering with multiple democratic and anti-trump super pac's in 2016. in a 2016 interview, buzzfeed's vice president of politics and advocacy says that one of the problems was feed was working with other partners to solve was "how are we going to get women who do not like hillary clinton to vote for her?" that type of voter outreach has not -- is not surprising to many. that's because it happens all the time. similarly, it shouldn't be surprising that president trump's campaign used consultants to help reach voters as well.

regardless of these events and whether such tactics are actually effective, it is clear the use of data across the political spectrum is only increasing, so instead of just treating this as a partisan issue to score political points, the important policy discussion should really have is whether tech, consumer, and congress, where we should go from here. our tech company should have access to some of our more sensitive data. are these companies doing enough to properly disclose their data policies and protect their user date? many of the services offered provide huge benefits to consumers at little to no cost. our consumers blissfully

unaware, or are they making informed choices with respect to how their data is collected and used? in 2015, the sector generated 430 $5 billion in labor income and $192 billion in tax payments. how do we ensure the proper amount of regulation to protect consumers without damaging an industry that is vital to the economy? these are the questions we should be asking. i hope today's hearing will allow us to continue those. sen. feinstein: thank you very much for holding the hearing. in march of this year, a series of articles and videos were published online regarding

cambridge analytica, and its efforts to use personal facebook data of millions of americans to influence united states elections. today, you -- numerous governments, have launched formal investigations into the company including the united kingdom, australia, canada, nigeria, kenya, and india. there is much we do not know about cambridge analytica. there are significant for its already in the public record. we know cambridge analytica was established by robert and rebecca mercer at the urging of former white house steve strategist -- strategist steve bannon. it happened reportedly that the intent of creating an american shall was to give the appearance

of compliance with the united states election law that prohibits foreigners from working on united states elections. according to ceo alexander nix, they worked for 44 united states elections in 2014. in the 2016 election cycle, mr. nix stated that cambridge analytica, "did all the research, all the data, all the analytics, all the targeting." we ran all of the digital campaign, the television campaign, and our data informed all the strategy for the trump campaign. in addition, cambridge analytica obtained detailed personal information on approximately 87 million people from facebook

without their knowledge. the massive data set, which reportedly included approximately 4000 data points on each individual was used by cambridge and a lot of the and fc out -- cambridge analytica and fcl two have voter targeting and an online behavioral influence tool. reportedly, project rib on was a software program that used sophisticated algorithms to allow campaigns to segment voters into groups based on psychological characteristics, such as neurotic or introverted. once individuals were identified and grouped, the platform then provided preselected and focused group tested images and keywords that were most likely to alter the behavior of those individuals. examples of the messages developed and used by cambridge analytic include keywords such as drain the swamp and deep state, as well as images of border walls. in an undercover video, cambridge analytica managing director mark turnbull explained

that cambridge analytica also created the brand "defeat crooked hillary". the company then created hundreds of different online advertisements for that brand, including online videos that were viewed 30 million times. through project rippon, selected images were sent to the relevant individuals through online advertising services like google and facebook. these websites provided feedback on an individual's reactions to those advertisements, which were then fed automatically back into the targeting program. this is what we have learned in the past several months. however, significant questions remain, and there is much we still do not know about cambridge analytica.

we do not know the extent to which it worked with hackers to illegally obtain damaging information on candidates,

including the united states. it was reported in 2015 that cambridge analytica's parent company facilitated the hacking in theft of sensitive medical records from a nigerian presidential candidate and published them online. we do not know whether cambridge analytica used these tactics in the united states, but this

pattern of activity was certainly used by russian intelligence turning the 2016 election. we do not know the extent of cambridge analytica connections to wikileaks and other russian interests. it has been reported that alexander nix contacted wikileaks in june of 2016. mr. nix says this was his only contact with wikileaks, however, his former partner, nigel oates, suggested that cambridge analytica's first contact with julian assange was between 12 and 18 months prior. it has also been reported that other employees at cambridge

analytica had direct connections to mr. assange, including through his former attorney. in 2016, alexander nix also provided white papers and briefings to executives from lukoil, russia's second-largest oil firm, about cambridge analytica's political activities in the u.s. lukoil is currently under united states sanctions, related to the russian government's activities in the ukraine. and in march 2017, lukoil revealed its former information sharing partnership with the russian federal security

service, the successor to the kgb. finally, we still do not know whether the data obtained by cambridge analytica was ever shared with or obtained by a third party. the data was originally obtained through a facebook application developed by a russian born professor named aleksandr kogan. professor kogan maintains a teaching position at st. petersburg university in russia, a state-funded institution, and has traveled frequently back and forth to russia. these are concerning questions, not only for the united states, but for all democracies around the world. based on what we have already learned, there is no question that the future of data privacy will have a significant impact on every aspect of our lives, including our basic constitutional rights. today, we will hear testimony from christopher wylie, who served as a research director at cambridge analytica from june of 2013 until november of 2014. i understand he will be able to

share insight into some of these significant questions based on his first-hand experience, so i very much look forward to hearing from mr. wylie, and i thank you again, mr. chairman, for holding these hearings. -- this hearing. sen. grassley: i will now introduce witnesses. after i do that, i ask you to stand and be sworn in. it was also our intention to come down and shake hands with you and welcome you. i'm sorry that everything was caught up here so we did not mess everything up, but both of us want to thank you for participating, in particular, you, mr. wylie, coming as far as you have to help us with proper testimony. our first witness is dr. adan hirsch, and associate professor at tufts university focusing on american politics. he spent seven years as an assistant professor at yale university. he's a nationally published author and earned a masters in

politics, and a bachelors degree from tufts. next person. besides thanking you, we welcome you to this hearing and hopefully you feel comfortable. i know you have testified elsewhere. christopher wylie is a former director of research at cambridge analytica. mr. wylie worked with president obama's campaign for the canadian liberal party and the united kingdom's liberal democratic hearty for 2013 to 2013 -- 2014, worked at cambridge analytica while also studying for a phd in fashion trending for testing. he also has a degree of law from the london school of economics. lastly, dr. mark jamison is a visiting scholar at american enterprise institute and the director and professor of public utility research center at the

university of florida's warrington college of business. dr. jamison earned a phd in economics from the college of business at the university of florida and a masters and bachelors from kansas state university. would you three? stand, please? would you affirm the testimony you are about to give would be the truth, the whole truth, and nothing but the truth, so help you god? all have affirmed. we will start with professor hirsch, and then mr. whaley, and then dr. jamison. >> distinguished members of the committee, thank you for inviting me here -- sen. grassley: stopped just a minute, we might have to do something with your microphone. talk again and see. >> can you hear me? >> is it ok? >> it makes it appear as though you have a frog in your throat. >> here we have another person coming with another microphone. we have had this happen before, so it's not you.

try and pull it in as close as you can. go ahead. [indiscernible] [laughter] sen. grassley: could you -- ok, we have to turn it on here is what i'm told. >> ok. good? thank you. the controversy surrounding cambridge analytica and facebook has raised a number of serious concerns. foreign interference in u.s. elections, the personal privacy of facebook users, and cambridge analytica's voter targeting strategies.

my expertise is on civic engagement, personal data, and voter targeting, and i hope to be able to answer questions you have in these areas. that need briefly summarize a few points in my written testimony. every election brings exaggerated claims about the effects of related technologies. after an election, there's always a demand to figure out why the winning campaign won, and the latest technology used by the latest campaign is often a good storyline, even if it's false.

campaign consultants also have a business interest in appearing to offer special skills and products, and so they often embellish their roles in the media. cambridge analytica was relatively new to the scene in 2016, and promoted new strategies of targeted voters. from everything i learned about cambridge analytica, i'm skeptical of the idea that the strategies were unusually effective or contributed meaningfully to the election outcome. to understand why, it is useful

to divide a campaign strategy into mobilization and persuasion. globalization and -- involves finding voters and persuading them to vote. persuasion entails finding -- persuading people to your candidate. facebook data or data from other sources doesn't help much. let me explain why. first, persuasion affects decay rapidly. researchers showed that this may change a voters mind for a fleeting moment, but it goes away amidst all the other ads, news, posts, and stimuli accompanying a election season.

it's hard come even with top-notch data to figure out which voters are persuadable. the reason for this is no person is persuadable all the time. persuade ability is not a stable disposition. you might be persuadable now, but not tomorrow, by one kind of message or messenger, but not another. third, persuasion is hard because when you try and figure out who is persuadable, your predictions of who is persuadable are often wrong. they are imperfect. you end up sending targeted messages to the wrong population. for example, campaigns often want to predict the racial identity of a voter. predictions of which voters are black and hispanic are wrong about 25% of the time. when a campaign sends a message targeting to these voters, a quarter of the people receiving the message are mistargeted. if the campaigns get race run,

they will have much more errors in investigating something nuanced like personality or how neurotic you are, which is what facebook and cambridge analytica claim to do. it strikes me as implausible given what we know about the challenges of persuasion and campaigns. no evidence has been produced to suggest its efforts were affected or that it overcame the difficulty of the persuasion i just articulated. despite of my skepticism, there's a lot about how -- what we don't know about how campaigns are using social media to target voters. we don't really know what a line is between ads attempting to persuade voters and ads attempting to manipulate or deceive voters. this anxiety is all the more understandable because facebook has not really taken seriously it's role as a facilitator of news and political communications. in my written testimony, i describe an initiative currently

underway by which independent researchers can measure the effects of facebook ad targeting and sharing. the success of this depends on the commitment by facebook to share data, even and especially in cases that will bring negative press to the company. in raising skepticism about cambridge analytica, i do not mean to suggest there are not serious concerns related to privacy, foreign interference, and the troubling role of social media in transmitting news, information, and fake information. rather, i hope we can focus on the more important of these issues as i have discussed in my written testimony. thank you for your attention to the subject matter and i welcome your questions. >> ok. how is that? mr. chairman, senators, thank you for the opportunity to speak today. cambridge analytica is the canary in the coal mine. we must address the digital echo chambers that are being exploited to algorithmically separate american society. online communities should unite us. data is the new electricity of our digital economy. just like electricity, we cannot escape data. online platforms present users with a false choice, because using the internet is no longer a choice. americans cannot opt out of the 21st century. all revolutions throughout -- require new power structures. american revolution required that citizens are protected from the government. the industrial revolution required protections for workers against conditions in the workplace and environment. so, too, with the digital

revolution must be relies that there is a new game being played and that the rights to life, liberty, and the pursuit of happiness we need to be defended from those who might undermine them using new technologies, whether they are corporations, whether they are nations, or nonstate actors. i have come here today voluntarily as a witness and as a whistleblower. i have already reported these matters to the 30's and it should be made clear i'm not a targeted part of the investigation. i was a director of research at cambridge analytica from mid-2013 to late 2014. fcl group was a british military contractor specially -- cambridge analytica was created to allow fcl to work in the u.s.

cambridge analytica does not have any employed staff and all clients were handled i fcl, although lawyers were weren't -- warned about using foreign citizens, they embed non-us citizens in american campaigns. cambridge analytica offered voter disengagement services in the u.s., and there are internal documents i have seen that make reference to this tactic. my understanding is that this was targeted at african-american voters. when i was at cambridge analytica, i was also made aware of the black ops capacity. i have seen documents relating to instances where the firm sought to procure materials. some of these targets of these special intelligence services

are currently heads of state in various countries. i've also seen internal documents that make reference to the use of specialized intelligence services from former members of israeli and russian state security services. of further concern is cambridge analytica's employment of people closely associated with wikileaks and julian assange. the firm hired two senior staff both of homework -- whom were aides to the lawyer representing julian assange. to be clear, the work of cambridge analytica is not equivalent to traditional marketing. cambridge analytica specialized in disinformation, spreading rumors, and propaganda. for those who claim profiling does not work, even facebook applied for a paint on "determining user personality characteristics from social networking systems." dr. aleksandr kogan was selected to lead the data harvesting operation, and over 80 million

data subjects had their personal data misappropriated. given the scale, this could be one of the largest breaches of facebook data. cambridge analytica contractors also worked on progression political operations in eastern europe, including the suspected russian intelligence agents. they focused on russian expansionism in eastern europe. dr. kogan was working on russian state-funded research programs. in st. petersburg, they were using facebook data for psychological profiling and research social media trolling. cambridge analytica pitched "the interesting work alex kogan has been doing for the russians" to other clients. cambridge analytica was also in close contact with senior executives at lukoil. they presented lukoil with documents outlining experience with former -- foreign disinformation and american data assets. facebook about these schemes since 2015. before the story broke, facebook threatened to sue "the guardian" and banned me for whistleblowing. responding on behalf of the british government, the u.k. secretary of culture called this outrageous because it revealed the unrestrained power technology companies can exercise over ordinary citizens,

when a person's entire online presence can be so quickly eliminated from existence. there's no check on this power, and it raises a serious question for republicans and democrats alike. what happens to our democracy when these companies can delete people at will when they speak out? mark zuckerberg's continual refusal to cooperate with the british inquiry reveals the challenge other countries face to hold companies like facebook to account. the british parliament is considering this after facebook refused and failed to answer 40 questions. the scandal has exposed that social platforms are no longer safe for users. these platforms are a critical part of american cyberspace, and are in desperate need of protection and oversight. and still optimistic about the future of technology, but we and still optimistic about the should not walk into the future blind, and it's the job of

lawmakers to ensure technologies served citizens. and not the other way around. >> members of the committee, thank you for the opportunity to appear before you today. i can summarize my testimony in three sentences. first, using facebook and other social media data in ways that are not transparent to users is not unusual in modern political activity. second, facebook's problems appear to result from a rapidly changing company allowing itself from drifting to forming -- serving developers. third, new regulations are more likely to protect the business from competition than benefit consumers. i will summarize my thoughts on each. the best-known and probably most effective political use of facebook and data analytics are

the national campaigns of president barack obama. these campaigns were uniquely capable at leveraging facebook. facebook cofounder chris he is put together the media strategy for obama's u.s. senate and 2008 campaigns, and the 2012 campaign took things to a new level. they campaigned facebook supporters it and friends through apps. the 2012 campaign tech team was reputed to be a will to exploit facebook capabilities before it even knew those capabilities existed. one outreach program less supporters know that close friends had not voted during an election and encouraged supporters to contact those friends. they required intimate knowledge of facebook friends and the nature of their relationships.

regarding facebook's failings, the companies primary failer is not being clear and candid with users. i distinguish between users, the subscribers, and the customers, who are buying ads and other services. for markets to perform well, users should have company and understandable information on the nature of the services they are using, even those that have zero monetary price, as in the case of facebook. this is not happening. the company has changed howitzers and uses subscribers without ensuring they fully understand. facebook has morphed from a connector of communities to someone that investigates people's lives and filters there facebook communications. the pivotal moment appears to be in 2007 when their growth stalled. from facebook's beginning, adding users was a primary goal. the stall trigger the company to hire a team that, according to some former members, attempted to use psychological

manipulation to enqueue reese -- to increase user time. since then, they have gathered people into a contest where they reveal information about themselves so others can market product and idea. in a sense, facebook users are the products. one of facebook's methods for expanding the reach was a development of newsfeed. newsfeed changed facebook yet again, making it into a discussion monitor, determining who is allowed a voice, and who hears what voices on the platform. facebook shifts appear to be the case of a company allowing itself to drift. each step over the years probably made sense by itself, but taken as a whole, it was a change in who the company is. many businesses have gone down this road.

when things go too far, competition steps in. i will turn my attention to my last point. new regulations are likely to harm facebook users. there are two reasons. one is that the problems are not business problems that commonly occur so new regulations will not help. the second reason is that new regulations would likely serve to protect facebook and other large internet companies from competition. the european union's new general data protection regulation is a case in point. these regulations are driving tech companies, especially small

sen. grassley: thanks to everyone for your testimony. we will go to questions now. five-minute rounds for each individual. i will start with mr. wylie. i think these will be easy questions, but listen while i lead up to them. you joined cambridge analytica group companies in june of 2013, in may of 2014 the group received facebook data from aleksandr kogan. you stopped working for the group in july 2014. in early 2016, facebook contacted the group and yourself and asked that facebook data received from mr. kogan be deleted. in march of 2017 following an internal audit, the group certified it had purged all of mr. kogan's facebook data from its servers. the group was retained by the trump campaign in the summer of 2016, so i think thehr