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Facebook Ran Multi-Year Charm Offensive to Woo State Prosecutors

May 27, 2020, 8:00 AM

Sheryl Sandberg’s schedule was packed as the Facebook Inc. chief operating officer arrived in Portland, Oregon, for a summer forum of state prosecutors who were meeting to talk shop and share ideas with one another.

Sandberg was slated to chat with the state officials about corporate citizenship in the digital age during a private morning session that Facebook had organized at the downtown Hilton Hotel in June 2018. She had a meet-and-greet with Utah’s attorney general, Sean Reyes, who had been considered the year before for the chairmanship of the Federal Trade Commission. Later, in another Facebook-organized meeting, Sandberg and other company managers talked about digital privacy with the state legal chiefs.

Sheryl Sandberg
Photographer: Patrick T. Fallon/Bloomberg

The meetings took place three months after reports that Facebook had allowed the harvesting of personal data of millions of users without their permission, in what became known as the Cambridge Analytica scandal. Federal and state lawmakers were escalating pressure on the company over the data breach as well as its dominance of the social-media market. The FTC and several state attorneys general had opened investigations.

According to emails reviewed by Bloomberg, the sessions with Sandberg during the National Association of Attorneys General summer meeting were just one day in a multi year outreach program aimed at state prosecutors. Hundreds of emails were sent between company executives and state officials from 2017 to 2019, a sample of which were seen by Bloomberg. The emails were obtained through the Freedom of Information Act by the Tech Transparency Project, which is part of the Campaign for Accountability, a political watchdog group.

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The emails show how Facebook went to great lengths to develop friendly relationships with powerful state prosecutors who could use their investigative and enforcement powers in ways that could harm Facebook’s revenue growth. In the end, the company’s charm offensive met with mixed results: Most of those attorneys general are now investigating the company for possible antitrust violations.

Facebook isn’t unique among large companies in establishing contact with state attorneys general, and the Campaign for Accountability doesn’t allege wrongdoing by the social-media giant.

“Attorneys general have massive jurisdiction over businesses and virtually everything they do,” said James Tierney, who served as Maine’s attorney general for a decade. “Every major industry should develop an understanding of attorneys general and reach out to them.”

The state-level campaign played out as the company was also expanding its Washington presence to deal with allegations beyond antitrust and privacy, including that foreign interests had exploited its platform to interfere in elections.

Over the last few years, the company has broken its own federal lobbying records, reconfigured the leadership of its policy shop, and brought Chief Executive Officer Mark Zuckerberg to Washington to woo critics, including for meetings with President Donald Trump, who has accused the company of suppressing right-leaning perspectives.

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The Campaign for Accountability, a nonprofit that has investigated technology companies, politicians and abortion-rights opponents, among others, obtained the emails from the AGs’ offices. Its executive director, Daniel Stevens, declined to name donors to the organization other than to say that they aren’t corporations and include the New Venture Fund, a public-interest philanthropy. Stevens’s group is also part of Freedom From Facebook & Google, an anti-big-tech coalition that counts Public Citizen and the Communications Workers of America as members.

Facebook said the company has longstanding relationships with state AGs to collaborate on initiatives to keep the internet safe. “The country’s attorneys general take online safety seriously and so do we,” said Will Castleberry, Facebook’s vice president of state and local public policy. “That’s why for many years we have taken every measure to help them in protecting people and being the best partners we can be.” Facebook has worked with state prosecutors to promote online safety under a program that dates back to 2013.

A Facebook spokesman said it’s continuing to work with state attorneys general on responding to the spread of Covid-19 and other issues.

Allison Gilmore, the chief communications officer for the AGs’ association, confirmed that Facebook held a meeting at the same Hilton Hotel in June 2018, but said it wasn’t coordinated by the association, which doesn’t accept money from corporations to host events. “It is fairly common for outside organizations to schedule their own meetings adjacent to NAAG events, since more attorneys general are likely to be in attendance and available,” Gilmore said in a statement.

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While state attorneys general are law enforcement officials, they are also politicians and many see the post as a stepping stone to higher office. Corporate lobbyists often donate to their campaigns and schmooze with them at legal conferences, while also pressing their case on state regulatory issues.

The emails show that Facebook offered to produce, distribute and promote public service messages for the state prosecutors. It hosted high-level meetings between the AGs and company executives. It also donated to the state prosecutors’ political campaigns and at times worked through them to craft state laws that might affect the company’s practices.

Attorneys general looking to promote their ideas or accomplishments couldn’t do much better than Facebook’s offer of access to its platform. It has 1.7 billion daily users and can micro-target individuals by location and demographics. An Amazon.com Inc. spokeswoman said the company often works with state AGs on consumer protection issues such as privacy and price gouging, but said she isn’t aware it offers them any advertising discounts. The spokeswoman for the AGs’ association said she isn’t aware of any event hosting or filming of public-service ads by other large tech companies.

Facebook and its employees, including Sandberg, donated more than $237,315 to various attorney general campaigns between 2014 and 2020, according to FollowTheMoney.org, which tracks political contributions at the state and local level. Microsoft Corp. and its employees gave $128,192 to attorneys general, Alphabet Inc.’s Google and its employees gave $120,686 and Amazon gave $43,945 in the same period, according to the campaign finance-tracking group.

Facebook has also given nearly $579,000 to the Democratic and Republican associations of attorneys general between 2014 and 2018, according to the Center for Responsive Politics’ database, which goes up to 2018. Google and Microsoft gave slightly smaller amounts in the same period.

Spokespeople for Microsoft, Google and Amazon declined to comment on their donations.

During the NAAG meeting in Portland, Facebook provided a top official as a speaker, according to the agenda. Erin Egan, Facebook’s chief privacy officer, joined a panel to discuss social media companies’ use of consumer data, along with former Connecticut Attorney General George Jepsen and a lobbyist for a technology trade group.

In the private meeting later that day, in addition to Sandberg, Egan, former general counsel Colin Stretch and Castleberry also planned to be present, according to an email from Castleberry to Reyes, the Utah attorney general. They discussed “the specifics of CA,” an apparent reference to Cambridge Analytica, the political consulting firm with ties to Donald Trump’s 2016 presidential campaign that obtained the Facebook data.

‘Tremendous Corporate Partner’

Alan Crooks, a political consultant for Utah’s attorney general, confirmed that Reyes met with Sandberg at the conference, but said the relationship with Facebook began years before. The social media giant had provided financial backing and expertise to a task force on internet crimes against children that the Utah attorney general and others were involved in. Facebook donated $25,000 to Reyes’s campaigns between 2014 and 2020, according to FollowTheMoney.org. In the same period, Microsoft gave Reyes $9,209, Amazon contributed $5,000 and Google $2,500.

“Facebook has been a tremendous corporate partner” but it doesn’t get any special consideration in return for its help, Reyes said in a statement. “It is no secret that my office and other state AGs are currently investigating Facebook.”

Reyes was potentially a well-placed ally for Facebook. In early 2017, Trump’s transition team included his name on its short list for FTC chairman, where he would have overseen both privacy and antitrust as one of Facebook’s most important regulators. The position went to Joe Simons, its current chairman.

Facebook’s outreach helped it secure a key win in Vermont. In May 2019, an outside lobbyist for Facebook sent an email to Vermont Assistant Attorney General Ryan Kriger and State Representative Michael Marcotte, who were collaborating on the drafting of a new data-privacy bill. The lobbyist asked them to delay a vote on the bill so that Facebook could propose modifications. Kriger and Marcotte agreed to the delay, the emails show.

Marcotte said it’s not unusual for lawmakers to delay a vote to seek input from organizations that have a stake in the outcome. “It was just to make it crystal clear what could be done and what can’t be done,” Marcotte said.

During deliberations on the bill, Facebook asked to add language that ensures that companies could still use students’ information for marketing purposes as long as it wasn’t identifiable, according to Marcotte. While some lawmakers thought the added language was redundant, it eventually made it into a bill that became law in March, Marcotte said.

Vermont Donations

Facebook donated a total of $8,580 to the campaigns of Vermont Attorney General Thomas Donovan between 2014 and 2020, according to FollowTheMoney.org. His office didn’t respond to requests for comment. In the same period, Google gave Donovan $4,000 and Microsoft gave $2,500.

In February 2018, the emails show, Reyes and three other attorneys general encouraged their colleagues to participate in a video urging citizens to report suspected trafficking cases to the National Human Trafficking Hotline.

“Our partners at Facebook are providing the production and distribution of a human trafficking awareness PSA, to be distributed via Facebook users beginning March 30,” the attorneys general wrote. The PSAs were filmed at an NAAG event and developed in conjunction with Thorn, an anti-human trafficking organization founded by actors Ashton Kutcher and Demi Moore.

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At the time, Congress was pushing forward with a measure to narrow liability protections for websites that knowingly facilitate sex trafficking. Tech companies, including Facebook, initially opposed the legislation because it weakened the much-loved Section 230 of the Communications Decency Act, which protects internet platforms from lawsuits over content posted by third parties.

The ads allowed Facebook to show it could fight sex trafficking without having to change the liability shield. But after a barrage of criticism, Facebook changed course and supported the legislation. Trump signed the bill into law in April 2018.

In a January 2017 email, Castleberry thanked Idaho Attorney General Lawrence Wasden’s office for participating in a video that encouraged consumers and organizations to maintain internet privacy and safety practices as part of an industry-backed public awareness campaign. He also sent instructions on how to use a “$3,000 coupon code,” so Wasden could advertise the video to constituents on Facebook without having to pay Facebook’s normal advertising rate. A spokesman confirmed that Wasden participated in the video, but said that his office didn’t use the promotional credit.

Sandberg has donated $4,700 to AG campaigns between 2014 and 2020, according to FollowTheMoney.org. That doesn’t include $5,000 to Letitia James in her successful campaign for New York attorney general in 2018. The money was later returned, and James is now leading an antitrust investigation of Facebook, joined by 46 other AGs.

--With assistance from Ben Brody.

To contact the reporter on this story:
Naomi Nix in Washington at nnix1@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Paula Dwyer, John Harney

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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