The Saturday Profile: Long Before Cambridge Analytica, a Belief in the ‘Power of the Subliminal’


Adolf Hitler “didn’t have a problem with the Jews at all, but people didn’t like the Jews,” he told the academic, Emma L. Briant, a senior lecturer in journalism at the University of Essex. He went on to say that Donald Trump had done the same thing by tapping into grievances toward immigrants and Muslims.

This sort of campaign, he continued, did not require bells and whistles from technology or social science.

“What happened with Trump, you can forget all the microtargeting and micro-data and whatever, and come back to some very, very simple things,” he told Dr. Briant. “Trump had the balls, and I mean, really the balls, to say what people wanted to hear.”

Mr. Oakes did not respond to requests for comment. A spokesman for Cambridge Analytica endeavored to distance the company from Mr. Oakes and his comments, saying he “never had any role at Cambridge Analytica, has never worked for Cambridge Analytica and did not work on the Trump campaign in any way whatsoever.”

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Nigel Oakes of SCL Group, the parent company of Cambridge Analytica.

The company said his comments were made “in a personal capacity about the historical use of propaganda to an academic he knew well from her work in the defense sphere.”

The hearings marked a sudden public exposure for Mr. Oakes, an upper-crust Englishman whose air of mystery was also a selling point: From its inception, the central promise of the SCL Group was to shape public opinion without being seen. Dr. Briant, who interviewed Mr. Oakes repeatedly for her book “Propaganda and Counter-Terrorism: Strategies for Global Change,” said she suspected that for Mr. Oakes, the hearings had been a painful experience.

“You need to bear in mind, these are powerful, arrogant men,” she added. “They think they own the world. I honestly think they thought they were invincible.”

As a young man, Mr. Oakes cut a rakish figure. Raised in rural gentility — his father was for a time the high sheriff of Warwickshire — and educated at Eton, he had “a kind of smoothness and charm and charisma that you associate with people who have that kind of education,” his former colleague Barrie Gunter said.

After Eton, instead of continuing on to college, he embarked on a racy career as a disc jockey and music producer and dated Lady Helen Windsor, a cousin of Queen Elizabeth and 40th in line to the throne.

The business idea he brought to the team of psychologists was “Marketing Aromatics,” a service that pumped in fragrances — of pine trees, the ocean, or new-mown grass — on the principle that “smells can influence attitudes and therefore behavior.” Mr. Oakes was “a young man in a hurry,” under pressure to repay his investors, said Professor Gunter, of the department of mass communications at the University of Leicester.

He was also anxious over his lack of a university diploma, pressing the professors to suggest a “short cut” that would save him years of study. “He was what the English would call economical with the truth,” said Mr. Furnham, a professor of psychology at University College London.

They parted ways, the younger man intent on building a company with a strong research component, Professor Gunter said, “designed in such a way that if the client wanted, it could be used to influence the subject and make them do something.”

That company was Strategic Communication Laboratories, and its new targets — procurement officials in the American and British militaries, and politicians in Asia, Africa and the Caribbean — were more responsive. Mr. Oakes was able to leverage his aristocratic background, attracting a list of prominent people, like Jonathan Marland, a member of the British House of Lords and former treasurer of the Conservative Party, as shareholders in his venture. Lord Marland said he was steered by a private equity form to invest around $70,000 in the company, which he said was “set up to give people security and military advice.”

An element of what Mr. Oakes offered his clients was dirty tricks. In 2000, Jeremy Wagstaff, an investigative journalist, encountered Mr. Oakes as an adviser to the president of Indonesia at the time, Abdurrahman Wahid. Mr. Oakes was paid $300,000 in cash for a two-month campaign, Mr. Wagstaff said. It was heavy on optics, featuring “a Tom Clancy-style ops center with lots of screens and people beavering away at computers.”

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Mr. Oakes with Lady Helen Windsor in 1985.

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Mike Forster/ANL, via Shutterstock

“The money was changing hands in U.S. cash in sports bags, so it was a somewhat unusual arrangement,” he said.

Mr. Oakes abruptly left Indonesia after Mr. Wagstaff reported in The Wall Street Journal that he had paid several thousand dollars to a nongovernmental journalist’s organization, falsely claiming it was from the United States Agency for International Development, and that the organization had then put out statements beneficial to Mr. Wahid. Mr. Oakes denied claiming the money came from U.S.A.I.D.

By then, Mr. Oakes was pivoting to counterterrorism, presenting a more sophisticated option for “hearts and minds” campaigns than the blunt propaganda offered by P.R. firms and Madison Avenue, said Dr. Briant.

“This pseudointellectual, academic approach, it looked really good,” she said. “You are creating a situation in which behavior will change. That idea underpins a lot of what they have developed since.”

By 2012, Strategic Communication Laboratories was a trusted partner of Britain’s Ministry of Defense, included on the so-called “X list” of companies “cleared to routine access to U.K. secret information.” It was also providing training for Britain’s 15th Psyops Group, according to documents released this month by Christopher Wylie, a former Cambridge Analytica employee.

When Dr. Briant last met Mr. Oakes for an interview, late last year, he was in an expansive, boastful mood. Mr. Oakes praised Mr. Nix, his younger colleague, for expanding the company’s electoral work swiftly, making it into “a very successful commercial entity.” But he credited himself with the big ideas behind the firm’s work.

“If he’s the Steve Jobs, I’m the Steve Wozniak,” he said, referring to the inventor who built the Apple computer. “I’m the sort of guy who wants to get the engineering right, and he’s the guy who wants to sell the flashy box.”

He rolled his eyes a little at the controversy that had built up around Cambridge Analytica’s advance work for a pro-Brexit campaign, a role which he said Mr. Nix had inflated for commercial reasons.

Yes, the company had been branded as using “pretty unethical ways of achieving their results,” he acknowledged to Dr. Briant. But on the bright side, he said, this was exactly what many clients were looking for.

“People coming to us are not ethical,” he continued. “I mean, frequently people come to us and say we’ve got so many dirty tricks against us, we now need to know the dirty tricks to go back. Or we need to know how to counter the dirty tricks and you guys seem to know how to do it.”

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Inside Cambridge Analytica’s Virtual Currency Plans


The effort was overseen by Cambridge Analytica’s British chief executive, Alexander Nix, who was forced out of the company in March after he was caught on tape bragging about his company’s approach to political work in other countries, including the use of shell companies and strategies designed to entrap opponents. The Facebook data revelations and Mr. Nix’s comments appear to have put the virtual currency work, which was still in the early stages, on hold.

Initial coin offerings, or I.C.O.s, are a method of fund-raising in which companies sell their own virtual currencies. The tokens are generally structured like Bitcoin, using a so-called blockchain to record transactions. The coins are usually designed to be used as an internal payment method in software that the start-ups are building. Over the last year, companies have raised over $6 billion through I.C.O.s.

The New York Times Explains…

Coin offerings generally avoid the regulatory oversight that accompanies traditional fund-raising methods, opening the door for significant fraud. A number of coin offerings have been shut down by law enforcement, and there are several broad investigations of the industry by regulators around the world.

“There are only a handful of more controversial areas it could have expanded its business into,” said Tim Swanson, a consultant to companies in the industry, who was briefed on the Cambridge Analytica coin offering.

A spokesman for Cambridge Analytica did not respond to multiple requests for comment.

Cambridge Analytica began working with coin offerings in the middle of last year. The business was guided by Ms. Kaiser, an American who led the company’s business development and previously appeared at a press event with organizers of the “Brexit” campaign to get Britain out of the European Union.

Cambridge Analytica boasts that its “psychographic profiles” of voters and consumers allow for more persuasive and precisely targeted advertising. In marketing material sent to investors, the firm said Ms. Kaiser was “helping blockchain companies in using predictive modeling to target investors for token sales.”

Jill Carlson, a consultant who has worked with several blockchain companies, attended meetings where Cambridge Analytica pitched its services to virtual currency companies, including one that Mr. Nix attended.

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Wan Kuok-koi, center, a Macau gangster, after his release from prison in 2012. Documents have listed Mr. Wan as a supporter of a Dragon Coin, a digital token promoted by Cambridge Analytica.

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Laurent Fievet/Agence France-Presse — Getty Images

Ms. Carlson said the Cambridge Analytica employees had bragged about their success in helping get President Trump elected and their ability to carefully target advertising campaigns using data from social networks like Facebook.

She also remembers they spoke about an array of potential campaigns. The most unusual idea involved sending virtual currencies to people in far-flung regions of Mexico. The payments would give people incentive to fill out surveys and get data that could then be used to help design campaigns for Mexican political candidates.

Ms. Carlson said the pitch was contrary to the ideas of openness and transparency that drew her to virtual currency projects like Bitcoin.

“The way that Cambridge Analytica was talking about it, they were viewing it as a means of being able to basically inflict government control and private corporate control over individuals, which just takes the whole initial premise of this technology and turns it on its head in this very dystopian way,” she said.

Cambridge Analytica did win over some clients. Last summer, Ms. Kaiser’s team began working with Dragon Coin, a new virtual currency that was designed to be used by gamblers. The coin was supposed to make it easier for people to get their money to casinos in Macau, an island that is technically a part of China with some independent political structures.

Cambridge Analytica had little public role in promoting Dragon Coin. But behind the scenes the company emailed potential partners and investors and arranged for some of them to take all-expenses-paid trips to a glitzy Dragon Coin event in Macau.

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Brittany Kaiser, who guided Cambridge Analytica’s work with initial coin offerings, has been critical of the company since leaving it in February.

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Stefan Wermuth/Reuters

The South China Morning Post published a photo from the event showing Wan Kuok-koi in attendance. Mr. Wan is known as Broken Tooth Koi from his days as the leader of the famous 14K gang in Macau. He was released from prison in 2012 after serving a 14-year term.

The founder of Dragon Coin, Chris Ahmad, told Business Insider at the time that Mr. Wan “is not involved in Dragon, and he is not financing Dragon in any way.”

But documents sent in September to potential investors by Dragon Coin’s co-founder Paul Moynan listed Mr. Wan as the sponsor of the initial coin offering and included his picture. Ms. Kaiser was included in the email. A separate Dragon Coin document that Mr. Moynan sent out at the same time listed Mr. Wan as one of a few high-profile supporters of the project.

When reached recently, Mr. Moynan initially said that his email address had been hacked and that he did not recognize the documents. He later said the documents were a “hypothetical wish list” of a “junior staff” member.

“We will be conducting an internal investigation, as unfinished draft documents would never have been indicative of actual agreed partnerships,” he said.

Ms. Kaiser said that her work on the Dragon Coin event in Macau had been done in a personal capacity, and that the Dragon Coin team had told her that Mr. Wan was not involved with the project.

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The Manhattan location of Cambridge Analytica, a British company. Its virtual currency work, which was still in the early stages, now appears to be on hold.

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Joshua Bright

Dragon Coin claimed it raised over $300 million from investors last fall. That total has been hard to verify. But like many coin offerings, Dragon Coin has failed to live up to its promises.

The document sent to investors in September said Dragon Coin had secured a partnership with Visa to release a debit card that would work on the Visa network. A spokeswoman for Visa said that there was no partnership and that no Dragon card had been approved, as is necessary for a card to be issued.

The documents last summer also said the Dragon app, which would let investors use its virtual coin, would be available in September. When that didn’t happen, the company promised the app in January — but it still has not appeared. In the meantime, the company has spent its money sponsoring a Formula E car racing team and a team climbing Mount Everest.

The setbacks did not stop Cambridge Analytica from plunging further into the virtual currency realm. The company’s New York office continued reaching out to potential investors and partners, emails show. And in January, Ms. Kaiser hosted a side conference dedicated to blockchain projects, known as CryptoHQ, at the World Economic Forum’s annual conference in Davos, Switzerland. Mr. Nix spoke on a panel at the event.

He said that the technology would be helpful in solving the very problems that Cambridge Analytica has since become the emblem of — the abuse of online personal data.

“We’re going to see a new type of economy emerging where people can start to take ownership of their data and monetize on their data,” Mr. Nix said, according to a tweet from the CryptoHQ account. “And that is only possible through the blockchain.”

The virtual currency that Cambridge Analytica was designing was aimed at exactly this problem, and would have also helped the company raise money from investors.

The company wrote a document describing the technical specifications of the coin, Ms. Kaiser said. Her account was confirmed by another person who worked on the project and agreed to speak on the condition of anonymity. The work was overseen by Alexander Tayler, the firm’s chief data scientist and briefly the interim chief executive after Mr. Nix stepped down.

Ms. Kaiser left Cambridge Analytica in February and has been sharply critical of the company since then. As far as she knows, the coin offering has not moved forward. But she is still working on similar concepts at her new consulting firm, Bueno Capital.

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Facebook Fallout Deals Blow to Mercers’ Political Clout


“They’re selling magic in a bottle,” said Matt Braynard, who worked alongside Cambridge on the Trump campaign, for which he served as the director of data and strategy, and now runs Look Ahead America, a group seeking to turn out disaffected rural and blue-collar voters. “And they’re becoming toxic.”

The Mercers have made no public statements about Cambridge Analytica’s troubles. Through a spokeswoman, Ms. Mercer declined to answer questions about her role in Mr. Trump’s circle or the Facebook meeting about Cambridge Analytica.

But the effort by Ms. Mercer’s friend to help mend fences with Facebook hints at both Cambridge’s importance to her family’s political ambitions and the perils posed by Facebook’s ban.

Although a Cambridge spokesman last month downplayed Ms. Mercer’s role at the company — saying she had a “broad business oversight” role and no involvement in its daily operations — she serves on the company’s board and in the past has worked to drum up campaign business for Cambridge, according to Republicans who have worked with or competed against the firm. Former Cambridge employees said she was close to Alexander Nix, the company’s chief executive, who was suspended last month after reports on Cambridge’s harvesting of Facebook data.

Ms. Mercer’s intermediary with Facebook was Matthew Michelsen, a tech entrepreneur and investor based in San Diego, who lists his employer as GothamAlpha, a consulting firm. According to his LinkedIn profile, he has also advised major Silicon Valley companies, including Facebook and Palantir, a data-mining firm and intelligence contractor.

Mr. Michelsen’s meeting came on March 20, the day after Facebook announced that Cambridge had agreed to let it audit the firm’s computer servers. Mr. Michelsen met informally with a Facebook acquaintance who was accompanied by a Facebook lawyer, according to a person briefed on the meeting, and both Cambridge Analytica and the Mercers were discussed. The person discussed the meeting on the condition of anonymity because he was not authorized to speak about it publicly. No immediate actions were taken as a result of Mr. Michelsen’s outreach.

Mr. Michelsen acknowledged in an interview on Thursday that he visited the company but he would not discuss the purpose of the trip, citing nondisclosure agreements Facebook required him to sign. Ms. Mercer declined to say whether she and Mr. Michelsen had discussed the purpose of the meeting or whether he had briefed her on it afterward.

Cambridge also mounted a more formal effort to assuage Facebook, the person said, sending its own lawyers to meet with Facebook on the same day Mr. Michelsen was there. The Cambridge lawyers asked Facebook officials whether the firm could be reinstated on the platform. Mark Zuckerberg, Facebook’s chief executive, acknowledged that meeting in an interview with The Times last month, saying that his company had not decided whether to lift the ban.

A Cambridge spokesman did not respond to requests for comment. In a lengthy public statement on Monday, the company stated that “the vast majority of our business is commercial rather than political, contrary to the way some of the media has portrayed us.”

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Stephen K. Bannon and Kellyanne Conway, White House advisers, with Ms. Mercer at the 2017 inauguration. The firm helped the Trump campaign target voters.

In recent years, the Mercers have become among the most prominent and highly scrutinized political donors in the United States. In the early years of the Obama administration, they began doling out tens of millions of dollars to an eclectic array of conservative groups — many of them outside Washington’s mainline Republican establishment. Mr. Mercer invested $10 million in Breitbart News, the nationalist website, bringing on Mr. Bannon as chairman, while Ms. Mercer joined the boards of leading conservative think tanks.

The Mercers were critical of the Republican Party’s existing data apparatus, which was controlled by the party officials and consultants they hoped to disempower. Mr. Mercer bankrolled Cambridge Analytica in 2014, and Ms. Mercer encouraged candidates and PACs that took the family’s money to also hire the family’s data firm. Early in the 2016 presidential campaign, the Mercers backed Senator Ted Cruz of Texas, putting millions of dollars — and Cambridge Analytica — behind him.

But after Mr. Trump prevailed in the primaries, the Mercers switched candidates. In summer 2016, Ms. Mercer helped orchestrate a shake-up that put Mr. Bannon at the head of the Trump campaign. After Mr. Trump won the presidential election, he attended a costume ball at the Mercer estate on Long Island.

Ms. Mercer secured a slot on his transition team and prime seats at his inauguration. As Mr. Trump took office, she sought to take a leading role in America First Policies, a nonprofit formed to back the president’s agenda. Last spring, Ms. Mercer and her father attended the Time 100 black-tie gala, where she was feted as one of the country’s most influential people.

But her insistence on using Cambridge to provide the Trump group with voter data, and other clashes over strategy, alienated other donors and Trump allies, according to other Republicans. Ms. Mercer formed her own group, Making America Great, and hired Emily Cornell, a Cambridge executive, to run it.

Yet after an initial splash of spending in 2017 to promote Mr. Trump’s policies on environmental deregulation and other issues, Making America Great appears to have gone quiet. Ms. Cornell said she was no longer affiliated with Making America Great and could not comment on the group.

In November, Mr. Mercer stepped down from the helm of Renaissance Technologies, one of the world’s most successful hedge funds, as some investors began expressing dismay over his alliance with Mr. Trump.

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Donald J. Trump arriving for a party at the home of Robert Mercer, one of his biggest campaign donors, in December 2016.

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Evan Vucci/Associated Press

The family is likely to retain significant influence in broader conservative circles thanks to its vast fortune, which finances donations that many political organizations and candidates are eager to accept. The family foundation handed out about $20 million to more than two dozen conservative think tanks, charter school groups, watchdog outfits and other nonprofit organizations in 2016, according to its most recent tax return.

Ms. Mercer remains a trustee of the Heritage Foundation, a prominent Washington think tank that has provided the Trump administration with grist for a range of initiatives. The foreign policy hawk John R. Bolton, whose super PAC the Mercers lavished with cash and whom Ms. Mercer once lobbied the White House to make secretary of state, was recently tapped to become Mr. Trump’s national security adviser.

The family has also donated $4.5 million to Republican candidates and super PACs during the 2018 election cycle, putting the Mercers among the top 20 donors in the country. And the father-daughter duo still inspire fear: Virtually no Republicans were willing to speak on the record about the family’s troubles.

“I would not confuse silence with them being out,” said Dan K. Eberhart, a Colorado drilling-services executive who is active in America First Policies, now the lead pro-Trump political advocacy group. “I think they’re very strategic, and I think they’re quiet folks.”

Any contributions the family gives directly to candidates and super PACs will be disclosed to the Federal Election Commission. But their contributions to ideological nonprofit groups like the Heartland Institute, which disputes the scientific consensus on climate change, may become less visible in the future. In 2016, when the Mercers’ backing of Mr. Trump subjected the family to intense public scrutiny, the Mercer foundation’s largest contribution was to DonorsTrust, an advisory group for conservative givers.

That grant, the Mercer foundation’s first recorded contribution to DonorsTrust, could herald a shift in the family’s philanthropic strategy. DonorsTrust helps wealthy conservatives obtain charitable tax benefits while — if so desired — shielding their giving from public view. The donor records a contribution to DonorsTrust and recommends potential recipients, while grantees receive a donation from DonorsTrust charitable vehicles. In 2016, DonorsTrust disbursed more than $66 million worth of such grants.

“Donor-advised funds offer you any level of privacy you’d like from the receiving organization,” states a promotional pamphlet available from the DonorsTrust website. “A donor can ask the fund provider to share their full name with one favored grantee and keep their identity private from other.” Such privacy can be useful to donors who “may be supporting a sensitive or personal cause that could endanger familial or professional harmony,” according to the pamphlet.

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Alexander Nix, chief executive of Cambridge Analytica, at the Concordia Summit for public-private business partnerships in New York in September. The firm claimed to have developed psychographic profiles that could predict the political leanings of every American adult.

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Bryan Bedder/Getty Images

Such mechanisms, which are legal, are used by many donors on the right and the left. Ms. Mercer declined to answer questions about whether she intended to shift more of her family’s future political philanthropy into intermediaries like DonorsTrust. A 2017 tax return for the Mercer foundation is not yet publicly available.

“Ms. Mercer is a private person,” her spokeswoman said in a statement. “And she does not intend to discuss with the media either the conversations she has with her close friends or her philanthropic and charitable giving.”

Lawson Bader, the president of DonorsTrust, referred questions to the Mercers. “I do not discuss DonorsTrust accounts real or imagined,” he said in an email.

The Facebook scandal has hit just as the Mercers appear to be expanding their business in the world of big data. Public records show that Ms. Mercer, her sister Jennifer and Mr. Nix serve as directors of Emerdata, a British data company formed in August by top executives at Cambridge Analytica and its affiliate, SCL Group, according to British corporate records.

Incorporation documents state that Emerdata specializes in “data processing, hosting and related activities.” An SCL official told Channel 4, a British television station, that Emerdata was established last year to combine SCL and Cambridge under one corporate entity.

Exactly what ambitions the Mercers, who joined the Emerdata board last month, have for the company is unclear. Another Emerdata director, Johnson Ko Chun Shun, is a Hong Kong financier and business partner of Erik Prince — the brother of the education secretary, Betsy DeVos, and founder of the private security firm formerly known as Blackwater. Mr. Ko, who declined to comment, is a substantial shareholder and deputy chairman in Mr. Prince’s Africa-focused logistics company, Frontier Services Group.

Mr. Ko and Mr. Prince have links to the Chinese government: Another major Frontier investor is Citic, a state-owned Chinese financial conglomerate that for decades has employed the sons and daughters of the Communist Party’s elite families.

Emerdata has a second Hong Kong-based director, Peng Cheng. Little public information about Ms. Peng, a British citizen, is available. But a woman with the same name is the chief executive of a publishing and online game company located in the same Hong Kong office tower as Frontier Services. In 2016, Mr. Ko’s brokerage company said it would buy a stake in Ms. Peng’s company, Culturecom.

While in Hong Kong in September to speak at a conference, Mr. Nix told Bloomberg that Cambridge Analytica was looking into China for commercial ventures. “We’ve been scoping this market for about a year,” he said. “We see huge opportunity to bring some of these technologies to advertising and marketing space brands.”

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From Thai Jail, Sex Coaches Say They Want to Trade U.S.-Russia Secrets for Safety


The aluminum tycoon, Oleg V. Deripaska, has close ties with Mr. Putin and with Paul Manafort, President Trump’s former campaign chairman, who has been indicted on money laundering charges by Robert S. Mueller III, the special counsel looking into election interference.

The escort and her seduction coach have been held largely incommunicado since March 5, when reporters for The Times and other news media outlets were kicked out of the detention center for speaking to them. They now face deportation and fear what might happen to them if they are sent home to Russia, where they live, or Belarus, the former Soviet republic where they grew up, which remains firmly within Russia’s influence. (Mr. Kirillov was traveling on a Russian passport.)

Neither of them is accustomed to silence. They and their circle of friends say they make a habit of recording everything they do as they go about their campaign of teaching seduction techniques and trying their skills on strangers, sometimes in public.

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Oleg Deripaska in Moscow in 2017. Ms. Vashukevich says she had an affair with Mr. Deripaska, a close ally of President Vladimir V. Putin, while working as an escort aboard his yacht in 2016.

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Alexei Nikolsky/Russian Presidential Press and Information Office

The two were arrested along with eight others on Feb. 25 when dozens of plainclothes police officers raided a workshop they were conducting for Russian tourists at a hotel in Pattaya, about 70 miles south of Bangkok.

The seminar was aimed mainly at male Russian tourists and offered instruction in how to seduce women. It was not illegal.

The police arrest report says that a “foreign spy” infiltrated the Russian-language seminar and provided the Royal Thai Police with information about the training.

Cellphone messages show that the agent signaled the waiting officers when it was time to raid the Ibis Pattaya Hotel conference room.

The work permit charge is relatively minor, and Mr. Kirillov had been conducting training sessions in Pattaya for years. But high-level officials appeared to take an unusual interest in this case: Six police generals and two colonels had responsibility for the raid, according to the arrest report.

Since the arrests, the government has tried to keep a tight lid on information. Friends said they had not been allowed to visit Ms. Vashukevich and Mr. Kirillov for weeks.

A law enforcement official said the F.B.I. tried to speak with the two but was not successful.

A Thai police spokesman, Lt. Col. Krissana Pattanacharoen, would not comment on whether Russia was behind the arrests, but he said it was not unusual for the police to use foreign operatives.

“Investigations are not one size fits all,” he said. “It depends entirely on the situation.”

Few other police officials have been willing to talk about the case. The American Embassy in Bangkok declined to comment. The Russian Embassy asked that questions be submitted in writing, but did not answer them.

After the pair’s arrest, Mr. Kirillov sent a handwritten letter to the American Embassy in Bangkok asking for asylum for all 10 detainees. (At the time, Heather Nauert, a State Department spokeswoman, dismissed the case as “a pretty bizarre story” and indicated that the embassy had no plans to talk with them.)

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The Russian opposition politician Aleksei A. Navalny included Ms. Vashukevich’s posts in a video in early February in which he made accusations about official corruption.

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Maxim Zmeyev/Agence France-Presse — Getty Images

Financial records show that companies controlled by Mr. Manafort owed millions of dollars to Mr. Deripaska, the aluminum tycoon. During the 2016 race, Mr. Manafort offered to give him private briefings about the campaign, though there is no indication that the tycoon took him up on the offer.

Ms. Vashukevich, who goes by the name Nastya Rybka online and recounts her story in a book, “Who Wants to Seduce a Billionaire,” became an escort under the guidance of Mr. Kirillov, better known as Alex Lesley, who has gained popularity in Russia for his advocacy of sexual freedom.

At the time of the yacht visit, Ms. Vashukevich had shaved six years off her age to pose as 19. She was sent by a Moscow modeling agency to a yacht off Norway along with six other escorts, according to her account.

She said she followed Mr. Kirillov’s instruction to record all her interactions with her target, the yacht’s owner, who turned out to be Mr. Deripaska.

Ms. Vashukevich told The Times in a brief interview last month at the detention center that she had more than 16 hours of recordings from the yacht, including conversations with three visitors who she believes were Americans.

She has called herself the “missing link” in the Russia investigation.

Her posts from 2016 came to prominence only after Aleksei A. Navalny, a Russian opposition leader, included them in a video in early February that made accusations about official corruption. Mr. Navalny also charged that Mr. Deripaska had delivered Mr. Manafort’s campaign reports to the Kremlin.

“Deripaska simply transmits this information to Putin,” Mr. Navalny said. “He’s very close to Putin after all.”

Before traveling to Thailand, Mr. Kirillov grew worried about repercussions from the exposé and asked a childhood friend, Eliot Cooper, to contact United States authorities on his behalf, Mr. Cooper said.

Mr. Cooper, who lives in Canada, said in a telephone interview that he called an F.B.I. hotline in February and proposed trading the recordings for the pair’s safety.

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Sergei E. Prikhodko, a deputy prime minister, left, Prime Minister Dmitri A. Medvedev and Mr. Putin, right, in Moscow in December. Ms. Vashukevich posted photos on Instagram of Mr. Prikhodko and Mr. Deripaska aboard a yacht.

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Alexander Astafyev/Russian Presidential Press and Information Office

He said he had told the hotline agent about one recorded conversation in which Mr. Deripaska and Mr. Prikhodko discussed wanting Mr. Trump to win.

“I explained all of that to the F.B.I.,” he said. “They should have a transcript of everything and a recording of my voice.”

Mr. Cooper said he had never heard back from the agency. The F.B.I. declined to comment.

Mr. Cooper said that Mr. Kirillov had hidden copies and instructed associates to release them if he or Ms. Vashukevich were killed or went missing.

“There is no investigation,” Mr. Cooper said. “The Americans are not interested. They want them to disappear, and Nastya in particular, because she is a living witness.”

By the standards of Pattaya, a city notorious for its adult entertainment, the sex seminar for about 30 Russian tourists was tame.

A hotel spokeswoman, Joyce Ong, said the workshop was run like a “normal corporate seminar,” and she denied earlier reports that the staff had called the police.

None of those arrested were charged with sexual misconduct. Ms. Vashukevich was both Mr. Kirillov’s star pupil and one of the instructors at the seminars.

The chief of Thailand’s Immigration Bureau, Suttipong Wongpin, said his department had restricted the pair’s visitors because letting them talk freely could harm Thailand’s relations with the United States and Russia.

“The detainees,” he said, “will just say whatever they want.”

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Peter Thiel Employee Helped Cambridge Analytica Before It Harvested Data


Cambridge Analytica has found itself confronting a deepening crisis since reports about the firm’s data harvesting were published this month in The New York Times, The Observer of London and The Guardian.

The connections between Palantir and Cambridge Analytica were thrust into the spotlight by Mr. Wylie’s testimony on Tuesday. Both companies are linked to tech-driven billionaires who backed Mr. Trump’s campaign: Cambridge is chiefly owned by Robert Mercer, the computer scientist and hedge fund magnate, while Palantir was co-founded in 2003 by Mr. Thiel, who was an initial investor in Facebook.

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“There were senior Palantir employees that were also working on the Facebook data,” said Christopher Wylie, a Cambridge Analytica co-founder, in testimony before British lawmakers on Tuesday.

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Parliamentary Recording Unit, via Agence France-Presse — Getty Images

The Palantir employee, Alfredas Chmieliauskas, works on business development for the company, according to his LinkedIn page. In an initial statement, Palantir said it had “never had a relationship with Cambridge Analytica, nor have we ever worked on any Cambridge Analytica data.” Later on Tuesday, Palantir revised its account, saying that Mr. Chmieliauskas was not acting on the company’s behalf when he advised Mr. Wylie on the Facebook data.

“We learned today that an employee, in 2013-2014, engaged in an entirely personal capacity with people associated with Cambridge Analytica,” the company said. “We are looking into this and will take the appropriate action.”

The company said it was continuing to investigate but knew of no other employees who took part in the effort. Mr. Wylie told lawmakers that multiple Palantir employees played a role.

Documents and interviews indicate that starting in 2013, Mr. Chmieliauskas began corresponding with Mr. Wylie and a colleague from his Gmail account. At the time, Mr. Wylie and the colleague worked for the British defense and intelligence contractor SCL Group, which formed Cambridge Analytica with Mr. Mercer the next year. The three shared Google documents to brainstorm ideas about using big data to create sophisticated behavioral profiles, a product code-named “Big Daddy.”

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Alfredas Chmieliauskas, a Palantir employee, suggested Cambridge Analytica scientists create an app to scrape Facebook data.

A former intern at SCL — Sophie Schmidt, the daughter of Eric Schmidt, then Google’s executive chairman — urged the company to link up with Palantir, according to Mr. Wylie’s testimony and a June 2013 email viewed by The Times.

“Ever come across Palantir. Amusingly Eric Schmidt’s daughter was an intern with us and is trying to push us towards them?” one SCL employee wrote to a colleague in the email.

Ms. Schmidt did not respond to requests for comment, nor did a spokesman for Cambridge Analytica.

In early 2013, Alexander Nix, an SCL director who became chief executive of Cambridge Analytica, and a Palantir executive discussed working together on election campaigns.

A Palantir spokeswoman acknowledged that the companies had briefly considered working together but said that Palantir declined a partnership, in part because executives there wanted to steer clear of election work. Emails reviewed by The Times indicate that Mr. Nix and Mr. Chmieliauskas sought to revive talks about a formal partnership through early 2014, but Palantir executives again declined.

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Cambridge Analytica is chiefly owned by Robert Mercer, a computer scientist and hedge fund magnate.

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Andrew Toth/Getty Images

In his testimony, Mr. Wylie acknowledged that Palantir and Cambridge Analytica never signed a contract or entered into a formal business relationship. But he said some Palantir employees helped engineer Cambridge’s psychographic models.

“There were Palantir staff who would come into the office and work on the data,” Mr. Wylie told lawmakers. “And we would go and meet with Palantir staff at Palantir.” He did not provide an exact number for the employees or identify them.

Palantir employees were impressed with Cambridge’s backing from Mr. Mercer, one of the world’s richest men, according to messages viewed by The Times. And Cambridge Analytica viewed Palantir’s Silicon Valley ties as a valuable resource for launching and expanding its own business.

In an interview this month with The Times, Mr. Wylie said that Palantir employees were eager to learn more about using Facebook data and psychographics. Those discussions continued through spring 2014, according to Mr. Wylie.

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An app built by Aleksandr Kogan collected data that helped Cambridge Analytica develop voter profiles.

Mr. Wylie said that he and Mr. Nix visited Palantir’s London office on Soho Square. One side was set up like a high-security office, Mr. Wylie said, with separate rooms that could be entered only with particular codes. The other side, he said, was like a tech start-up — “weird inspirational quotes and stuff on the wall and free beer, and there’s a Ping-Pong table.”

Mr. Chmieliauskas continued to communicate with Mr. Wylie’s team in 2014, as the Cambridge employees were locked in protracted negotiations with a researcher at Cambridge University, Michal Kosinski, to obtain Facebook data through an app Mr. Kosinski had built. The data was crucial to efficiently scale up Cambridge’s psychometrics products so they could be used in elections and for corporate clients.

“I had left field idea,” Mr. Chmieliauskas wrote in May 2014. “What about replicating the work of the cambridge prof as a mobile app that connects to facebook?” Reproducing the app, Mr. Chmieliauskas wrote, “could be a valuable leverage negotiating with the guy.”

Those negotiations failed. But Mr. Wylie struck gold with another Cambridge researcher, the Russian-American psychologist Aleksandr Kogan, who built his own personality quiz app for Facebook. Over subsequent months, Dr. Kogan’s work helped Cambridge develop psychological profiles of millions of American voters.

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Op-Ed Columnist: Trump’s High-Tech Dirty Tricksters


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Alexander Nix, head of Cambridge Analytica, at an event in Germany last year.

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Christian Charisius/DPA, via Associated Press

Cambridge Analytica, the shadowy data firm that helped elect Donald Trump, specializes in “psychographic” profiling, which it sells as a sophisticated way to digitally manipulate huge numbers of people on behalf of its clients. But apparently, when you’re trying to win a campaign, prostitutes, bribes and spies work pretty well too.

On Monday, Britain’s Channel 4 News ran an explosive exposé of the embattled company. Going undercover as a potential client, its reporter filmed Cambridge Analytica’s chief executive, Alexander Nix, talking about entrapping his clients’ opponents by sending “very beautiful” Ukranian sex workers to their homes. He spoke of offering bribes to candidates while secretly filming them and putting the footage online, of employing fake IDs and bogus websites. Mark Turnbull, the managing director of Cambridge Analytica Political Global, described how the company “put information into the bloodstream of the internet” and then watched it spread.

This story came two days after a joint investigation by The New York Times and The Observer of London reported that Cambridge Analytica harvested private information from over 50 million Facebook users without their permission. That, The Times wrote, “allowed the company to exploit the private social media activity of a huge swath of the American electorate, developing techniques that underpinned its work on President Trump’s campaign in 2016.”

After days of revelations, there’s still a lot we don’t know about Cambridge Analytica. But we’ve learned that an operation at the heart of Trump’s campaign was ethically nihilistic and quite possibly criminal in ways that even its harshest critics hadn’t suspected. That’s useful information. In weighing the credibility of various accusations made against the president, it’s good to know the depths to which the people around him are willing to sink.

Created in 2013, Cambridge Analytica is an offshoot of the SCL Group, a British company that specialized in disinformation campaigns in the developing world. It’s mostly owned by the Mercer family, billionaire right-wing donors and strong Trump supporters. Before becoming the Trump campaign’s chief executive, Steve Bannon was Cambridge Analytica’s vice president. Trump’s former national security adviser, Michael Flynn, who has since pleaded guilty to lying to the F.B.I., also served as an adviser to the company.

Cambridge Analytica shared office space with Trump’s San Antonio-based digital operation, and took substantial credit for its success. “We are thrilled that our revolutionary approach to data-driven communications played such an integral part in President-elect Donald Trump’s extraordinary win,” Nix said in a Nov. 9, 2016, news release.

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Is Facebook Headed Toward Its Darkest Timeline?: DealBook Briefing


Peter Eavis’s take: Mark Zuckerberg’s unusually powerful position at the company may have played a role:

Through his holding of special voting shares, Mr. Zuckerberg has an especially powerful position at Facebook that might shield him from the normal forces of accountability. C.E.O.s without that protection might do more to tackle a big problem because it more directly threatens their job security.

More on Cambridge Analytica: An undercover investigation by Channel 4 News of Britain captured the firm’s C.E.O., Alexander Nix, suggesting the entrapment of a potential client’s political opponents with women and bribes. Britain’s information commissioner is now seeking a warrant to examine the firm’s data. And Facebook has hired a forensics firm to audit it.

Critics’ corner

• Jeff Goldfarb of Breakingviews writes, “Ten years ago, Zuckerberg hired Sheryl Sandberg to help turn his start-up into a serious corporation. It may be time for more adult supervision.”

• The academic Zeynep Tufekci writes, “This wasn’t informed consent. This was the exploitation of user data and user trust.”

• Cass Sunstein of Bloomberg View writes, “It would be a mistake to take the fiasco as a reason to keep treasure troves of information out of the hands of people who can provide immensely valuable services with it.”

• Dan Gallagher of Heard on the Street writes, “Facebook’s immense scale also has made it virtually impossible for alternatives to catch on. That, in turn, makes abuse of the platform more urgent for lawmakers.”

Public service announcements: How to protect yourself on Facebook. Oxford Analytica, an advisory group, wants you to know it’s not like that. And a little joke for those steeped in the British university system:

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A self-driving Uber car at the scene of a fatal accident in Tempe, Ariz.

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ABC-15, via Associated Press

A death that could set back self-driving cars

Uber has suspended its autonomous vehicle testing in four cities after a car in self-driving mode struck and killed a woman in Tempe, Ariz. Until now, regulators had been increasingly open to testing: Just this month, California said it would start letting self-driving cars operate without anyone behind the wheel. Arizona already had.

The head of Carnegie Mellon’s self-driving car lab has urged a halt to testing, telling Axios, “The technology is not there yet.”

The virtual currencies corner: The White House banned Venezuela’s virtual currency in a new round of sanctions. Morgan Stanley analysts said Bitcoin looked like the dot-com boom and bust, only way faster. How Zug, Switzerland, became a hotbed for digital money. And the Hong Kong and Australia stock exchanges are working to share blockchain information.

The tech flyaround

• Larry Ellison and David Agus, who was Steve Jobs’s doctor, have unveiled a start-up, Sensei, that promises more nutritious food through hydroponic farming. (DealBook)

• Europe’s plans to change how tech companies are taxed could exacerbate tensions with the U.S. (NYT)

• Amazon and Snapchat are chipping away at Google and Facebook’s digital ad duopoly. (The big two are still expected to control well over half the market in 2018.)

• Tech giants ask a lot of Wikipedia — see YouTube’s plans to use its text alongside controversial content — without always giving much back. (NYT)

• Amazon has reportedly considered buying Toys “R” Us stores, for the real estate. (Bloomberg)

• The Israeli historian Yuval Noah Harari worries that tech will transform humanity for the worse within decades. (NYT)

Foreign leaders are still trying to avert a trade war

Expect the White House to impose tariffs on some $60 billion worth of Chinese goods this week over what it says are unfair trade practices. But leaders at the G-20 summit meeting continued to push for free trade. More from Andrea Thomas and Paul Kiernan of the WSJ:

“We must ensure that protectionism doesn’t become the dominant force in the world but that we continue to promote open markets. The prosperity of all of us depends on this,” German Finance Minister Olaf Scholz told reporters Monday.

And some critics say that Mr. Trump is missing the bigger picture, including the U.S.’s trade surplus in services.

The budget corner: Lawmakers are still trying to finalize a $1.3 trillion spending bill ahead of Friday’s deadline. T hey disagree on health care and immigration.

The politics flyaround

• Gary Cohn as C.I.A. director? It was apparently considered. And the White House named Chris Liddell, the former Microsoft and G.M. executive, as deputy chief of staff for policy coordination.

• The White House added Joseph diGenova, a lawyer who argued the F.B.I. was out to get President Trump, to its legal team. Mr. Trump has also mused about whether to fire another lawyer, Ty Cobb, and a third, John Dowd, has considered resigning.

• Exploring why some Democrats voted for a Dodd-Frank rollback. (WaPo)

• The dangers facing the continued boom. (NYT)

• The Kochs urged Mr. Trump to accept the Democrats’ compromise on immigration. (Politico)

• The race to find loopholes in the new tax law. (WaPo)

• How that law may end up taxing sports teams’ player trades. (NYT)

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Katie Paul/Reuters

Alwaleed bin Talal speaks out about his detention

Bloomberg interviewed the Saudi royal shortly after his release from the Ritz-Carlton, where Saudi Arabia detained hundreds of businessmen in the name of an anti-corruption campaign.

Mr. bin Talal wouldn’t comment on the deal for his release, but said that he has “forgiven and forgotten” the process, and continues to talk with Crown Prince Mohammed bin Salman, the cousin who jailed him. More from the interview:

You have to wonder how comfortable CEOs will be investing in Saudi Arabia after seeing the Ritz-Carlton method of dealing with disputes.

They have to decide that. But I can speak on my own behalf, and I can tell you it’s business as usual: We’re going to invest in Saudi Arabia.

Elsewhere in Saudi Arabia: Behind the bromance between Jared Kushner and the crown prince. Aramco looks increasingly likely to postpone an international listing, focusing on an I.P.O. on its home stock market, the WSJ says. And why the kingdom wants to enrich its own uranium.

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Ryan Lowry

Tronc’s chairman resigns ahead of misconduct allegations

Michael Ferro, who is also the media company’s biggest shareholder, stepped down hours before Fortune published an article in which two women accused him of inappropriate advances. Neither worked for him, but both said they had been interacting with him professionally. Mr. Ferro declined to comment on the allegations.

A recap of his tenure: Tribune became “Tronc.” Management opposed a newsroom unionization effort. The company sold its crown jewel, The L.A. Times, after controversies led to the replacement of senior executives.

Weinstein Company news: The troubled film studio finally filed for bankruptcy protection. And New York state is looking into how the Manhattan district attorney handled 2015 assault allegations against Harvey Weinstein.

Elsewhere in misconduct: A loose coalition of Silicon Valley companies like Airbnb, Dropbox and Stitch Fix are pressuring venture capital firms to diversify their ranks. Female employees at Nike circulated a survey about improper conduct by male colleagues. And a former employee of the celebrity chef Mike Isabella sued him for sexual harassment.

The deals flyaround

• The Long-Term Stock Exchange and IEX took a step to spread new standards for I.P.O.s. (DealBook)

• Boeing dropped its objection to Rockwell Collins’s sale to United Technologies. (WSJ)

• Bloom Energy has reportedly restarted its I.P.O. planning. (WSJ)

• Cheddar, the CNBC for the Snapchat generation, has raised $22 million from Raine Ventures, Liberty Global and the C.E.O. of the N.Y.S.E.’s parent company. (WSJ)

Revolving door

• Greenhill & Company has hired Neil Augustine from Rothschild as vice chairman and co-head of its of North American financing advisory & restructuring. (Greenhill)

• Germany has named Jörg Kukies, the co-head of Goldman Sachs’s operations in Germany and Austria, as its deputy finance minister. (FT)

Paul Fishman, the former U.S. attorney for New Jersey, has joined the law firm Arnold & Porter as a partner and the head of its crisis management practice. (Arnold & Porter)

The speed read

• The S.E.C.’s chairman pressed exchanges to end a standoff that has delayed a massive database of stock and options trading. (WSJ)

• David Calhoun, a senior managing director at Blackstone, will give $20 million to Virginia Tech. (Bloomberg)

• Larry Fink finally threw his lot in with the machines. Will BlackRock’s algorithms beat the fund managers? (FT)

• The jewelry chain Claire’s has filed for Chapter 11 bankruptcy protection. (NYT)

• A case being tried before a National Labor Relations Board court could upend McDonald’s franchise business model by letting unions deal directly with the parent company — if it gets to a verdict. (NYT)

• A court fight in London between two Russian billionaires is testing the Kremlin’s patience. (Bloomberg)

• Federal prosecutors are investigating the fast-growing business of cash advances to plaintiffs in personal injury and other lawsuits, according to five lawyers. (NYT)

• British and E.U. negotiators agreed on the terms of a 21-month transition period to keep Britain inside Europe’s economic structures. It depends on a broader agreement on Britain’s withdrawal, which is by no means certain. (NYT)

• White boys who grow up rich are likely to remain that way. That’s not the case for black boys. (NYT)

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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Oracle’s Ellison Unveils Hydroponic Farming Start-Up: DealBook Briefing


Silicon Valley Start-up Plenty raised $200 million from SoftBank’s $100 billion Vision Fund. Bowery Farming, whose vegetables are now sold in a few grocery stores in New York City, has collected money from the likes of Google’s venture arm and General Catalyst.

Sensei is focused more on wellness. While the company ultimately plans to expand into an array of businesses, its initial focus is on hydroponic farming, using software and sensors to monitor growing conditions. (Its first farm is on Lanai, the Hawaiian island of which Mr. Ellison owns roughly 98 percent.)

Sensei’s first batch of crops includes Black Trifele tomatoes and Komatsuna mustard greens, with its yardstick for production being nutrition per acre.

“So far, the conversation in agriculture has been dominated by productivity: How much food can we grow in a square foot. But scale is just part of the equation,” Dr. Agus said in a statement. “To properly nourish the world, we need to consider how nutritious that food is. This is where Sensei is focused.”

Its first customer is Hawaii, which imports the majority of its food. Sensei said that it can provide the state fresh food within 24 hours of harvesting, compared with over a week for imported vegetables.

But the company is also eager to tout its tech bona fides. Its farm runs off solar power provided by Tesla panels. And it claims to use just 10 percent of the water used in traditional farming methods.

“For so long, agriculture has been one of the least digitized industries,” Daniel Gruneberg, Sensei’s president, said in a statement. “Now, we can combine software, sensors and robotics to make giant leaps in sustainable farming and perhaps, more importantly, the quality of our food.”

— Michael de la Merced

Facebook’s slide drags down FANG stocks.

Facebook’s stock had its worst day in about four years.

Shares of the social media giant finished down about 7 percent after the NYT reported that a political data firm with ties to 2016 Trump campaign harvested private information from over 50 million user profiles.

The news reports raised the specter of greater government scrutiny and potential regulatory action toward the technology sector. Already, government officials in the United States, Europe and elsewhere have been demanding tougher oversight of the world’s largest tech companies. That, in turn, could erode the industry’s profits and potentially force some companies to adjust their business models.

Facebook’s stock is now down more than 12 percent from its all-time high hit at the start of February.

“We think this episode is another indication of systemic problems at Facebook,” said Brian Wieser, an analyst at New York-based brokerage Pivotal Research Group.

Facebook’s woes showed signs of spreading, too.

The S.&P. 500 tech sector is the worst performing of the index’s 11 sectors.

Shares of Google-parent Alphabet closed down about 3.2 percent. Amazon fell around 1.7 percent and Apple finished off 1.5 percent.

In all, Monday’s slide wiped more than $80 billion off the market value of Facebook, Amazon, Netflix and Alphabet. Facebook accounted for more than $35 billion of that total. In fact, the company is no longer among the five biggest companies in the S.&P. 500 by market capitalization.

Fund flows added fuel to the selloff. MoneyBeat’s Akane Otani reports that mutual funds and exchange-traded funds tracking U.S. technology stocks posted a record $2.6 billion in net inflows last week, according to data from fund tracker EPFR Global. That put year-to-date inflows at $47.5 billion.

“The record-setting stream of money into stock funds has underlined how much the market has been driven by investor fervor for a handful of popular names, which some say makes stocks vulnerable to sudden reversals.”

Given the outsized role the tech sector has played in the aging bull market, its declines Monday dragged down the broader stock indexes.

The Dow Jones industrial average closed down 336 points, or 1.35 percent, while the S.&P. 500, was off nearly 39 points, or 1.42 percent.

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A senator demanded that Facebook’s founder, Mark Zuckerberg, appear before the Senate Judiciary Committee, and a British lawmaker has called for him to testify in an inquiry into the “Brexit” referendum.

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Jim Wilson/The New York Times

The latest test to Zuckerberg’s leadership.

Is Mark Zuckerberg’s unusually powerful position at Facebook in part to blame for the latest backlash against the company?

The giant social media company is under the spotlight because a political data firm apparently misused information about more than 50 million Facebook users. Facebook is still facing questions about Russia-linked accounts that had significant reach within the United States through the social network. In both cases, Facebook has struggled to show the public that it can get in front of its problems. Information about the Russia-linked accounts came out piecemeal, and Facebook knew as early as 2015 that the political data firm had violated its data policies.

Mr. Zuckerberg at first downplayed concerns about Facebook’s role in the 2016 presidential election (something he later said he regretted). His recent communications contain more high-minded deliberation than hard discussion of the company’s problems and how to deal with them.

These look like the reactions of a leader who thinks he is not going anywhere. Indeed, through his holding of special voting shares, Mr. Zuckerberg has an especially powerful position at Facebook that might shield him from the normal forces of accountability. C.E.O.s without that protection might do more to tackle a big problem because it more directly threatens their job security.

Facebook, of course, has taken steps to address the abuse of its network. It has added hundreds of new employees to help police posts, and it has implemented artificial intelligence technology to spot material that falls afoul of the company’s guidelines. Such initiatives cost money. Mr. Zuckerberg earlier this year said that such initiatives would have a significant impact on Facebook’s profitability. Indeed, there’s a strong argument to make that Mr. Zuckerberg’s protected position will allow the company to press ahead with expensive investments in the face of any shareholder grumbling that may arise.

In the near term, though, it’s hard to envision shareholders applying significant pressure on Facebook to be more responsive to the political and legal risks. They may believe Facebook’s extraordinary profitability – its operating profits are roughly equivalent to 40 percent of its revenue – will help the stock ride what they see as a passing storm.

If governments propose restrictions on using members’ data, Facebook’s business model would be tested. The company’s board, in theory, should press Mr. Zuckerberg for details on how he will deal with such shackles. But prominent board members like Marc L. Andreessen and Peter A. Thiel are skeptical of regulation. Facebook might be tempted to fight back.

Lawmakers may hold the line, however, sensing that the public has real concerns about the company. And if Facebook’s responses look tardy and inadequate, the consequences could be harsh, as the fate of Wells Fargo shows. Mr. Zuckerberg, in his uniquely dominant position, is the one person who can make sure this doesn’t happen.

— Peter Eavis

Lawmakers want answers on Facebook’s latest controversy

Lawmakers in the U.S. and Britain want Mark Zuckerberg to explain how Cambridge Analytica, the political data firm founded by Steve Bannon and Robert Mercer, harvested private information from over 50 million user profiles.

“It’s clear these platforms can’t police themselves,” tweeted Senator Amy Klobuchar, a Democratic member of the Senate Judiciary Committee.

What happened: The NYT and The Observer of London reported how Cambridge had collected data from an outside researcher to better target Facebook users. Christopher Wylie, who oversaw Cambridge’s data collection until 2014, told the NYT of his former company, “For them, this is a war, and it’s all fair.”

Facebook argued that the incident wasn’t a data breach and that Cambridge had committed a violation. But former Federal Trade Commission officials told the WaPo that Facebook may have violated a privacy pact reached with the regulator. (The tech giant is reviewing whether one of its employees had been aware of the data leak.)

More on Cambridge Analytica: Alexander Nix, the company’s chief, is facing scrutiny over business dealings with Russian interests. Mr. Wylie said that one Russian company, the oil giant Lukoil, appeared more interested in political message targeting than commercial uses. And Cambridge is reportedly trying to block the airing of a report by Channel 4, a British television channel, in which reporters went undercover at the firm.

Critic’s corner

Jeffrey Goldfarb of Breakingviews writes:

“Facebook has abjectly failed to grasp the magnitude of its problems. It took Zuckerberg almost a year to apologize for his blithe 2016 comment that fake news posted across his website didn’t influence the U.S. election. In the meantime, there are mounting concerns over its online advertising power, handling of privacy matters and how much tax it pays in Europe. Ten years ago, Zuckerberg hired Sheryl Sandberg to help turn his startup into a serious corporation. It may be time for more adult supervision.”

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A fleet of self-driving Uber cars in 2016. The company said it was was “fully cooperating” with the authorities in Arizona after a pedestrian was struck and killed by a driverless Uber vehicle.

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Gene J. Puskar/Associated Press

A self-driving Uber car kills a pedestrian.

A woman in Tempe, Ariz., has died after being hit by a self-driving car operated by Uber, in what appears to be the first known death of a pedestrian struck by an autonomous vehicle on a public road.

The Uber vehicle was in autonomous mode with a human safety driver at the wheel when it struck the woman, who was crossing the street outside of a crosswalk, the Tempe police said in a statement. The episode happened on Sunday around 10 p.m. The woman was not publicly identified.

Uber said it had suspended testing of its self-driving cars in Tempe, Pittsburgh, San Francisco and Toronto.

“Our hearts go out to the victim’s family. We are fully cooperating with local authorities in their investigation of this incident,” an Uber spokeswoman, Sarah Abboud, said in a statement.

The fatal crash will most likely raise questions about regulations for self-driving cars. Testing of self-driving cars is already underway for vehicles that have a human driver ready to take over if something goes wrong, but states are starting to allow companies to test cars without a person in the driver’s seat. This month, California said that, in April, it would start allowing companies to test autonomous vehicles without anyone behind the wheel.

— Daisuke Wakabayashi

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Michael W. Ferro Jr. stepped down as chairman of the newspaper publisher Tronc after a period of intense scrutiny that included newsroom unrest at The Los Angeles Times.

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David Paul Morris/Bloomberg

Michael Ferro has stepped down as chairman of Tronc.

The newspaper publisher announced Monday that Michael W. Ferro Jr., a Chicago entrepreneur and its biggest shareholder, has stepped down as the company’s chairman. The move came just weeks after Mr. Ferro helped negotiate the sale of Tronc’s crown jewel, The Los Angeles Times.

Justin Dearborn, the company’s chief executive, will replace Mr. Ferro as chairman.

“I am confident that under the leadership of Justin and the rest of the board and management team Tronc will continue to deliver value for investors while executing the plan for digital transformation,” Mr. Ferro said in a statement.

Mr. Ferro will remain an investor in Tronc. But his decision to step down as chairman follows a period of intense public scrutiny.

— Sydney Ember

The LTSE takes a step to make companies think about the long term.

The Long-Term Stock Exchange hoping to popularize long-term thinking as a corporate governance strategy has taken another step toward making its goal a reality.

The start-up disclosed today that it has filed with the Securities and Exchange Commission to let it apply its listing rules to the IEX, the stock exchange famous for wanting to tamp down on high-frequency trading.

The filing — which will commence the public part of the S.E.C.’s rule-making process on the matter — advances the LTSE’s aim of enshrining what it believes are best practices in running companies into corporate charters.

If the S.E.C approves the rule, it means that companies can go public using the LTSE principles, but also have their stocks trade on traditional exchanges like the N.Y.S.E. and the Nasdaq like any other listing. That means these companies can get the liquidity they need along with the corporate governance structure that they want, according to the LTSE’s founder, Eric Ries.

It also formalizes a tie-up between LTSE and IEX, the exchange best known as the subject of Michael Lewis’s “Flash Boys.”

What the principles include

• Letting so-called “citizens,” or investors who plan on sticking with companies for the long term, eventually accumulate more voting power over the years than “tourists” who plan on sticking around for a shorter time.

• Blocking the use of certain kinds of compensation, including short-term bonuses paid to executives based on metrics like reaching a certain milestone for end-of-year earnings

• Banning short-term guidance

• Having long-term investors register their holdings with the company. “The company will know effectively in real time who their long-term investors are,” Mr. Ries said.

• Reporting requirements that include disclosing earnings per share net of buybacks, to provide a more accurate way of measuring how a company is doing without factoring in financial engineering.

The context

• Mr. Ries has spoken of the need to reward long-term investors. “Most of the listing standards are designed to align managers and long-term shareholders,” he told me. “That frees up management to do what’s right.”

• It comes as companies continue to bemoan short-term thinking in the stock markets that has C.E.O.s focused more on meeting a quarter’s targets than longer-term goals.

• LTSE’s goal is to eventually become a stock exchange on which companies list their shares. But for now, it wants to be allowed to create a special kind of listing for IEX that lets companies go public under its principles.

• LTSE also plans to promote itself as serving companies first and foremost and to make money more from listing fees and tools and services for its companies, rather than from trading offerings and data aimed at investors.

The caveat

It’s a long road ahead. Not just for the S.E.C. rule-making process, but also in convincing start-ups to adopt these rules when they go public.

“What we have promised our venture investors is not that this is going to instantly transform the market overnight,” Mr. Ries said.

— Michael de la Merced

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Win Mcnamee/Getty Images

It’s budget time, and Congress is preparing to spend

Friday is the deadline for lawmakers to pass a budget, and they are considering a plan that would cost more than $1 trillion. Expect the deficit to widen to more than $800 billion, as well as a lot of pet projects.

The proposal will probably garner Democratic support, but opposition could come from: a) fiscal conservatives, and b) President Trump (if it includes funding for a New York tunnel project).

In related news: How the tax bill could make your credit card payments more expensive.

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Thomas Donohue, chief executive of the U.S. Chamber of Commerce.

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Alexandre Meneghini/Agence France-Presse — Getty Images

U.S. companies warn the White House on China tariffs

Forty-five trade groups, including the U.S. Chamber of Commerce, urged President Trump not to move forward with sweeping tariffs on Chinese goods.

Here’s what Thomas Donohue, the C.E.O. of the chamber, said:

“The livelihood of America’s consumers, businesses, farmers, and ranchers are at risk if the administration proceeds with this plan.”

Elsewhere in trade: Mr. Trump is requesting authority to unilaterally raise tariffs, power that could undermine the World Trade Organization. And Latin American countries are forging closer commercial ties with each other, and with China.

The political flyaround

• President Trump attacked Robert Mueller’s investigation, using the special counsel’s name in his tweets for the first time and drawing rebukes from some Republican lawmakers. Despite one Trump lawyer’s call for an end to the special counsel’s investigation, another says that there is no plan to fire Mr. Mueller.

• The special counsel is looking into the Trump Organization’s finances. What’s the connection to Russia? (NYT)

• Mr. Mueller’s case against Paul Manafort includes evidence from hard-to-crack jurisdictions like Cyprus and St. Vincent and the Grenadines. (WSJ)

• Attorney General Jeff Sessions fired Andrew McCabe, the F.B.I.’s deputy director. Several Democratic lawmakers offered to hire Mr. McCabe to help him qualify for his government pension. Mr. McCabe says he kept memos on Mr. Trump.

• Senior Trump administration officials were asked to sign nondisclosure agreements about their time in the White House that would extend past Mr. Trump’s tenure.

• Kushner Companies filed false paperwork with New York City to improperly remove tenants in Queens. (A.P.)

• Keep track of who has left the Trump administration. (NYT)

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President Trump with Crown Prince Mohammed bin Salman of Saudi Arabia last year.

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Stephen Crowley/The New York Times

What does the Saudi crown prince want from his U.S. tour?

Crown Prince Mohammed bin Salman will meet with the Trump administration and tour several cities this week. Here are a few things most likely on his agenda:

• Shoring up military and political support for its bombing in Yemen, despite American lawmakers’ concerns about the U.S. role.

• Persuading American businesses to invest in Saudi Arabia as part of his Vision 2030 plan. The crown prince will meet with Apple and Google, among other companies. Also of interest: In an interview on “60 Minutes,” he said that women were “absolutely” equal to men.

Elsewhere in the Middle East: How Saudi Arabia is building a homegrown entertainment industry. The head of the broadcast conglomerate MBC touted his company’s expanding ties to the kingdom — after he was freed from detention. And here’s the fascinating tale of Qatari royalty who were kidnapped while on a falconry hunt.

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Your Spotify must-read

Bill Gurley of Benchmark asked in a tweet storm whether the streaming giant was better off pursuing profitability instead of growth. Mr. Gurley argues no — and points out that the company is now more valuable takeover bait.

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Paul Jacobs, Qualcomm’s former chairman

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Ruben Sprich/Reuters

How realistic is Paul Jacobs’s quest to buy Qualcomm?

The son of the company’s founder wants to take the chip maker private, à la Michael Dell and his eponymous computer empire. But it would be a herculean task. Consider:

• Mr. Jacobs would probably have to pay more than the $117 billion that Broadcom offered.

• He only owns about 1 percent of the company. Mr. Dell owned 14 percent of his.

• He would have to bring in significant equity partners, since there is no way he could finance a takeover with debt alone. But it’s not clear where they might come from (SoftBank has shown little interest so far) and whether any foreign backers could pass a national security review.

Critics’ corner: Shira Ovide of Gadfly writes, “It’s unwise for the company’s former C.E.O. to chase after a dream that can’t possibly come true.” And John Foley of Breakingviews asserts that Qualcomm’s biggest issue is mending fences with Apple.

Elsewhere in deals: Newell Brands revamped its board to settle a fight with Carl Icahn. HNA plans to sell $2.2 billion worth of property across China. CACI has bid $7.2 billion for the tech services contractor CSRA to try to spoil CSRA’s impending sale to General Dynamics.

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Masayoshi Son, the founder of Softbank.

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Toru Hanai/Reuters

The tech flyaround

• SoftBank is considering taking ARM Holdings public again, though it’s not clear when. (FT)

• Dropbox has reached a new low for corporate governance, John Plender of the FT writes. (FT)

• Bitcoin is at $8,353 after another wild weekend. And Mastercard says it would be “very happy to look at” digital money issued by central banks. And Twitter will ban many virtual currency ads.

• Ola, the Indian ride-hailing company, is expanding in Australia and challenging Uber there. (NYT)

• Foreign smugglers are trying to ship advanced American military technologies to China, Russia and other adversaries at rates that outpace the Cold War. (NYT)

• FedEx has found that while robots may take your role, they might not take your job. (NYT)

• Apple is designing and producing its own device displays for the first time, unnamed sources said. (Bloomberg)

• Google wants a cut of the purchases made through user searches. (Reuters)

• Pricing ever-more-popular cybersecurity insurance is difficult. (FT)

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The billionaire investor Steven A. Cohen in 2016.

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Coley Brown for The New York Times

Point72’s president quits amid gender bias accusations

Douglas D. Haynes, who was named as a defendant in a suit that accuses Point72 Asset Management of underpaying women and fostering a hostile work environment, resigned on Friday, the NYT reported. Two sources said the move wasn’t related to the litigation, but it still creates another headache for Steven Cohen’s investment firm as it prepares to become a full-fledged hedge fund.

The misconduct flyaround

• A lawyer for Steve Wynn reported a woman to the F.B.I. after she threatened to go public with allegations of the casino mogul’s misconduct toward her. (WSJ)

• An Alaska Airlines pilot sued the company, alleging she was drugged and raped by another pilot during a layover last year. (NYT)

• James Levine, former music director at the Metropolitan Opera, is suing the company after he was fired following an internal inquiry that said it had found evidence of sexual misconduct. (NYT)

• Few law firms are choosing to include partners in their gender pay gap reporting in Britain, a move that would likely widen the pay gap significantly. (FT)

Revolving door

• Alex Wilmot-Sitwell, the head of Bank of America Merrill Lynch’s European operations, has left amid frustration with Brexit. (FT)

• Ann Gronowski, a professor of pathology at the Washington University School of Medicine, has resigned from Theranos’s board. (FT)

The speed read

• The activist investor Edward Bramson has acquired just over 5 percent of Barclays, increasing pressure on the British bank to turn around its performance. (FT)

• Hillhouse Capital Management is raising a fund that could be the largest ever devoted to the China region, surpassing the $9.3 billion raised by K.K.R. last year. (FT)

• BBL Commodities, one of the biggest energy-focused hedge funds, is looking to raise $1 billion for a new fund that will wager on macroeconomic trends. (WSJ)

• China plans to name Yi Gang, an American-educated economist, to lead its central bank in a move signaling that Beijing will continue an ambitious — and, some say, much needed — financial shake-up to get the country’s debt under control and keep its economy growing. China’s president also handed the reins of the country’s financial system to a close ally, Liu He.

• Blackstone guaranteed Stephen Schwarzman new rewards for his contribution to the firm as a founder when he chooses to retire — and even after his death. (WSJ)

• Christian Bittar, once a star banker for Deutsche Bank, pleaded guilty to conspiring to rig the interest-rate benchmark known as Euribor. (Bloomberg)

• An influential committee of lawmakers in Britain says the country should seek to postpone its exit from the European Union if talks drag on. (NYT)

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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New-York Historical Society Plans ‘Summer of Hamilton’


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Alexander HamiltonCredit Associated Press

Alexander Hamilton already rules Broadway. Now, starting over the July 4 weekend, the nation’s first treasury secretary will also be taking over the New-York Historical Society, which has announced a museumwide “Summer of Hamilton” celebration.

The event, inspired by the runaway success of Lin-Manuel Miranda’s musical “Hamilton,” will feature an exhibition of Hamilton-related artifacts like his desk and life-size statues depicting his duel with Aaron Burr. There will also be important documents from the collection of the historical society and the Gilder Lehrman Institute of American History, including a love letter from Hamilton to his fiancée; the infamous pamphlet in which he admitted to an extramarital affair with Maria Reynolds; the first federal budget printed in his Report on Public Credit; and a letter supporting Thomas Jefferson over Burr in the election of 1800.

There will also be Hamilton-themed group tours, a weeklong Hamilton-themed summer camp for middle-school students, Friday-night screenings of musicals that influenced Mr. Miranda, and even appearances by a living historian dressed as Hamilton.

The “Summer of Hamilton” is not the historical society’s first big bet on the man. “Alexander Hamilton: The Man Who Made Modern America,” a $5 million exhibition mounted in 2004 in partnership with the Gilder Lehrman Institute, drew some 150,000 visitors, according to the society, as well as criticisms from some scholars who thought that the show exaggerated his impact.

Since then, “we never could have expected that Hamilton, the man, would have captured the popular imagination in the way that he has,” Louise Mirrer, the president and chief executive of the historical society, said in a statement. “Now admirers of the Broadway hit and those interested in learning more about one of New York City’s most influential citizens can decide for themselves, as the show says, ‘who lives, who dies, who tells your story.’”

More information is at nyhistory.org/summer-of-hamilton.

Data Firm Tied to Trump Campaign Talked Business With Russians


Lukoil was interested in how data was used to target American voters, according to two former company insiders who said there were at least three meetings with Lukoil executives in London and Turkey. SCL and Lukoil denied that the talks were political in nature, and SCL also said there were no meetings in London.

The contacts took place as Cambridge Analytica was building a roster of Republican political clients in the United States — and harvesting the Facebook profiles of over 50 million users to develop tools it said could analyze voters’ behavior.

Cambridge Analytica also included extensive questions about Russia’s president, Vladimir V. Putin, in surveys it was carrying out in American focus groups in 2014. It is not clear what — or which client — prompted the line of questioning, which asked for views on topics ranging from Mr. Putin’s popularity to Russian expansionism.

On two promotional documents obtained by The New York Times, SCL said it did business in Russia. In both documents, the country is highlighted on world maps that specify the location of SCL clients, with one of the maps noting that the clients were for the firm’s elections division. In a statement, SCL said an employee had done “commercial work” about 25 years ago “for a private company in Russia.”

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President Vladimir V. Putin of Russia, left, meeting with Vagit Alekperov. He is the head of Lukoil, an oil giant that was in talks with Cambridge Analytica employees.

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Mikhail Klimentyev/RIA Novosti/Kremlin, via Reuters

Cambridge Analytica has been a political flash point since its role in the Trump campaign attracted scrutiny after the election. While Mr. Nix’s firm turned over some records to the House Permanent Select Committee on Intelligence during its investigation of Russian interference, Democrats on the committee want a fuller review. “It is imperative to interview a broader range of individuals employed by or linked to Cambridge Analytica,” they said in a report this month.

Asked about the Russian oil company, a spokesman for SCL said that in 2014 the firm’s commercial division “discussed helping Lukoil Turkey better engage with its loyalty-card customers at gas stations.” The spokesman said SCL was not ultimately hired.

Arash Repac, chief executive of Lukoil Eurasia Petrol, offered a different explanation for the talks. He said that a meeting he attended with SCL in Turkey involved a promotional campaign with local soccer teams.

“We needed somebody to guide us with the customer data that we were collecting,” he wrote in response to a question from The Times. “Even though our campaign went ahead, we decided not to cooperate with SCL. No contracts were signed.”

But Christopher Wylie, who helped found Cambridge Analytica and develop the company’s voter-profiling technology, said Lukoil showed interest in how the company used data to tailor messaging to American voters.

“I remember being super confused,” said Mr. Wylie, who took part in one of the Lukoil meetings.

“I kept asking Alexander, ‘Can you explain to me what they want?’” he said, referring to Mr. Nix. “I don’t understand why Lukoil wants to know about political targeting in America.”

“We’re sending them stuff about political targeting — they then come and ask more about political targeting,” Mr. Wylie said, adding that Lukoil “just didn’t seem to be interested” in how the techniques could be used commercially.

Mr. Wylie, a former contractor, left SCL before the talks concluded and could not say what became of the relationship with the oil company. He had a falling out with SCL and tried to set up a rival business. SCL said he had violated a nondisclosure agreement and that his comments were an attempt to hurt the company.

A second person familiar with the discussions backed up Mr. Wylie’s account, but spoke on the condition of anonymity because of a confidentiality agreement.

Though Lukoil is not state-owned, it depends on Kremlin support, and its chief executive, Vagit Alekperov, has met with Mr. Putin on a number of occasions. Reuters reported last year that Lukoil and other companies received instructions from the state energy ministry on providing news stories favorable to Russian leadership.

Mr. Nix, for his part, has long been adamant. “We just don’t have business in Russia,” he told TechCrunch last year. “We have no involvement in Russia, never have done.”

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