The third-party brokers who make millions selling your data to political groups • OpenSecrets

An election worker feeds ballots into a voting machines during an accuracy test at the Miami-Dade Election Department headquarters on October 14, 2020 in Doral, Florida (Photo by Joe Raedle via Getty Images)

As midterm elections ramp up, the barrage of texts, emails and other forms of digital outreach have too. Companies that supply campaigns with mountains of personal data on potential voters are a unique facet of American elections, and campaigns and super PACs spend millions of dollars each cycle for intel on voters they hope to reach.

In 2020, federal campaigns, super PACs and special interest groups paid data brokers over $23 million to access veritable treasure troves of data on millions of Americans. As the 2022 midterm elections gear up, OpenSecrets has already tracked about $6 million in payments to brokers from federal candidates and super PACs.

Increased pressure on state and federal legislators to implement regulations to protect user data and restrict the sale of user information could pose a serious roadblock to political groups relying on data brokers to build their campaigns. Politicians and operatives from across the political spectrum rely on data provided by brokers to craft campaign strategies, a strong disincentive to regulate the tool that could give their campaign an edge in the near-constant race for reelection.

Defining “data brokers”

Several factors suggest the total price politicians and PACs pay third-party brokers for voter data is likely higher than the expenditures analyzed by OpenSecrets.

OpenSecrets used state registration records to compile a list of over 600 brokers then searched for matches in expenditure data drawn from Federal Election Commission filings. Vermont and California are the only two states that require these third-party data brokers to register with their respective secretaries of state, which means brokers operating outside those areas may be excluded from our analysis.

The total money cited only captures spending on “third-party” brokers, companies that collect, group and sell data on people — often without their consent. 

The Vermont law defines a data broker as “a business, or unit or units of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship.”

Our methodology excluded powerhouses such as Meta, the rebranded parent company of Facebook, and Google that are not required to register in Vermont or California because they sell data from users signed up to access services. NGP Van, a private company that sells voter data to the Democratic Party, candidates, and nonprofits, also does not appear on the list, although it received more than $28 million from political groups during the 2020 election. 

Leading the field

During the 2020 election cycle, 37 data brokers raked in at least $23 million. The chart below lays out the top 10 recipients of federal campaign expenditures.

Merkle, Inc. received the most money in 2020 from just two spenders. During the last election, the National Republican Congressional Committee paid Merkle more than $2.5 million and the Republican National Committee paid Merkle almost $3.5 million for data processing services, postage, direct mail and finance consulting.

Merkle does not list its partnership with political committees, but they advertise data solutions with “100% coverage of the US population.” In Merkle’s privacy notice, they post in bold, underlined font “We collect and use personal information from and about you.” 

According to their website, Merkle raked in personal data from browser cookies, web beacons, vendors, business partners (including Amazon, Google and Salesforce), mobile service providers, social media platforms, and “other sources.”

Merkle then packages and sells the data to third parties, including political committees, for a whopping net revenue of $1.3 billion per year in the broader broker market.

While some of the largest recipients of campaign expenditures sell data to more clients than just campaigns, brokers including Grassroots Analytics, i360 and Catalist specialize in campaign strategy and have emerged as powerhouses fueling modern election efforts.

Grassroots Analytics, a left-leaning digital strategy group, received more than $2.1 million from campaigns in 2020. The company claims to have a database of “20+ million left-leaning American donors with disposable income,” and they have offered “hyper-targeted and personalized lists” to over 1,000 campaigns. 

In January 2022, the Democratic National Committee paid Grassroots Analytics $500,000 for “online fundraising-acquisition” ahead of the midterm elections. 314 Action Fund, a committee dedicated to getting more STEM professionals into office, has already spent $146,000 on “digital list acquisition” this cycle. 

Holly McCormack, a Democratic candidate challenging Rep. Marjorie Taylor Greene (R-Ga.) in Georgia’s 14th Congressional District, paid Grassroots Analytics more than any other candidate this cycle. McCormack’s campaign spent just under $400,000 of the $1.6 million her campaign has raised for texting data from Grassroots Analytics.

Right-leaning firm i360, a self-described “comprehensive data resource of all voting Americans,” received more than $3.3 million during the 2020 election cycle. The firm claims to have 1,800 data points on more than 270 million Americans, massive databases that campaigns, political organizations and advocacy groups can wield to target potential voters or contributors who never opted in. 

The National Rifle Association alone paid more than $1 million to access i360 data for phone banks and “Peer2Peer” text messages in 2020, a massive increase from just $21,694 in 2018. 

Wesley Hunt, a Republican candidate running for the U.S. House seat in Texas’ 38th Congressional District, has spent more than other candidates to access i360’s data. This cycle, he paid $32,315 for subscription database services.

Grassroots Analytics, i360 and Merkle did not respond to OpenSecrets’ request for comment prior to publication.

Selling your personal data… for what?

More money does not necessarily mean more victories, however, as OpenSecrets found low money-to-win rates for candidates that spent money on data brokers. The efficiency rate is calculated by dividing the sum of money winning candidates paid to data brokers by the total amount brokers received from campaigns. The ratio does not include PAC or committee expenditures. 

Of the 281 federal campaigns that have hired Grassroots Analytics since the 2018 election cycle, the efficiency ratio was only 9%. i360 fared better, with a money-to-win ratio of 38% for 396 federal candidates since 2012.

Low efficiency scores have not stopped Grassroots Analytics from leveraging personal data to continue to grow their business, expanding to nonprofits. As CEO Dan Hogenkamp told Technically in 2020, Grassroots Analytics doesn’t just use these numbers to nudge voters to contribute money or vote for a specific candidate. “We pivoted away from just campaigns and realized, ‘Oh, this progressive consumer database can be used by any sort of socially responsible organization or company,’” Hogenkamp explained.

Justin Sherman, a fellow and research lead at the Data Brokerage Project at Duke University’s Sanford School of Public Policy recently testified before the U.S. Senate Committee on Finance. He talked about the threat data brokers pose to privacy and national security and is skeptical of embracing data brokers as a tool for social advocacy. 

He also does not believe efficiency should even be part of a conversation defined by privacy. Politicians are still buying data that individuals did not consent to give to micro-target potential voters, and they are just part of a larger, highly lucrative data brokerage ecosystem.

“The reality is, even if you agree with the cause, that does not eliminate the privacy concerns,” Sherman said.

Regulating the data broker industry

The FEC’s own regulations reflect the tension between privacy concerns and monetizing massive troves of personal data. The Federal Election Campaign Act of 1972 “prohibits the sale or use of any information about those donors, including their names and addresses, for the purpose of soliciting contributions or for commercial purposes” to protect the privacy of donors. 

In a May 2021 advisory opinion, the FEC did prohibit a vendor, Tally Up, LLC, from aggregating individual contributor data for profit. The firm proposed using contributor data to build a Voter Segment Score that would allow them to use variables like age, zip code, and other demographic data to build customized lists they could then sell to candidates and campaigns.

There is currently no federal law regulating the data broker industry. Sen. Bill Cassidy (R-La.) introduced the Data Elimination and Limiting Extensive Tracking and Exchange Act earlier this year with Sen. Jon Ossoff (D-Ga.), which would allow the Federal Trade Commission to establish a portal for individuals to submit a one-time request to opt out of data broker collection. Under the DELETE Act, data brokers must then delete the personal information and data within 31 days.

Neither Cassidy nor Ossoff’s campaigns purchased data from third-party brokers analyzed here.

But with data brokers playing such a leading role in how most candidates shape their campaign strategies, it remains to be seen what, if any, regulations politicians are willing to place on these companies and the data they sell.

April 21, 2022: This article was updated for clarity.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.