Facebook looking for its voice at a ‘watershed moment’

Facebook is fighting to reshape its messaging in Washington as it faces its most dire political crisis ever — a seemingly unstoppable drumbeat of unflattering news stories driven by a prolific whistleblower.

The deluge of bad news, including a surge of embargoed news stories published Monday by publications including POLITICO, comes at a time when the world’s largest social network seems short on vocal defenders in Congress. Its critics on the Hill, meanwhile, are hardening their lines against Facebook, with some Democratic lawmakers refusing to even meet with the company or lobbying groups that support it.

And the company is still searching for an effective answer to the message that one of its former product managers, Frances Haugen, is spreading to governments around the globe, backed by a stockpile of leaked documents that raise questions about the company’s handling of hate speech, political disinformation and other social ills. The mass release of tens of thousands of documents, touching on just about every aspect of Facebook’s business and creating potential risks of legal action, is a daunting predicament for any company to counter.

Haugen’s allies say the revelations she has provided to Congress, financial regulators and the media should bring a long-awaited reckoning for Facebook. The documents include discussions of Facebook’s own research on its impact on the mental well-being of teenage girls, as well as the platform’s failure to stem election-related conspiracy theories before the Jan. 6 assault on the Capitol.

“For Congress, the Justice Department, the FTC, the SEC, state attorneys general, the disclosures of Frances Haugen are a watershed moment,” said early Facebook investor-turned-tech-critic Roger McNamee. “They have removed any excuse for further delay.”

Paul Argenti, a longtime corporate communications expert and a professor at Dartmouth College, said Facebook is “doing a terrible job” navigating the crisis.

“Their approach to communications has been more marketing-oriented and more image-building than trying to be a transparent and stand-up company that people can respect,” Argenti said. “The best strategy when this kind of attack comes your way is, admit that you did something wrong. That would be a good start. They’re in denial mode for everything and anything, it seems.”

Facebook said it has no regrets about the message it’s sending.

“When our work is being mischaracterized, we’re not going to apologize,” spokesperson Andy Stone said Monday. “We’re going to defend our record.”

In a call with investors Monday evening, CEO Mark Zuckerberg said that “what we are seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company.”

For all its political woes, Facebook is still one of the world’s most valuable companies, and announced Monday that it saw a 35 percent year-over-year increase in revenue for the quarter ending Sept. 30, to $29.01 billion. Its stock price rose about 1 percent Monday even before the earnings release, a potential sign that investors see little prospect of serious punishment from Washington.

Message to Congress is ‘not working’

But congressional aides said Facebook’s efforts to dispatch its lobbyists to control the damage since Haugen’s revelations began pouring out aren’t satisfying angry members and their staff in either the House or Senate.

“They’ve tried to ease concerns. They’re making the rounds,” said one Republican House aide who spoke on condition of anonymity to discuss private conversations. “They’re passing around blog posts that are public, trying to either discredit things or prove things wrong — that they take teens’ health on Instagram seriously, that they make sure bad content comes down.”

“It’s not working,” the aide said.

The person pointed out that Facebook has lost the support of even typically business-friendly conservatives like the Senate’s No. 2 Republican, John Thune of South Dakota, who said this month that he’s open to breaking up the social media companies. He was speaking on the sidelines of a hearing where Haugen spent hours addressing a Senate subcommittee while facing no hostile questions.

Senate antitrust subcommittee Chair Amy Klobuchar (D-Minn.) cited Monday’s batch of news stories to renew her accusations that Facebook has been less than forthright with the public or lawmakers.

“There’s a lot to dig through in these papers about how Facebook promotes extremism and hurts our communities,” she tweeted, “but here’s the bottom line: Facebook knew.”

Facebook also isn’t getting much public support from Silicon Valley’s usual allies in Congress, including the California lawmakers who have spent months opposing House antitrust laws aimed at the state’s tech giants.

“I am seriously concerned about and appalled by many of Facebook’s reported actions (and inactions) that threaten democracy, promote misinformation, and endanger the health of young adults,” said Rep. Zoe Lofgren (D-Calif.), who has received large donations from Facebook and other tech companies.

On the other hand, she said she remains concerned that the House bills “either don’t address some of these top modern problems — such as privacy and data abuses, the spread of disinformation and extremist content, and cybersecurity — or would make these problems even worse.”

Instead, Lofgren said she supports “smart and sensible” tech legislation, such as the creation of a new regulatory agency overseeing digital platforms. (Facebook has said it supports such legislation too.)

Facebook braces for more

Haugen herself has proven to be a formidable foe, with a manicured press operation running her communications strategy on both sides of the Atlantic and legal minds advising her every step of the way. On Monday she took her message to London, where she told a committee in Parliament that when Facebook executives “see a conflict of interest between profits and people, they keep choosing profits.”

“Facebook does not have a PR problem,” Bill Burton, a former spokesperson for President Barack Obama who is Haugen’s top public relations representative in the U.S., told POLITICO. “They have a business model problem that not even the best communicators in the world are able to communicate them out of.”

Facebook is bracing itself internally for the media storm to intensify. News reports say the company is preparing a corporate rebrand, complete with a new name to reflect its ambitions in the virtual-reality “metaverse.” Facebook’s vice president of global affairs, Nick Clegg, urged employees in a memo Sunday to “keep our heads held high and do the work we came here to do.”

“We need to steel ourselves for more bad headlines in the coming days, I’m afraid,” he wrote a day before Monday’s scheduled clutch of news stories. He warned that the articles would “contain mischaracterizations of our research, our motives and where our priorities lie.”

But inside Facebook, some employees have been dismayed by the company’s strategies for lessening the damage, according to one worker who spoke on the condition of anonymity because the person is not authorized to speak publicly.

After Haugen appeared before a Senate Commerce subcommittee on Oct. 5, Facebook attempted to pivot the story toward Haugen herself, pointing out that she “worked at the company for less than two years, had no direct reports [and] never attended a decision-point meeting with C-level executives.”

Later, when the company discovered that Haugen’s PR team had established an elaborate effort to share her documents with a consortium of news organizations (including POLITICO), Facebook’s vice president of communications John Pinette attempted to paint the effort as a smear campaign.

“30+ journalists are finishing up a coordinated series of articles based on thousands of pages of leaked documents,” Pinette said in a tweet. “We hear that to get the docs, outlets had to agree to the conditions and a schedule laid down by the PR team that worked on earlier leaked docs.”

That approach drew widespread criticism from journalists and former Facebook employees. They noted that Facebook had just described an embargo — a common method that Facebook, federal agencies and other organizations routinely use for organizing the release of information. (In this case, the news organizations — not Haugen’s PR team — had set the date when the stories would be published.)

“I do think they’ve burnt a lot of bridges,” said Jesse Lehrich, the co-founder of advocacy group Accountable Tech and former Hillary Clinton spokesperson. “At the same time … some of their points would be compelling if they weren’t so full of sh– all the time on everything else. And if they weren’t berating the press for abiding by embargos.”

Pinette’s tweets mostly served to drum up heightened attention toward the news stories.

“Got it,” tweeted Sen. Brian Schatz (D-Hawaii). “Will read. Thanks.”

The company has also insisted that the documents, which Haugen retrieved from Facebook’s internal messaging boards, count as “stolen” — potentially teeing up future legal action against her.

An increasing number of lawmakers’ offices are refusing to meet with Facebook at all, though, particularly after House Speaker Nancy Pelosi instituted that policy last year. (Among other complaints, Pelosi was angered when Facebook declined to take down a video that had been misleadingly edited to make her appear drunk.)

Several Hill aides described a feeling that Facebook’s response — to this and other crises — has been condescending.

“Facebook engages with Congress to make Congress feel stupid — to make it seem like their stuff is so complicated we can never understand this,” said one Democratic congressional aide. And several said they don’t believe Facebook can recover from this moment.

Congress is increasingly bearing down on a number of proposals that could rein in Facebook’s power, including a bill from the chair of the House Energy and Commerce Committee to narrow social media’s legal liability shield and bills to reduce the tech giants’ hold over the market.

Haugen and her team

Haugen has been an unusually polished messenger for the story. She spent months preparing for the leak and started talking to Jeff Horwitz, the Wall Street Journal reporter who broke the initial stories on her disclosures, late last year. She’s offered concrete evidence and data to substantiate what activists have been saying for years to Congress, state attorneys general, policymakers in Europe and the U.S. Securities and Exchange Commission.

She’s backed by a team of politically experienced consultants, including Burton and Larry Lessig, a prominent tech legal scholar who briefly ran for president in 2015. And she is better-resourced than most prominent whistleblowers in recent years — she told the New York Times that she made significant money from an earlier investment in cryptocurrency and has moved to Puerto Rico amid the frenzy over her disclosures.

During her stay in Washington for an Oct. 3 appearance at “60 Minutes,” she stayed at the Fairmont, a luxury hotel, on CBS’ dime, according to one person familiar with the arrangement.

On the other hand, Haugen’s sudden renown has also brought new attention to her own background, as well as the financial support that has helped her wage her fight against the powerful tech titan. Last week, POLITICO reported that eBay founder Pierre Omidyar’s global philanthropic network is handling her media and government relations in Europe and intends to offer more support.

She and her lawyers could also potentially profit from the complaints she has filed with the Securities and Exchange Commission. Whistleblower awards from the SEC can range from 10 to 30 percent of the money collected when the monetary sanctions against the accused company exceed $1 million. (The SEC has not accused Facebook of any wrongdoing.)

In addition, some stirrings of resentment have arisen within the Silicon Valley whistleblower community over the outsized level of attention Haugen has drummed up.

“I’m so happy that she has the support and backing,” said Chelsey Glasson, an ex-Google employee who sued the company for discrimination. “But the truth is that most whistleblowers don’t have those same circumstances.”

“There is a long list of whistleblowers, many from marginalized populations, who came before Frances,” Glasson said. “Frances’ path is not an option for most.” Glasson published a Medium post last week saying she has spent $100,000 of her own money on her case against Google.

Facebook, meanwhile, shows no signs of standing down in the face of the crisis.

“I’m proud of our record navigating the complex tradeoffs,” Zuckerberg said during the earnings call on Monday. “We should want every other company in our industry to make the investment and achieve the results we have.”

“We can’t change the underlying media dynamic,” he added.