In the 2014 midterm elections and the Trump campaign, firm was staffed mainly by young Britons and Canadians

This article is more than 2 years old

This article is more than 2 years old

Cambridge Analytica employed non-American citizens to work on US election campaigns in apparent violation of federal law, despite receiving a legal warning about the risks.

The company’s responsibilities under US law were laid out in a lawyer’s memo to the company’s vice-president, Steve Bannon, British CEO Alexander Nix and Rebekah Mercer, daughter of billionaire owner Robert Mercer, in July 2014. It made it clear that most senior and mid-level positions involving strategy, planning, fundraising or campaigning needed to be filled by US citizens.

“Any decision maker must be a US citizen or green card holder,” the memo, seen by the Observer, warned. It also provided a brief legal history of cases involving foreign involvement in election campaigns, drawn up by a lawyer at the firm founded by former New York mayor Rudy Giuliani.

“To the extent you are aware of foreign nationals providing services, including polling and marketing, it would appear that unless it is being done through US citizens, or foreign nationals with green cards, the activity would violate the law.”

Facebook Twitter Pinterest Steve Bannon, Cambridge Analytica’s vice-president, in Rome. Photograph: Tony Gentile/Reuters

It was clear that as a company largely run and staffed by Britons and Canadians, apart from Bannon and Mercer at the top, Cambridge Analytica – which was to go on to work on Donald’s Trump presidential election campaign – had a looming problem.

“The prohibition against foreign nationals managing campaigns, including making direct or indirect decisions regarding the expenditure of campaign dollars, will have a significant impact on how Cambridge hires staff and operates in the short term,” the memo stated.

It specifically called for Nix to step down from work on US elections. “In order for Cambridge to engage in such activities, Mr Nix would first have to be recused from substantive management of any such clients involved in US elections,” it said.

Employees working for Cambridge Analytica in the US at the time claimed that rather than tackling the problem, management appeared to ignore it.

“Mercer’s lawyer told a fairly stunned group meeting that it wasn’t allowed,” said one non-American employee who was based in the US at the time. “I’m not sure what, if anything, CA did to act on that knowledge.”

Two employees confirmed that they were still answering ultimately to Nix throughout the mid-term election campaigns that ended in November 2014. In total, more than a dozen foreigners, including Britons and Canadians, filled strategic roles in campaigns across the US.

“We were really speaking directly to the voters in a number of states,” said one former employee, who served on a team with several people who were not US citizens or green card holders.

It is understood that some were working on tourist visas. Another ex-employee claimed that they had been provided with letters to give to US border control officials where needed, stating that they would not be working there.

Facebook Twitter Pinterest Robert Mercer, the owner of Cambridge Analytica. Photograph: The Washington Post/Getty Images

“One colleague kept raising these issues, so they gave us a piece of paper to give to immigration to say we weren’t actually working,” the second former employee said. They added that the company appeared to have taken advantage of its mostly young workforce. “It was getting a chance to travel, and to work on campaigns. Having a lot of autonomy, an adventure. When you are young and get that sort of opportunity, you take it rather than thinking about the details or consequences.”

There were no briefings on the kind of work that non-US citizens should avoid, or warnings about the legal risks. “CA was sloppy and didn’t care about its staff,” said the first employee.

Cambridge Analytica said that the company “adheres to FEC [Federal Election Commission] regulations” and that Nix had never been in charge of work on any US election campaigns.

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“He has never had a strategic or operational role on any election campaigns undertaken in the US,” a spokesman said, adding that “all CA personnel in strategic roles were US nationals or green card holders and these strategic roles provided all direction to non-strategic personnel”.

The legal memo also warned Cambridge Analytica that it needed to carefully hide behind a firewall any work it did in a single state or election for a particular candidate and for any of the so-called super-PACs (political action committees) supporting the campaign.

These committees can spend unlimited funds but cannot coordinate with individual candidates.

Levy warned that the company would need “to separate working teams that are engaged in substantive work for two or more entities that are not permitted to coordinate their activities”.

The nonpartisan Campaign Legal Center, which represents the public interest, has accused Cambridge Analytica over allegations of illegal coordination of this nature.

It has filed evidence with the FEC alleging that the super-PAC Make America Number 1 made illegal contributions to Trump’s campaign, “engaging in unlawful coordinated spending by using the common vendor Cambridge Analytica”.

Cambridge Analytica denied there had been any illegal coordination, saying it had a firewall policy in place, signed by all staff and strictly enforced.

“Where firewalls exist staff are physically separated; use separate databases and servers; and are prevented from communicating with each other,” a spokesman said.

“The accusations of the Campaign Legal Center are based on conjecture, tabloid stories, and hearsay that attempted to mischaracterise FEC filings where Cambridge Analytica publicly declared our non-coordinated work for different entities.”

Bannon, Mercer and Nix did not respond to requests for comment on the legal memo or their operating structure during the 2016 presidential election.