COLORADO SPRINGS, September 28, 2016 — Reuters Technology News reporters Dan Levine and Deborah M. Todd reported yesterday that U.S. Department of Labor regulators have accused Palantir, a data analytics and security company located in Palo Alto, California, of bias against Asian job applicants.
The lawsuit alleges Palantir routinely eliminated Asian applicants in the resume screening and telephone interview phases, even when they were as qualified as white applicants. Palantir is best known for running data centers for U.S. intelligence and military services. Republican candidate Carly Fiorina made mention of Palantir in a GOP primary debate as a company that could be very helpful in America’s war on terrorism.
According to Reuters, “Privately held Palantir helps government agencies track down terrorists and uncover financial fraud. It raised $880 million in funding late last year, for a $20 billion valuation, and is considered one of Silicon Valley’s most secretive companies.”
Palantir was co-founded by Peter Thiel, co-founder of PayPal and the first outside investor in Facebook, and Joe Lonsdale, two of Silicon Valley’s more influential investors and entrepreneurs. In addition to military and defense applications, Palantir’s technology is also used to analyze large amounts of data from disparate sources.
The technology helps detect insider trading, tracks people and identifies weaknesses in IT infrastructures.
Some say the company is partly backed by In-Q-Tel, the CIA’s investment wing. But Palantir has denied that its Prism software is related to the National Security Agency’s vast and controversial Prism web surveillance system.
Besides being “outed” on national television by Fiorina, the company gained more national attention when Thiel addressed the Republican National Convention in July. The Wall Street Journal’s Beth Reinhard and Rebecca Ballhaus wrote in July,
Silicon Valley billionaire Peter Thiel addressed (the convention) as a lonely representative of two groups that haven’t been friendly to Donald Trump’s campaign: the high-tech industry and the gay community.
Mr. Thiel … was the first person ever at a GOP convention to declare from the stage that he is gay. His peers in the tech industry, meanwhile, are largely backing Democrat Hillary Clinton, and more than 150 tech executives published an open letter to Mr. Trump earlier this month criticizing his campaign.
Thiel’s remarks came in prime time just before Trump’s acceptance of his party’s nomination.
“I am proud to be gay. I am proud to be a Republican,” he said.
According to Reinhard and Ballhaus,
Mr. Thiel cast himself as someone who supports workers ‘who are building new things, from social networks to rocket ships.’ He contrasted the ingenuity of Silicon Valley with the perceived dysfunction and incompetence of the federal government, saying that government technology had declined since the eras of the Manhattan Project and Apollo program.
The inclusion of Mr. Thiel in the closing night program was another sign of Mr. Trump’s efforts to shake up the GOP. Unlike other Republican nominees, the New York businessman has played down his opposition to same-sex marriage and vowed to protect the gay community from attacks after the June mass shootings at an Orlando gay nightclub.
A vocal libertarian, Thiel has a history of backing unusual causes. According to Reinhard, he donated $2 million to a super-PAC backing former Hewlett Packard chief executive Carly Fiorina and secretly spent $10 million to fund a legal campaign against Gawker Media, believing that “the outlet violated the privacy of people who couldn’t easily fight back.”
Also donating to the Committee to Protect Journalists, Thiel and his foundation started a fellowship that provides two-year grants to young people to drop out and pursue ambitious ideas. He also donated $216,000 in 2014 to the Seasteading Institute, an organization seeking to create ocean-borne cities outside the reach of governments.
Speaking to the current lawsuit by U.S. authorities, civil rights counsel for the Labor Department’s Office of Federal Contract Compliance Programs Ian Eliasoph assured reporters Palantir was randomly selected for a review.
But a Breitbart News report characterizes the lawsuit as payback for Thiel’s backing of Donald Trump. “The lawsuit by the Department of Labor, threatens the complete cancellation of every contract Palantir has with the federal government—a penalty worth $340 million, the lawsuit claims, which would end the company.”
Breitbart adds, “The claims in the lawsuit are laughable. The Obama administration alleges that Palantir discriminated against Asians. But it has to admit that Palantir, in fact, hired many Asians—11 out of 25 software engineers, for example.
The government does not even bother to claim that Palantir deliberately excluded Asians. Rather, it argues that since only 44% of Palantir’s software engineers are Asian, but 85% of the applicant pool was Asian, Palantir must, statistically, have discriminated against Asians.”
Palantir denied the allegations in a statement and said it intends to “vigorously defend” against them.
One expert interviewed by the San Jose Mercury News was highly skeptical of the lawsuit’s merits: “This is unusual,” said Buck Gee, a former Cisco executive who studies Asian diversity in Silicon Valley, of the accusations against Palantir. “If it’s true, it would be an anomaly.”
But Gee said Asian employees are less likely to be promoted once they are hired. At Facebook, for example, just 21 percent of the company’s senior leadership staff is Asian.
As for the Palantir lawsuit, Gee is skeptical about the discrimination claims. The complaint leaves out key information, he said, such as what percentage of the company’s overall workforce is Asian. And the Labor Department didn’t explain how it determined which rejected applicants were qualified for the engineering jobs in question.
To see the Labor Department’s actions as revenge seems extreme, but the Obama Administration used the Internal Revenue Service against political opponents, and revenge isn’t an improbable motive for the move against Palantir.
It’s hard-ball season at the highest levels. The government’s attack on a company at the forefront of this country’s war on terror misses the forest for the trees. The weaponization of the Federal Government is a threat to national security.
The Obama Administration’s reputation continues to inform all its actions between now and November 8. But in this case, Palantir’s reputation will probably carry the day.