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Massive voter database up for sale

Industry Standard

(IDG) -- When members of Congress run for re-election, more than half rely on the services of a small San Francisco firm for critical information about voters in their districts. Aristotle International, founded in 1983 in an office around the corner from the Capitol, caters to senators and representatives by offering access to the names and addresses of 150 million registered voters, the largest such database available.

Now after almost 20 years of serving the political elite, Aristotle hopes to exploit the Internet market. The company has begun to sell its voter database to Web sites that use the information to better target advertisements and e-mail at consumers.

Soon, the voter lists will be offered in a service to verify the age and identity of prospective customers for sites that sell alcohol and other adult products. Aristotle has filed for an initial public offering to boot.

But the notion of Web marketers invading the sanctity of the voting booth could strike a raw nerve among policy makers, potentially making Aristotle's plans to commercialize voter registration lists the latest flash point in the ongoing debate over online privacy. Already 25 states, including California, Georgia and Pennsylvania, prohibit the commercial use of voter registration records.

Despite the looming controversy, Aristotle's database is likely to be highly coveted by advertisers. The company already has signed deals with MatchLogic, a leading player in the banner ad-serving market, and VeriSign (VRSN) , one of the top providers of online identity authentication.

Aristotle has painstakingly assembled its national voter database from hundreds of jurisdictions, each of which has different procedures and fees for accessing its rolls. The database also includes additional information gleaned from sources like driver's license records and commercial marketing lists. Combine all that information and the appeal to advertisers becomes apparent. If, say, 25- year-old Green Party members from Portland, Ore., go online, Aristotle can tell advertisers to show them ads for electric cars or perhaps the collected works of Ralph Nader.

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John Aristotle Phillips, the company's co-founder and CEO, is no stranger to the spotlight. As an undergraduate at Princeton University in the late 1970s, he demonstrated how to design an atomic bomb using information available in public documents. That drew the attention of the CIA, FBI, foreign governments and Hollywood. After getting into the political consulting business, Phillips defended restrictions on the commercial use of voter lists and blew the whistle on firms he said were violating the rules. At the time, he bragged about playing "extreme hardball."

This time around, it may be state election boards that decide to play tough with Phillips.

Current restrictions on the commercial use of voter records could dramatically curtail Aristotle's ambitions to market its database online. "They couldn't do that here," declares Shad Balch, a spokesman for the elections division of the California secretary of state's office. "The rule is you can only use [voter lists] for governmental, political and scholarly purposes."

Possible controversy over the commercial use of voter lists torpedoed the company's previous efforts to combine voter information with e-mail addresses collected by America Online (AOL) and Microsoft. Aristotle now is buying e-mail addresses from MatchLogic, a unit of Excite@Home.

Aristotle executives declined to be interviewed, citing the IPO "quiet period." But in its Securities and Exchange Commission filings, the company concedes the legality of using voter data from states like California remains unknown. "It is likely that some changes or exemptions to the applicable laws may be required," executives stated.

Many states are re-evaluating public records laws, but with an eye toward restricting access to protect individual privacy. Some states that have been most active on the privacy front, like Massachusetts and New York, are ones that currently do not restrict use of voter registration rolls.

In New York, individuals have complained to the state board of elections when they discover marketers using voter lists. "There are no restrictions now," says elections board spokesman Lee Daghlian. "Sometimes when they find out, people get a little upset."

A recent Supreme Court decision will bolster privacy advocates' efforts to restrict the commercial use of voting records. In January, the court upheld a federal law prohibiting states from selling driver's license information without drivers' consent.

California Voter Foundation President Kim Alexander fears that even some election-related uses of voter lists, such as targeting political advertisements at voters online, could deter people from registering to vote. "A lot of voters don't know what's been going on behind the scenes," says Alexander, whose nonpartisan group supports online access to political information. "Once voters begin to realize what's going on, I think more people will become more concerned."

In its deal with MatchLogic, Aristotle will allow MatchLogic to use its voter database to target ads for clients like Procter & Gamble. Aristotle, however, will not provide advertisers with the voters' names or track their movements online.

The venture with VeriSign is in an earlier stage of development. Eventually, Web sites will be able to check the age of visitors by asking for a few pieces of data that will be compared against Aristotle's voter lists. Customers for the service could include sites selling liquor, tobacco or pornography. It's an odd mix with Aristotle's current clients, which include most of this year's presidential candidates and some conservative Republicans lawmakers.

VeriSign executives acknowledge that legal questions in some states must be revolved before the Web authentication service uses voter information. "There certainly are privacy issues that we are very concerned with," says VeriSign executive Ben Golub.

VeriSign is in talks with Web sites selling tobacco and alcohol, but isn't ruling out porn sites as potential customers, according to Golub. That may be good for the bottom line, but it also may be yet another reason for states to stop the commercial exploitation of voter lists. And that would leave Aristotle back where it started: playing to a political audience.




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