ICE says Hootsuite hasn’t formally dropped controversial contract

Vancouver tech company was facing backlash from employees for signing a deal with controversial American law enforcement agency

The U.S. law enforcement agency at the centre of employee backlash at a Vancouver tech company says it hasn’t received notice from Hootsuite Inc. that it’s backing out of its contract.

U.S. Immigrations and Customs Enforcement (ICE) recently awarded a US$500,000 contract for Hootsuite through a third-party vendor.

But multiple employees at the social media management company took to Twitter Inc. (NYSE:TWTR) and Facebook Inc. (Nasdaq:FB) this week to express exasperation at the business arrangement.

CEO Tom Keiser, who joined in July, revealed Thursday (September 24) Hootsuite was backing out of the deal amidst a “divided company.”

“This is not the kind of company I came to lead. I — and the rest of the management team — share the concerns our people have expressed. As a result, we have decided to not proceed with the deal with ICE,” he said in a statement.

But no formal notice of backing out of the contract has been issued to ICE, a spokeswoman tells BIV.

“At this time, ICE has not received formal notification from the contract awardee that the company is unable to meet the contract requirements,” Mary Houtmann said in an email Friday.

“But if true, it’s disappointing that they would not support our workforce that is committed to protecting the homeland; taking gang members, drug traffickers and rapists off the streets; and protecting children from trafficking and exploitation.”

The American law enforcement agency has been the focus of criticism, controversy and outcry the past two years amid Trump administration policies separating migrant parents from their children at the U.S.-Mexican border.

Hootsuite’s products had been tapped to manage ICE’s social media accounts “that help educate the public about the work done every day by our law enforcement officers,” according to Houtmann.

“That we are eagerly accepting money from an organization that is allegedly subjecting its female detainees to forced hysterectomies, that has a documented history of locking children in cages, that tears families apart and destroys lives is devastating and disgusting in a way … that I can’t effectively put into words,” Hootsuite product trainer Sam Anderson tweeted Wednesday, referring to recent media reports of forced procedures.

“Even more heartbreaking is that multiple members of our Mexico City support team have relayed their personal experiences being targeted and harassed by ICE and our leadership team chose to push this deal through anyway.”

Hootsuite has not responded to follow-up inquiries from BIV following Keiser’s Thursday statement and ICE’s Friday email.

The company originally sent a response to BIV Wednesday evening implying it had no involvement with ICE before tweeting the following morning it “has decided not to do business with” ICE.

Keiser followed up with a statement shortly thereafter, confirming the company had indeed previously signed a contract with ICE.

“Although I typically would not make a public statement about our customers and our contracts, in this instance I feel it’s important. Recently our company has had to go through the process of determining whether we would engage in a contract with [ICE]. That sparked a great deal of internal conversation — and the formation of a committee to further that discussion and consider all points of view,” he said.

“Considering the various factors, including our belief in the power of communications and social engagement to break down barriers, and supported by the set of objective guidelines that emerged from that committee, we made the decision to proceed with signing a contract with ICE.”

But he said in the Thursday statement the decision created “broad emotional and passionate reaction” over the previous 24 hours that “spurred additional dialogue.”

Following the dialogue, he said the company decided it wouldn’t do business with ICE.

Data shared on the U.S. government’s official awards management website shows more than US$500,000 in Hootsuite licences were being delivered to ICE via FCN Inc., a Maryland-based provider of technology services.

That contract was signed September 18, 2020.

Keiser, who lists his current location as San Francisco on LinkedIn, is the former chief operating officer of software firm Zendesk Inc.

While Hootsuite had been at the centre of speculation for a possible initial public offering for years, Reuters reported in 2018 the company had engaged Goldman Sachs Group Inc. to inquire about a potential sale.

But the process was abandoned just before Christmas 2018 when Hootsuite determined offers were less than the US$750 million it was aiming for, according to a January 2019 report from The Globe and Mail.

Holmes said in a November 2019 statement to BIV Hootsuite undertook a benchmarking exercise at the beginning of the year and determined that the company “sit[s] very well amongst a number of criteria” for other companies at have gone public in the past year. 

The team found that within the companies examined, the average age was 14 years old, the average valuation is $3.6 billion and the average annual recurring revenue is about $200 million.

Hootsuite was founded in 2008 has about 1,000 employees worldwide.

torton@biv.com

@reporton

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