What to know about Shadow Inc., the vendor behind Iowa Democrats' caucus app

Shadow Inc. quickly rose to the national political spotlight Tuesday morning.

February 4, 2020, 8:45 PM

As the results of Monday’s first 2020 presidential election contest in Iowa ground to a halt, all eyes turned toward a mysterious digital app developer with an equally opaque name: Shadow Inc.

Shadow Inc. was a small for-profit tech startup contracted by the Iowa Democratic Party to build an app to record and report its caucus results. But it quickly rose to the national political spotlight Tuesday morning when the much anticipated results of the caucuses were delayed after the party found what it described as "inconsistencies" in the reporting of the results partly due to a "coding issue" in the app's reporting system.

Much of what went wrong Monday night and what caused it still remains unclear.

PHOTO: A volunteer holds a Presidential Preference Card before the start of a Democratic caucus at Hoover High School, Feb. 3, 2020, in Des Moines, Iowa.
A volunteer holds a Presidential Preference Card before the start of a Democratic caucus at Hoover High School, Feb. 3, 2020, in Des Moines, Iowa.
Charlie Neibergall/AP

In a series of tweets on Tuesday, Shadow Inc. insisted that the issues with the app "did not affect the underlying caucus results data" and that the company "worked as quickly as possibly overnight to resolve this issue."

"We sincerely regret the delay in the reporting of the results of last night's Iowa caucuses and the uncertainty it has caused to the candidates, their campaigns, and the Democratic caucus-goers," Shadow tweeted. "As the Democratic Party has confirmed, the underlying data and collection process via Shadow's mobile caucus app was sound and accurate but our process to transmit that caucus results data generated via the app to the [Iowa Democratic Party] was not."

A spokesperson at the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency wrote in a statement that "at this time, we have no reporting of any malicious cyber activity."

"We encourage our election partners to build resilience into their planning and execution procedures, to prepare for issues that may come up during election processes," the spokesperson wrote. "The Iowa Democratic Party is the best source for information on Caucuses and we encourage everyone to review their updates and reporting."

DNC Chair Tom Perez in a statement Tuesday evening -- a full 24 hours since the Iowa chaos -- calling for transparency and accountability of what went off the rails Monday night and declaring that the app will not be used anywhere else during the 2020 primaries.

"What happened last night should never happen again," Perez wrote in the statement. "We have staff working around the clock to assist the Iowa Democratic Party to ensure that all votes are counted. It is clear that the app in question did not function adequately. It will not be used in Nevada or anywhere else during the primary election process. The technology vendor must provide absolute transparent accounting of what went wrong."

Shadow Inc. was launched early last year by liberal-leaning nonprofit ACRONYM, which specializes in providing digital services for Democratic campaigns and committees, as part of its efforts to build what it called a "smarter" technological infrastructure for Democratic campaigns and committees.

At the time of Shadow's launch, ACRONYM's CEO Tara McGowan, who was previously a digital producer for Barack Obama's 2012 campaign, wrote on Twitter that Shadow’s capabilities included syncing data between a volunteer management platform and an SMS tool -- saving campaign organizers from manual data entry and reducing the risk for mistakes.

Shadow would allow campaigns to "use the most effective new tools in smarter ways," McGowan tweeted at the time.

PHOTO: In this Feb. 3, 2020, file photo, a precinct secretary and other officials look over documents at a caucus in Des Moines, Iowa.
In this Feb. 3, 2020, file photo, a precinct secretary and other officials look over documents at a caucus in Des Moines, Iowa.
Jonathan Ernst/Reuters, FILE

Shadow's CEO is Gerard Niemira, who was ACRONYM's chief operating officer prior to joining Shadow. He was also previously a Hillary Clinton campaign aide during the 2016 presidential election, according to his Linkedin profile.

And now as questions on Shadow Inc. arise with the failures in the Iowa caucuses, ACRONYM is seeking to distance itself from the app.

In a statement late Monday night posted on Twitter, ACRONYM spokesperson Kyle Tharp wrote that ACRONYM is a "nonprofit organization and not a technology company and that it has not provided any technology to the Iowa Democratic Party." Tharp said Shadow is just one of multiple for-profit companies the group has invested in.

"We are reading confirmed reports of Shadow's work with the Iowa Democratic Party on Twitter, and we, like everyone else, are eagerly awaiting more information from the Iowa Democratic Party with respect to what happened," Tharp added.

ACRONYM has also taken down from its website a blog post penned by Niemira at the time of Shadow's launching, which describes Shadow Inc. as a "technology company that will exist under the ACRONYM umbrella." Niemira further details, "As part of Shadow’s technology suite, ACRONYM will continue to license Groundbase technologies to campaigns and organizations across the progressive movement." It's unclear when exactly the page was taken down.

The Democratic Party had previously declined to release information about its vendors for the early caucuses and the only trace of Shadow's involvement in the Hawkeye State until now has been the party committee's payments to the company totaling $63,183 in November and December for "website development," according to a campaign finance disclosure report.

The House Administration Committee's ranking member Rep. Rodney Davis, R-Ill., wrote in a statement on Tuesday that the Iowa Democratic Party didn't receive any technical assistance available from the Department of Homeland Security to inspect the app before its use.

"Yesterday, we saw a breakdown of the Iowa Democratic Party's technology that could have been easily preventable," Davis wrote. "Not only are there no regulations around this new election technology, but they did not take advantage of the resources of the Department of Homeland Security to check the security and functionality of this new app."

Election security experts told ABC News that while a paper trail should eventually be able to produce accurate results, Monday night's debacle adds to existing concerns over the country’s election system.

"I do think it's a warning to those running our primaries and general election that they must be prepared for system-wide failure," Lawrence Nordern, director of the Election Reform Program at NYU’s Brennan Center for Justice told ABC News.

“It undermines people's trust because people expect that election officials are going to be able to produce winners and do so in a transparent way," professor Richard Hansen, an election law scholar at the University of California, Irvine told ABC News. "They have lost both the transparency and the finality at this point. And it's very worrisome."

PHOTO: Local residents check-in after arriving at an Iowa Democratic caucus at Hoover High School, Feb. 3, 2020, in Des Moines, Iowa.
Local residents check-in after arriving at an Iowa Democratic caucus at Hoover High School, Feb. 3, 2020, in Des Moines, Iowa.
Charlie Neibergall/AP

Last year, the Democratic National Committee rejected Iowa and Nevada's plans to hold "virtual" caucuses citing security concerns, causing the two state parties to scramble together revised plans just months ahead of the early primaries. Security and technological concerns have continued to plague the state parties, but the Democratic Party said it had thoroughly vetted its technology.

The Nevada Democratic Party, which is slated to hold its Democratic caucuses later this month on Feb. 22, had also paid Shadow Inc. $58,000 for "technology services" in August last year, an FEC record shows.

The state’s Democratic Party announced on Tuesday morning that it "will not be employing the same app or vendor used in the Iowa caucus." It's unclear if the decision to not use the same vendor was made before Monday's results.

FEC records show that a number of other campaigns and state committees have also paid the firm, including $42,500 from the campaign of former South Bend, Indiana, Mayor Pete Buttigieg in July for "software rights and subscriptions," FEC records show. The Buttigieg campaign told ABC News the payment was for the vendor's texting services.

The presidential campaigns of former Vice President Joe Biden and New York Sen. Kirsten Gillibrand, as well as state Democratic Party committees in Wisconsin and Texas, hired Shadow for its "fundraising consulting," "text messages" and "software" services earlier last year.

Texas Democratic Party spokesperson Abhi Rahman told ABC News that the party committee only used Shadow for its texting contracts, not for app development or website services.

Because ACRONYM's nonprofit status doesn't require donor disclosure, much of its source of funding is unknown to the public.

But FEC records show that ACRONYM's super PAC, PACRONYM, designed to help Democrats in 2020, is bankrolled by a host of liberal megadonors.

Last year, under the leadership of McGowan, who was also previously the director of strategy with Priorities USA, one of the largest Democratic-aligned outside groups, PACRONYM raised more than $7 million, receiving a series of eight-figure checks from wealthy supporters including financier Seth Klarman and Donald Sussman, as well as $500,000 from Steven Spielberg.

The Iowa Democratic Party has began releasing its caucus results late Tuesday afternoon. With 62% of precincts reporting, former South Bend, Indiana, Mayor Pete Buttigieg had 27% of the vote and Vermont Sen. Bernie Sanders had 25%, according to the Iowa Democratic Party. Massachusetts Sen. Elizabeth Warren had 18%, former Vice President Joe Biden had 16% and Minnesota Sen. Amy Klobuchar had 13% of the vote.

Sen. Mark Warner, D-Va., wrote in a statement Tuesday afternoon that "the continuing chaos in Iowa is illustrative of our overall failure to take sufficient steps to protect the integrity of our election systems."

"We need to look holistically at protecting the security, integrity, and resiliency of election systems – from registration systems, to e-poll books, voting machines, tabulation machines, and election night reporting systems," Warner wrote.

ABC News' Matthew Vann, Fergall Gallagher, Lucien Bruggeman and Ali Dukakis contributed to this report.