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Peter Thiel appearing on "Fox and Friends" in 2019. Photo: John Lamparski/Getty Images

Silicon Valley was abuzz Tuesday after a Wall Street Journal report that Peter Thiel, the tech industry's most prominent Trump supporter, is also a key architect and promoter of Facebook's anything-goes political ad policy.

Why it matters: The report was seized on by Facebook critics who have argued that the ad policy, which exempts candidates' ads and speeches from the site's fact-checking policies, skews pro-Trump. It also highlighted Thiel's role as the key intermediary between Facebook headquarters and the White House.

Driving the news: As Facebook's leadership has debated internally whether to bow to public pressure over the political ad rules, Thiel —who was Facebook's first outside investor in 2004 and has sat on the company's board since 2005 — has advised CEO Mark Zuckerberg to stand fast.

  • Facebook's service became fertile ground for the spread of misinformation in 2016 that, Trump opponents have argued, helped the GOP nominee win that election.
  • Some experts now say that the political ad policy, which has allowed the Trump campaign to purchase ads that make false statements about Democratic candidate Joe Biden, will sets the social network up for a repeat performance in 2020.
  • Zuckerberg has argued that Facebook should not be in the position of regulating political speech.

The big picture: Since 2016, Thiel — a billionaire who made his first fortune at Paypal and co-founded the national-security data mining firm Palantir — has been building bridges between Trump and Facebook.

  • In a speech at the GOP convention in Cleveland in July 2016, Thiel argued that Washington was broken, Democrats were "incompetent," and the U.S. needs a "builder" like Trump to fix it.
  • Thiel served on Trump's transition team and helped organize the president-elect's first meeting with tech execs in 2016, where he sat next to Trump. COO Sheryl Sandberg represented Facebook.
  • Michael Kratsios, who previously served as chief of staff at Thiel's investment fund, joined the Trump team in 2016 and now serves as U.S. Chief Technology Officer.

In 2018, reports surfaced that Thiel had cooled on the president, and that he now viewed the Trump administration as "incompetent," too.

  • But the relationship still appears to be close enough that, when Zuckerberg testified before Congress this past October, Thiel arranged a dinner meeting for himself, the CEO and the president.

Between the lines: Thiel courts controversy and relishes contrarianism.

  • He is a conservative in an industry whose workforce leans progressive and a climate skeptic in a science-driven field.
  • Earlier this year he fired off heated and largely unsubstantiated charges that Facebook competitor Google had been "infiltrated by Chinese intelligence."
  • When the New York Times' Maureen Dowd pointed out to him in a 2017 interview that the Obama administration went eight years without ethics lapses, Thiel replied, "“But there’s a point where no corruption can be a bad thing. It can mean that things are too boring.”

The bottom line: Facebook argues that Thiel's outsize role brings needed ideological diversity to the company's councils. But for critics who believe that Facebook's political neutrality claims don't pass the sniff test, the Journal story provides fresh ammo.

Go deeper

GOP Sen. Chuck Grassley announces run for re-election

Photo: Greg Nash/The Hill/Bloomberg via Getty Images

Sen. Chuck Grassley (R-Iowa), the longest-serving Senate Republican, announced on Friday that he's running for re-election in 2022.

Why it matters: The GOP is looking to regain control of both chambers of Congress in the upcoming midterm elections. Several Republicans had urged the 88-year-old senator to run to avoid another retirement after five incumbent senators said they wouldn't seek re-election.

China deems all cryptocurrency transactions illegal

A person walking past China's central bank in Beijing in August 2007. Photo: Teh Eng Koon/AFP via Getty Images

China's central bank declared on Friday that all cryptocurrencies are illegal, banning crypto-related transactions and cryptocurrency mining, according to Reuters.

Why it matters: China's government is now following through with its goal of cracking down on unofficial virtual currencies, which it has said are a financial, social and national security risk and a contributor to global warming.

Biden's big bet backfires

Two key dealmakers — Sen. Joe Manchin (D-W.Va.) and Sen. Mark Warner (D-Va.) — leave a luncheon in the Capitol yesterday. Photo: Kent Nishimura/L.A. Times via Getty Images

President Biden bit off too much, too fast in trying to ram through what would be the largest social expansion in American history, top Democrats privately say.

Why it matters: At the time Biden proposed it, he had his mind set on a transformational accomplishment that would put him in the pantheon of FDR and JFK.