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Twitter Paid Whistle-Blower $7 Million for Silence, Lawyer Says

Twitter Paid Whistle-Blower $7 Million for Silence, Lawyer Says

(Bloomberg) -- Twitter Inc. paid a whistle-blower who raised questions about operational problems within the social media platform $7 million to secure his silence, according to a lawyer for Elon Musk.

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The payment was mentioned in passing at a Sept. 6 hearing in the lawsuit between Twitter and Musk over his attempts to cancel a $44 billion purchase of the company. “They’re paying the guy $7 million and making sure he’s quiet,” Musk attorney Alex Spiro said at the hearing. People familiar with the matter confirmed the reference was to a payment to whistle-blower Peiter Zatko.

Twitter representatives Thursday declined to comment about the payment to Zatko, the company’s former head of security. The Wall Street Journal reported the payment Thursday. The newspaper, citing unidentified people familiar with the matter, said the payment was part of a settlement related to Zatko’s lost compensation after leaving Twitter. The deal didn’t let Zatko speak publicly, but would allow him to act as a government whistle-blower about his time at the social medial company, the Journal reported, citing the people familiar.

Musk walked away from his acquisition of Twitter after claiming the platform misled him and investors about the number of spam and bot accounts among its more than 230 million users. Twitter counters that Musk’s bot concerns are a pretext to get out of a deal in which the world’s richest person allegedly developed buyer’s remorse.

Both sides are gearing up for an October trial of Twitter’s lawsuit to force Musk to consummate the deal. Delaware Chancery Judge Kathaleen St. Jude McCormick on Wednesday approved Musk’s bid to add Zatko’s allegations to his counterclaims. But she denied his bid to delay the trial.

The billionaire argues Zatko raised concerns about the number of bots embedded in Twitter’s customer base along with allegations of lax computer security and privacy issues before being fired from the social media platform. Musk contends Zatko’s claims bolster his arguments that he legitimately nixed the deal.

During their argument to McCormick, Twitter’s lawyers took aim at Zatko’s credibility, dismissing his complaints as being motivated to harm the company he was fired from and not credible.

Spiro defended Zatko by saying the whistle-blower didn’t just take his money and leave his issues with Twitter behind. Instead, he approached Congress and regulators with his complaints. Zatko is scheduled to testify before a Senate committee next week and has been subpoenaed to testify in the Twitter lawsuit, as well.

“The problem is that they paid him $7 million,” Spiro told the judge. “The problem is that if he really wanted money, then how come he’s still doing this if he doesn’t want justice also.”

The case is Twitter v. Musk, 22-0613, Delaware Chancery Court (Wilmington).

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