Vol. 5 No. 80 - March 7, 2017 - Click here to access our library. 

Potential Schumer Pick for Open FTC Seat

According to several sources following the matter, David Hantman, former Chief of Staff to Senator Chuck Schumer, is a potential candidate for Mr. Schumer’s recommendation for the open Democratic slot at the FTC, which was recently vacated by former Chairwoman Edith Ramirez. Mr. Hantman declined to be interviewed for this article.

Hantman’s Bio

Hantman Strategies. According to his LinkedIn profile and interviews with former colleagues, Hantman currently serves as the Founder and CEO at Hantman Strategies, which is based in Washington, DC and provides “independent political, public policy and communications advice to select companies.”

Silicon Valley rep. Prior to founding Hantman Strategies, Mr. Hantman was Head of Public Policy for Airbnb from November 2012 to October 2015.  He joined Airbnb after working for over five years, from 2007-2012, as Deputy General Counsel and VP of Global Public Policy for Yahoo.

Hill staffer. Before joining Yahoo, Mr. Hantman spent several years on Capitol Hill; he was chief of staff to Senator Schumer from 2005-2007 and he was Chief Counsel to Senator Dianne Feinstein from 1998-2005.

1998 MD State Senate candidate. Mr. Hantman unsuccessfully ran for State Senate in Maryland in 1998, and before that was Chief Counsel to Senator Robert Torricelli, who is perhaps best known for declining to run for reelection after receiving, in 2002, a letter of admonition from the U.S. Senate Committee on Ethics for accepting a variety of gifts from a campaign donor in violation of Senate rules.

Hantman Seen as Controversial Candidate for Democratic FTC Commissioner

Potential uphill climb with Democrats. Hantman’s lack of expertise on antitrust and consumer protection issues, his ties to Silicon Valley, and his most recent role in Airbnb’s fight against Democratic politicians in New York regarding Airbnb’s contribution to New York’s housing crisis all suggest that Senator Schumer will likely have to expend significant political capital to get other key Democratic Senators to support nominating him as a Democratic commissioner to the FTC. 

However, some Democratic staff and consultants said that many Democrats would not stand up to Schumer if the Democratic majority leader really had his mind set on pushing Hantman as the pick.  Former FTC Chairman Jon Leibowitz, who currently is a partner at Davis Polk (which represents Airbnb) sees Hantman as a good potential commissioner: “I’ve known David for 20 years.  He is smart and committed, and has worked with the public interest in mind.  Certainly, when he was both a staffer for the Judiciary Committee and at Yahoo, he was always pushing for the most progressive answers to policy questions."

Additionally, several antitrust lawyers we interviewed opined that Terrell McSweeny would likely leave the FTC when her term expires later this year, leaving two open FTC commissioner slots for Democrats, allowing Schumer to potentially select a Democrat for the latter opening that would appease the more populist wing of the party.

Republicans looking for a tougher approach on Google could balk. Further, given President Trump’s antagonistic posture towards the tech sector, Trump voters’ eagerness for a crack-down on Silicon Valley (see comment section of this Breitbart article), the Trump administration’s consideration of not respecting the policy of putting forward Democratic nominees provided by Senate leadership, and reports that Trump is leaning toward selecting Utah AG Reyes—a Google critic—to chair the FTC, Republicans who are eager for the FTC to look into tech platform dominance could also oppose Mr. Hantman.

Hantman more ideologically aligned with Ohlhausen than McSweeny, creating potential problem for Trump. Based upon Mr. Hantman’s work experience and public statements regarding how public policy should respond to the tech industry, Mr. Hantman’s views appear more consistent with current acting Chair Maureen Ohlhausen than Commissioner Terrell McSweeny, the lone Democrat at the FTC.

In opening remarks to the FTC’s workshop on the sharing economy, Ohlhausen indicated that the FTC should be viewed as an ally of tech platforms when they go up against state and local regulators, “So for all of the various industry participants in the audience, I want you to understand that your relationship with the FTC need not be an adversarial one.  In fact, you may find us a valuable ally in situations where your private interests and our broader public-mission interest intersect. For example, we regularly provide written guidance and commentary to state legislators in appropriate circumstances.”  Indeed, the FTC has weighed in on behalf of tech platforms against state regulatory bodies.  In 2013, the FTC sided with Uber in the company’s fights against the DC Taxicab Commission and against the Colorado Public Utilities Commission as those localities sought to bring regulation of Uber in line with taxi regulations.

In contrast, FTC Commissioner McSweeny, in public remarks at a conference on the Matchmaker economy, aligned herself with Senator Warren in remarks about the durable market power of tech giants: “I’m really mindful of the very legitimate concern about the level of concentration we’re seeing in a number of different sectors in our economy. I think it’s an important time for vigorous antitrust enforcement and, so in that regard, I agree with Sen. Warren’s caution there…I don’t think the MySpace-Facebook example holds up quite so well…I think this is a more stable environment potentially than some of the mythology leads it to seem like it is, right?  Google’s now existed for a very long time, it’s an enormous company, it’s relatively stable in that regard.”

Mr. Hantman’s ideological alignment with Ohlhausen means that if Trump selects the current favorite for the chair position, Utah AG Reyes, and Schumer successfully pushes for a Hantman nomination, Trump’s FTC would likely not have the votes to bring action against the tech sector at least until the final seat at the FTC is filled or one of the remaining commissioners is replaced.

Hantman does not have robust credentials in antitrust and consumer protection.  Hantman’s credentials and experience on antitrust and consumer protection are not strong, given that he had very little government experience working on antitrust and consumer protection issues and that his experience on the issues primarily comes from representing large tech companies in their fights to push the envelope on antitrust—he was at Yahoo when the company attempted to merge with Google—and consumer protection—he fought internally at Yahoo for the company to limit its customer data retention more than industry standards.

One source noted that Hantman has at least a passing knowledge of antitrust: “When he worked for Senator Feinstein, although she was on the Subcommittee on Terrorism, Technology, and Homeland Security, David was responsible for her judiciary committee staff and handled all other issues as well, including antitrust and consumer protection issues.”  A former colleague of Hantman’s said that Mr. Hantman’s intelligence could allow him to get up to speed quickly, “But he’s very smart, very intelligent — I’m sure he’s capable of getting up to speed.”

Currently, Democrats are a particularly weak party with few opportunities to have a voice on policy matters.  One antitrust lawyer who spoke with us on condition of anonymity argued that picking Hantman would be, strategically, a missed opportunity for Democrats looking for more aggressive enforcement and leadership on antitrust issues: "During the Obama Administration, Republicans were effective at picking ideological heavyweights for the FTC and FCC.  Commissioners like Josh Wright and Ajit Pai captured their respective agencies.  They were louder and more ideologically coherent, on many issues, than their Democratic counterparts, particularly at the FTC.”

The lawyer continued: "The Democrats need to learn from this experience by selecting intellectual heavyweights with a clear vision.  It's time for Democrats to put policy ahead of politics.  Democrats can no longer afford to view these Commissioner positions as throw-away opportunities to reward loyal lieutenants.  The enforcement situation is dire because the Democrats have lost power across the spectrum of federal and state government, and they have very few influential voices standing up to consolidated economic power."

Senators Warren, Schatz, and Feinstein, on July 13 of last year, sent a letter to the FTC to investigate rental platforms and study housing affordability and discrimination.  The letter laid out some positives about housing rental platforms, saying that they “have sparked innovation, increased competition, and have provided new means by which our constituents can earn extra income.”  But, the letter mainly focused on concerns: “we are concerned that short-term rentals may be exacerbating housing shortages and driving up the cost of housing in our communities.  We have also read troubling reports of racial discrimination in some short-term rental platforms.  Furthermore, we are concerned that communities and consumers may be put at risk through violations of sensible health, safety, and zoning regulations under state and local law.” 

The letter also highlights the Senators’ takeaways from a FTC event at which Mr. Hantman participated as a panelist: “At the FTC’s June 9, 2015 workshop…there was widespread agreement that more information and data was needed to properly assess the impacts of the short-term rental industry on communities.  Unfortunately, the platform companies, which are the best positioned to provide this type of information, seem reluctant to do so.  And even if platform companies do share their data, concerns have been raised about the reliability of this data.” These same critiques were directed more specifically at Mr. Hantman at a January 2015 New York City Council hearing on Airbnb.

Platforms increasingly facing skeptical media. Additionally, Uber, Airbnb, and other tech platforms and their claims to benefit consumers have come under increasing scrutiny of late.  Articles highlighting this include:

• A NY Daily News article titled “Most Airbnb hosts in black neighborhoods are white, study shows”;
• An InsideAirbnb post titled “How Airbnb’s Data hid the Facts in New York City”;
• An InsideAirbnb post titled “Airbnb vs. Rent: City of Los Angeles”;
• A New York Times article titled “How Uber Deceives the Authorities Worldwide”.

Democratic party, including key Senators, now favors more muscular antitrust enforcement and more scrutiny of tech giants.  At a June 29, 2016 speech at a conference co-hosted by New America and The Capitol Forum, Senator Warren called specifically for stronger antitrust enforcement, and she called out efforts by Silicon Valley to foreclose competition: “Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition.”

Last Summer, Vice reporter Sam Gustin laid out a compelling case that the Democratic party is shifting towards a focus on antitrust enforcement and taking on Silicon Valley.  Gustin noted that the Democratic Party included very strong antitrust language in its party platform in the run up to the presidential election and concluded: “The language reflects an emerging consensus among many Democrats that years of corporate consolidation have created harmful concentrations of power in several major sectors of the economy, including the financial services, airline, telecom, technology, and healthcare industries.”  He added, “A growing body of academic literature suggests that the harms of such concentrations of power fall disproportionately on low-income people, exacerbating income inequality.”

Mr. Gustin also pointed out that Senator Al Franken, at an antitrust hearing last year, said that he had concerns regarding “internet giants that use their positions as dominant media platforms to stifle competition and inhibit the free flow of ideas.”  At that same hearing (see here for our coverage), Senator Blumenthal made a strong call to revamp antitrust enforcement: “In many of these industries, and I have a chart here that refers to the HHI index in food and staples retailing, internet software, airlines, media, the merger policy of our nation simply has failed.  So I would suggest that as a national initiative we need to rethink the approach we've taken in the past… Sometimes it will take innovative and creative enforcement.”

Senators Franken and Blumenthal both sit on the influential Senate Antitrust Subcommittee. Further, a litany of articles, papers, and speeches have been presented in the past year calling into question the dominance of tech platforms and the adequacy of antitrust enforcement.  These influential articles and papers include:

• Lina Khan’s article “Amazon’s Antitrust Paradox”;
• Khan and Sandeep Vaheesan’s paper “Market Power and Inequality: The Antitrust Counterrevolution and its Discontents”;
• Stratechery author Ben Thompson’s blog post “Manifestos and Monopolies”;
• Matthew Stoller’s piece in the Atlantic titled, “How Democrats Killed Their Populist Soul”;
• A September 2016 speech by Acting AAG Renata Hesse of the Antitrust Division;
• WSJ’s Jason Zweig’s piece titled “Disturbing New Facts About American Capitalism”;
• The Institute for Local Self Reliance’s report “Amazon’s Stranglehold: How the Company’s Tightening Grip is Stifling Competition, Eroding Jobs, and Threatening Communities”;
• A Financial Times piece titled “Policing the Digital Cartels”.

Hantman’s Tenure at Airbnb and the Company’s Fight Against New York

Hantman began his time at Airbnb already in an aggressive posture.  Hantman announced that he was leaving Yahoo! for Airbnb in a memo to his colleagues first reported by Recode.  Hantman’s memo portrays him as a true believer in Airbnb from before he even took the job: “They have some huge challenges with a few antiquated laws in their biggest markets, so my job will be to help them convince governments that allowing people to rent out their own homes or apartments should not be a problem, and that in fact it is great for the economy and for the tons of people that can only pay their mortgage or rent through the extra income they get from Airbnb.”  Recode described the language in the Hantman memo as “coming out swinging.” 

Business Insider analyzed the Hantman hiring as a shift toward a more aggressive strategy for Airbnb: “To date, Airbnb has tried to generate positive publicity about the economic benefits it claims its rentals bring to local economies. That soft approach doesn't seem to have led to much progress. Hantman's hire suggests Airbnb is going to try to lobby more aggressively to get regulations changed to make its transactions explicitly legal.”

Hantman’s starring role at 8-hour January 20, 2015 New York City Council Meeting: “Short term rentals — Stimulating the economy or destabilizing neighborhoods?”  Myriad news outlets covered the hearing in detail (The New York Times, The Verge, The Observer, Gothamist).  Mr. Hantman’s tactic of suggesting, in his testimony, that “New York policy makers should not be left behind or advocate against their own citizens who depend on home sharing to pay the bills” did not sit well with several councilmembers. 

City councilmembers were most upset by Mr. Hantman’s unwillingness to provide data to the council and to monitor illegal advertising on the Airbnb site.  Councilman Jumaane Williams provided the most direct critique of Mr. Hantman’s testimony on this point, “you don’t even know who on your listing is violating the law or not… You haven’t done any research.  So how would you know if they’re violating the law or not.”  Throughout the testimony, Mr. Hantman sought to portray Airbnb as popular in New York and a service that helps New Yorkers earn extra money, but he was unable to convince the city council because of the disagreement over the quality of data available.

In interviews with Capitol Forum, New York pols oppose Hantman as FTC Pick.  In an interview with The Capitol Forum, New York State Assembly member Linda Rosenthal, who provided testimony at the above-mentioned city council hearing, said of Mr. Hantman, “[He] was charged with getting around laws in different markets.  It doesn’t give me comfort that he will look out for the best interests of the consumer, the little guy, because their business model is predicated on breaking the law.  That’s what makes me furious and what makes many others furious.” 

In a separate interview, City Councilwoman Helen Rosenthal, who questioned Hantman at the same hearing, said, “David Hantman certainly wouldn’t be my choice. The fact that he would take a job with Airbnb and represent them in front of the council tells me he is more interested in corporate profits than ordinary people. The FTC is the agency that regulates short-term rental websites, and David Hantman is somebody who would be against regulating, I assume, given his testimony at the City Council hearing last year.”  

“Loud” housing advocates and powerful New York hotel lobby defeated Airbnb in legislative fight. Schumer may have to weigh going up against New York’s influential hotel lobby and loud housing advocates if he decides to select Mr. Hantman.  The press widely covered passage of New York’s 2016 law focused on Airbnb as a resounding political defeat for the tech platform.  Skift, a travel news site, declared in a headline, “Airbnb Loses New York Battle as Governor Signs New Law Aimed at Hosts.”

In an interview with The Capitol Forum, Neal Gorenflo, co-founder of Shareable, “an award-winning news, action, connection hub for the sharing transformation,” explained the opposition to Airbnb: “New York City also has powerful interests—the hotel lobby and the housing advocates are  powerful and loud.  They had the institutional wherewithal to resist.”
 
Assembly member Linda Rosenthal described the scale of the fight over Airbnb in New York, “[Airbnb] hired almost every lobbyist in town, but the bill passed and the Governor signed it, so, the lobbyists didn’t perform as they were paid to. It is a testament to the tenacity of all of those who were in support of this bill.  In support of lowering the impact of illegal units rented out through Airbnb on our housing market.”

Hantman’s Time at Yahoo: Antitrust Authorities Nix Google/Yahoo Partnership

In November 2008, Google and Yahoo walked away from an advertising partnership because Bush administration antitrust authorities threatened to litigate against the companies. A September 2008 article in Network World detailed Yahoo’s efforts to lobby in favor of the partnership and linked to a letter from Mr. Hantman to Congressman Steve Chabot who had concerns about the proposed relationship between Google and Yahoo. 

Again, withholding data was a key concern of Mr. Chabot that Mr. Hantman asked to be overlooked.  In the letter to Rep. Chabot, Mr. Hantman stated, “I am sure you can understand that in this highly competitive industry, we are reluctant to share proprietary business information.  The redacted agreement does include the key terms of the deal, however, and I think it can allay any concerns about how the deal will affect competition.”

One source who was a former colleague of Mr. Hantman noted that Mr. Hantman did lobby internally at Yahoo for the company to show leadership by limiting customer data retention more than other tech companies at the time.

Hantman’s Work for Schumer and Feinstein

Connected. Colleagues of Hantman from his time on the Hill describe him as very well connected. Said one source speaking on condition of anonymity: “He’s a smart political operator, and he has very good political connections.”

Conservative. Sources described Hantman as either centrist or conservative. “He’s worked for Democrats, but he was always considered one of the more conservative members of the staff,” said one source. “That was true even when he was on Senator Feinstein’s staff, even though Feinstein is pretty moderate herself.”

Committed. A source explained that Mr. Hantman was, “accustomed to getting his way. He worked for members that get their way and companies that get their way,” he noted. “So I would say he’s very self-assured in his opinions, and is a strong advocate for his position.”

Married to Google’s First In-House Lobbyist

In 2010, Mr. Hantman married Jamie Brown, who now goes by Jamie Brown Hantman. Mrs. Hantman currently serves as President of the lobbying firm JBH Group, and her bio lays out her impressive career in Republican politics: “Jamie has represented a wide variety of clients on issues including technology policy, intellectual property, privacy, antitrust, retail crime, taxes, trade, energy, defense acquisition, and health care. 

Her bio continues: “Having spent time as Google’s first in-house lobbyist, she has the first-hand experience that enables her to now provide valuable insights for her corporate clients: an ability to understand the needs and views of corporate innovators and advocates, and an insider’s perspective on the legislative and political challenges facing cutting-edge businesses today.  At Google she led efforts to create a Political Action Committee, develop a training curriculum for Congressional staff to promote the brand, and shape the company’s public policy messages…Prior to her time at Google, Jamie served as a Special Assistant to the President for Legislative Affairs in the White House. In that capacity, she managed the Senate strategy for the confirmation of U.S. Supreme Court Chief Justice John Roberts and Associate Justice Samuel Alito. She also served as the liaison to the Senate Judiciary Committee and the Senate Homeland Security and Governmental Affairs Committee. These duties placed her amidst successful efforts to enact class action reform, bankruptcy reform, PATRIOT Act reauthorization and numerous other civil and criminal reforms.”

In addition to working as Google’s first in-house lobbyist, Mrs. Hantman has lobbied for Airbnb, Yahoo, and other tech organizations. Mrs. Hantman’s firm, JBH Group, represented Airbnb as a lobbyist while her husband was head of global public policy at the company.  According to the Senate Lobbying Disclosure Act Database, JBH Group, with Mrs. Hantman acting as the sole lobbyist, was paid $25,000 per quarter for lobbying services starting the second quarter of 2012 and ending in the third quarter of 2016.  According to the lobbying registration filings, Mrs. Hantman lobbied on “programs and policies affecting the sharing economy” and she specifically lobbied the “Special Assistant to the President for Legislative Affairs.”

The JBH Group also represented Ebay from 2011-2014.  For Ebay, Mrs. Hantman lobbied on the Marketplace Fairness Act” and again specifically lobbied the “Special Assistant to the President for Legislative Affairs.”  A Hill article from February 2016 described the bill as “giving states more authority to tax purchases made online, even when someone in their state buys the online item from a retailer with no physical location in the state.  States and retail groups have long called for a fix, arguing that physical stores are being outmatched by online stores because of the tax advantage.”

Before founding the JBH Group, Mrs. Hantman was a principal at lobbying firm Mehlman Vogel Castagnetti (known then as Mehlman Castagnetti Rosen & Thomas) from 2007-2011.  Again, Mrs. Hantman’s clients included Mr. Hantman’s employer at the time.  A 2008 lobbying disclosure report shows Mrs. Hantman worked as a lobbyist representing Yahoo before Congress on “Antitrust issues relating to business arrangements between Yahoo! and Google.”

Clients Mrs. Hantman lobbied on behalf of while at Mehlman include (among others) Abbott Labs, America’s Health Insurance Plans (AHIP), American Petroleum Institute, Applied Materials, Blackberry, Corrections Corporation of America, Ebay, Electronic Retailing Association, Hewlett-Packard Company, Humana, ICANN, Intuit, Koch Companies Public Sector, Merck, Pfizer, Procter & Gamble, Technology CEO Council, and Walmart.

Hantman Runs for State Senate in 1998 as “Conservative Democrat”

In 1998, Hantman ran an unsuccessful campaign for State Senate in Maryland, losing to Republican incumbent Christopher McCabe by a vote of 27,093 (58%) to 19,749 (42%). A May 1998 article in the Baltimore Sun describes Hantman’s platform to run for State Senate as focused primarily on social issues and politics rather than on economic issues.  According to the article, Hantman ran on a message of supporting abortion rights and gun control and challenging his opponent as too conservative and not tough enough on ethics issues. The only economic issue discussed in the article is Hantman’s support for an income tax cut.

A June 8, 1998 article in the Gazette provides the following picture of the campaign as articulated by Mr. Hantman: “The major campaign issues are crime -- especially juvenile crime -- education and technology, Hantman said.” Even in 1998, Mr. Hantman was already focused on technology jobs.  Again, the Gazette article quotes Hantman: “Maryland has to keep attracting jobs in the technology industry and make sure the jobs that are here stay, he said. Students should be trained for the jobs of the future, he said.”

The Gazette article also lays out more traditional education and infrastructure policies as campaign issues for Hantman: "We need to lower class size to 15, especially in the primary grades," Hantman said. "We need to build more buildings and hire more teachers." Interestingly, in the Gazette article, Hantman laid out a vision for politics that is closely tied to political relationships and identity: “"I know most of the delegates and a lot of the senators [in Annapolis]," Hantman said. "When I get there it will help me hit the ground running. I know the issues, people and environment.””

Lastly, the Gazette article lays out how Hantman viewed himself at the time: “Hantman describes himself as a conservative Democratic.”  "I recognize the need for fiscal responsibility," he said. "Government can't solve every problem."” An October 31, 1998 article described the Hantman campaign as focused on campaign finance: “[Hantman] has called for campaign finance reform and is pushing a proposal to require major donors to disclose the identities of their employers.”