A spate of vacancies will soon turn the federal regulatory commissions that police financial trades, telecommunications, energy, and consumer protection into key political battlegrounds, with Donald Trump on one side and Senate Minority Leader Chuck Schumer on the other.
Instead of a single director, the Federal Communications Commission, Federal Trade Commission, Commodity Futures Trading Commission, Securities and Exchange Commission, and Federal Energy Regulatory Commission each have five members, nominated by the president. But by statute, no more than three members can be from the president’s party. The Federal Election Commission’s six members are supposed to be evenly split. This is supposed to give some weight to diverse viewpoints.
As the Trump era begins, active members at the commissions have dwindled. Ann Ravel, a Democrat, just quit the FEC, leaving that agency one member short. The FCC has only three of its five seats filled; the FTC, SEC and CFTC have only two. The FERC’s two members do not constitute a quorum, meaning it cannot approve dozens of energy infrastructure projects or enforce several energy-related laws. The commissioners have had to delegate these operations to staff.
Trump has made a handful of nominations to fill Republican vacancies: longtime corporate lawyer Jay Clayton to chair the SEC, for example, and two picks, including a senior adviser to Mitch McConnell, for the FERC.
But Trump has not made any movement with regard to the positions that cannot go to Republicans — and there’s one such slot vacant on every one of these six commissions, with more coming down the pike.
In fact, the Trump administration has pulled several commission nominees left over from the Obama era, including one Democratic nominee to the CFTC.
That has led to concerns that Trump might choose conservative-leaning independents instead of Democrats, effectively silencing the opposition party on those commissions. It’s even possible that Trump will decline to fill minority party vacancies, along the lines of top adviser Steve Bannon’s vow to deconstruct the administrative state.
But there’s an arguably even grimmer scenario for progressives, and it involves Sen. Schumer.
Traditionally, the minority leader in the Senate — Schumer — has wide discretion to recommend minority-party commission members, who the president then nominates. In theory, the Democratic Senate caucus needs to agree on Schumer’s choices, but typically, the choice falls to the leader.
Those nominations matter — because while minority party panel members routinely get outvoted, they can create a record of opposition and carry the banner for the party’s ideas and principles. They also matter tremendously when the presidency changes. For example, Ajit Pai, a Republican FCC commissioner under Obama, routinely agitated against Democratic-favored positions for an open internet and expanded broadband access. Under the Trump administration, Pai became chair, and he has acted aggressively in the first two months, blocking a cap on prison phone rates and limiting a program for low-income families to purchase affordable broadband. Trump just re-nominated Pai to another five-year term.
And if it does come down to Schumer, will he select ideologically progressive nominees who would fight Trump’s deregulatory initiatives tooth and nail? Or will he select business-friendly nominees who will be willing collaborators.
“Schumer can lay out a Democratic governing agenda,” said Matt Stoller, a fellow at the Open Markets program at the New America Foundation (and Intercept contributor). “This is how you can tell whether the Democrats are serious.”
Early signs have not been encouraging. Schumer is reportedly interested in elevating his former Chief of Staff David Hantman — who currently lobbies for Silicon Valley firms — to a Democratic seat on the Federal Trade Commission.
The Capitol Forum, a subscription-based news service for policymakers and investors, first reported on the potential Hantman pick for the FTC, which regulates unfair business practices and antitrust violations. Hantman spent over a decade on Capitol Hill, working for Robert Torricelli, Dianne Feinstein, and finally Schumer.
But most recently, he’s represented Silicon Valley in its dealings with the government. And far from being a supporter of activist government and a counter-weight to Republican deregulatory impulses, Hantman is likely to be even more opposed to regulating the tech industry than his potential GOP colleagues.
Hantman served as vice president of global public policy for Yahoo — a top lobbyist position — from 2007 to 2012, then in a similar capacity for Airbnb from 2012 to 2015. He now runs Hantman Strategies, a lobby shop in D.C. for “independent political, public policy and communications advice to select companies.”
Hantman’s private-sector work suggests a belief that large Silicon Valley firms should be granted leeway from government regulations. At Airbnb, he explained his job in an internal memo as to “convince governments that allowing people to rent out their own homes or apartments should not be a problem,” seeking to toss out “antiquated laws.” Hantman represented the company at a 2015 New York City Council meeting. He refused to share data on Airbnb listings to determine which violated city statutes. Eventually, Airbnb lost the fight, as New York State passed legislation cracking down on illegal short-term rentals.
The tech sector will likely be a major FTC focus in the coming years. President Trump may choose as chair Utah Attorney General Sean Reyes, who has been vocal about needing to investigate Google over improperly using its market power to get its apps installed on mobile phones. Venture capitalist Peter Thiel, who has called Google a monopoly, has been active in screening potential antitrust enforcers.
Google’s parent company Alphabet has scrambled to hire former Republican staffers in a bid to ingratiate itself to the new regime in Washington. But Hantman’s perceived friendliness to tech firms would provide a critical beachhead for Silicon Valley at the FTC, from the Democratic side of the aisle.
“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,” said New York City Councilwoman Helen Rosenthal to the Capitol Forum.
Hantman’s wife, Jamie Brown Hantman, served as “Google’s first in-house lobbyist,” and before that, in George W. Bush’s White House, working on the Supreme Court confirmations of John Roberts and Samuel Alito. Brown Hantman now runs a lobbying firm called The JBH Group, and disclosure forms show that she has on more than one occasion received business from companies where her husband was employed. She was paid $25,000 a quarter from Airbnb from 2012-2016 to lobby for a vague portfolio of “programs and policies affecting the sharing economy.” She also lobbied for Yahoo when her husband worked there, specifically on antitrust issues involving partnerships between Yahoo and Google.
Brown Hantman’s ongoing lobbying, which often involves the tech sector, could lead to Hantman’s recusal on the FTC in cases involving those companies.
Schumer’s office declined to comment on whether Hantman would be chosen for the FTC position. Remarking on rumors that Trump would not grant Schumer the power to choose minority-party commission slots, a spokesman told The Huffington Post, “We intend to assert our prerogative on nominees as has always been done.”
The position of a minority party commissioner can be lonely but critical. Progressive fighters like Ravel at the FEC, Julie Brill at the FTC and Kara Stein at the SEC, worked to hold violators of the law accountable regardless of their wealth or privilege. Of the three, the only one currently serving is Stein, whose term is up in June.
In the face of a Republican onslaught of the regulatory state, they can serve as a last line of resistance, raising public awareness of the stakes of failing to enforce an insider trading scheme or allowing pharmaceutical giants to merge and jack up prices.
Historically, Democrats have not taken full advantage of this opportunity. During the Obama administration, Republicans routinely chose ideologues to serve as minority members of regulatory commissions. But Democrats often picked commissioners with ties to Senate leaders, regardless of their more corporate-friendly tendencies.
For example, Mark Wetjen, a former Harry Reid staffer who became a Democratic member of the Commodity Futures Trading Commission, repeatedly undermined Democratic initiatives by siding with derivatives trading firms. Pamela Jones Harbour, a Democratic selection for the FTC under George W. Bush, was actually a political independent. She was later appointed as a senior vice president to sketchy multilevel marketing firm Herbalife.
Top photo: The seal of the Federal Communications Commission hangs behind an empty seat at FCC headquarters.
The post As Trump Neuters Regulatory Commissions, Chuck Schumer Needs to Decide If He Will Fight or Give In appeared first on The Intercept.