Subject: NYT: Facebook Prepares to Add Friends in Washington
From: "Alexander Snyder-Mackler" <[email-masked]>
To: "Beau Biden" <[email-masked]>, "Hunter Biden" <[email-masked]>, "Eric Schwerin" <[email-masked]>
Date: Tue, 29 Mar 2011 17:30:30 -0400

just saw this in the business section

March 28, 2011
Facebook Prepares to Add Friends in Washington

By MIGUEL HELFT and MATT RICHTEL

Facebook is hoping to do something better and faster than any other technology start-up-turned-Internet superpower.

Befriend Washington.

Facebook has layered its executive, legal, policy and communications ranks with high-powered politicos from both parties, beefing up its firepower for future battles in Washington and beyond. There’s Sheryl Sandberg, the former Clinton administration official who is chief operating officer, and Ted Ullyot, a former clerk for Supreme Court Justice Antonin Scalia who is general counsel, among others. The latest candidate is Robert Gibbs, President Obama’s former White House press secretary, whom Facebook is trying to lure to its communications team.

With good reason, political and legal analysts say. Barely seven years after it was born in a Harvard dorm room, Facebook, as much as any other company, is redefining the notion of privacy and transforming communications, media and advertising in the Internet age.

While the company has come under fire for a series of privacy stumbles, it largely remains a darling of politicians — even earning a glowing mention in the State of the Union. But Facebook has watched the missteps of Microsoft and Google in Washington, and knows that its current skirmishes are merely a prelude to looming clashes over its influence on the economic and social Web. And so it is building a stalwart defense, moving at broadband speed from start-up to realpolitik strategist.

“Information is the gold or the oil of the economy in the information age,” said Paul M. Schwartz, a law professor and expert in information technology at the law school at the University of California, Berkeley. Mr. Schwartz said Facebook seemed to have learned quickly that demands for regulation would pile up, not just from users and advocacy groups but from competitors.

“What they’re doing is pragmatic, and it’s pragmatic to do it sooner rather than later,” he said.

Facebook declined to comment on its conversations with Mr. Gibbs, who is considering a position in Silicon Valley, not Washington.

The company said it understood the importance of having a Washington presence, mainly so it could explain its social networking service and its many features and privacy policies to lawmakers and regulators. But it played down the importance of having connections on both sides of the political spectrum.

“We are looking for people who are passionate about Facebook, who understand and can anticipate policy issues, and who are good at explaining those issues,” said Marne Levine, a former Obama administration official, who joined Facebook last year as vice president of global public policy. She said Facebook hired people of different political affiliations to bring a “diversity of perspectives to its policy team.”

 Still, some privacy advocates are fretting over Facebook’s new hires. These critics say the company’s growing Washington connections will dampen reasonable criticisms about some Facebook policies.

Other policy analysts say that, substance aside, Facebook’s efforts will add up to significant influence.

“The practical implication is it’s going to make it more difficult for advocates to convince members of Congress that Facebook presents a privacy problem,” said Chris Jay Hoofnagle, director of privacy programs at the Center for Law and Technology at the University of California, Berkeley. He said politically connected executives would not only be granted audiences with government officials to discuss substantive issues but, in the case of elected officials, would also have the chance to reinforce the idea that Facebook can be a powerful campaign tool.

 “One of the big points is to show lawmakers that Facebook is important to their own campaigns,” Mr. Hoofnagle said. “Once that fact is established, Congress will not touch Facebook.”

While Facebook’s tentacles in Washington reach to both sides of the aisle, Democrats appear to be dominant, as they are in much of Silicon Valley. Ms. Sandberg, the company’s No. 2 official behind Mark Zuckerberg, its co-founder and chief executive, is a consummate networker who developed deep connections in the Democratic party establishment when she was chief of staff to Lawrence H. Summers during his time as Treasury secretary for President Clinton. While Ms. Sandberg focuses on Facebook’s business side, she remains highly attuned to politics.

“Certainly I’m very focused on what’s going on in D.C.,” she said in an interview last year.

In June, Facebook hired Ms. Levine, who was chief of staff of the White House National Economic Council. She joined a growing Washington office  that also included Timothy D. Sparapani, a former legislative staffer at the American Civil Liberties Union with deep connections on Capitol Hill.

But Facebook has not neglected Republicans. In 2008, it hired Mr. Ullyot, who in addition to working for Justice Scalia, was a White House lawyer and chief of staff for Alberto Gonzales, when he was attorney general in the George W. Bush administration. At the time of his hiring, Elliot Schrage, the company’s communications chief, told The Los Angeles Times that Mr. Ullyot “has extremely strong connections with the Republican Party, and we think that’s a good thing.”

Last month Facebook increased its Republican credentials, hiring Catherine Martin, who had been President Bush’s deputy assistant and deputy communications director for policy and planning.

Facebook’s political operation remains quite small when compared with those of its competitors. The company spent just $350,000 in lobbying in 2010, far less than the $5.1 million spent by Google, according to OpenSecrets.org. Still, the company is building up its Washington operation, which now has 10 people. On Monday, the group moved into new offices with plenty of room for growth. In a nod to Beltway humor, the conference rooms have names like the Rose Garden, Camp David, An Undisclosed Location, Smoke-Filled Room and Kissing Babies.

Facebook is hiring at a rapid pace in all areas of its business to keep up with growth and prepare for a possible public offering

But legal analysts say Facebook is hoping to avoid mistakes made by predecessors like Microsoft. And they say the company is becoming politically savvy earlier in its life than Google, whose connections were firmly established once Eric E. Schmidt, the chief executive, advised the Obama presidential campaign and the administration.

“You can see how the thinking of the technology companies has changed,” said Gary Reback, a Silicon Valley lawyer who helped organize opposition to Microsoft in the 1990s, and more recently intervened to oppose Google’s plans for a giant digital library on antitrust grounds. Last week, a federal judge agreed with many of Google’s critics and rejected a settlement that would have allowed the company to go forward with its digital library plans.

Mr. Reback said that even though Google had come under attack, its connections had probably softened the blow.

“I don’t think anyone in the White House calls up the Justice Department,” Mr. Reback said. “But if you are in one of these agencies and you see a company that should be under investigation palling around with the president, it has a chilling effect. Most of these companies understand that.”

Richard A. Epstein, a New York University law professor and senior fellow at the Hoover Institution, who has counseled companies on how to avoid regulation, said Facebook appeared to have learned especially from Microsoft, whose early disdain for Washington became a liability when it was the target of antitrust regulators in the late 1990s.

 “The stakes have gotten so large that companies are hiring two kinds of people: people who know something and people who know somebody,” Professor Epstein said. “Access is priceless.”

Facebook has spread its political connections beyond Washington. In 2009, it hired Richard Allan, a former member of Parliament in Britain, to be its director of public policy in Europe.

“None of this is rocket science,” said Andrew McLaughlin, who served as director of global public policy at Google before joining the White House as deputy chief technology officer in 2008. “You make a judgment as to how much of a threat you face in D.C., you decide how much money you are willing to spend, and then you hire people based on your strategic sense.”

This article has been revised to reflect the following correction:

Correction: March 29, 2011

A previous version of this story contained extraneous words in the third paragraph.

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