The AG Strikes Again

Attorney General Eric Schneiderman may be facing a serious challenge for re-election this year. It has been widely speculated that John Cahill, former chief of staff for Governor George Pataki and a widely respected figure in and out of state politics, will oppose Mr. Schneiderman’s re-election bid. And if you think Mr. Schneiderman’s popular running mate, Governor Cuomo, will break a sweat campaigning on behalf of the Attorney General, well, you haven’t been paying close attention to the machinations in Albany over the last few years.

So Mr. Schneiderman has a problem. He needs headlines. He needs a villain. He needs Airbnb, the innovative service that allows homeowners to rent their properties to travelers.

The Attorney General is engaged in a legal battle with Airbnb, charging that the service is evading local laws governing short-term rentals. There’s no question that Airbnb provides services without having to pay the city’s 5.8 percent hotel occupancy tax, something that drives hotel operators nuts.

While the legal battle unfolds, the Attorney General has stepped up his rhetoric against the service. As Observer sister site Betabeat has reported on its new NYC Disrupts Disrupters beat, the Attorney General railed on against Airbnb during a speech at a Crain’s New York Business breakfast in late April. He said that prostitution rings are big fans of Airbnb because, unlike hotels, there’s nobody at a desk asking questions. It was, he said, his obligation to “protect the people living in our residential housing so that you don’t have problems that are emerging anecdotally about apartments being trashed, parties, prostitution, drug sales.” 

Of course, he has other obligations as well. And in a rare moment of candor, he acknowledged that there were other considerations at work. “We are just looking in New York to enforce New York law and alsofrankly to protect our hospitality industry,” he said. Forget the first part of that sentence and focus on the final six words. That’s the heart of the issue.

Mr. Schneiderman and many others in elected office are beholden to an array of special interests that seek to shackle those who would challenge the cozy system constructed by regulators, unions and their allies in government. In Mr. Schneiderman’s case, he is dependent on the support of the city’s hospitality industry and its 400,000 unionized employees. 

So Mr. Schneiderman is doing his part to disrupt the disruptors. That’s what this is all about.