I am not quite sure but I'm guessing it could be Darth Maul or if you think about it they could be talking about Anikan. It is a good questin and those are my predictions but they're not quite accurate. Hope they help in some way :)
It is in fact, Darth Sidious, aka Palpatine. He is a menace, obviously, to the Republic. He is "phantom" in the definition of "not there or hiding." He is in fact both "not there" and hiding. He made them think Darth Maul was the real menace, while he was not. Thus he is both the "Phantom" and the "Menace."