The Limited Liability Company Loophole That Politicians Love
by Paul Wolf - posted 2:59 am, November 19, 2014
Governor Cuomo raised $22 million in campaign cash from 331 donors. From 2010 to 2014, Cuomo’s top 25 donors gave his campaign committee $5.1 million dollars. New York City real estate developer Leonard Litwin through 21 Limited Liability Companies he controls contributed $1 million dollars to Cuomo.
New York State Election Law limits the amount a person can donate to a statewide candidate to $60,800 over a four year period. Corporations are limited to $5,000 per calendar year. Despite these legal limits there are many ways that people can give more. One of the biggest loopholes in the election law is that there is not a limit for campaign contributions from Limited Liability Companies (LLC). LLC’s are a fairly recent legal creation that are a hybrid between a corporation and a partnership. Forming an LLC is an easy process that involves filling out a one page form and paying a filing fee of $200. Many real estate developers create a separate LLC for each development that they own.
A recent article by the Albany Times Union highlighted how LLC’s are used for campaign contributions and to hide the identity of such donors.The day before the election Cuomo raked in $160,000, which included $25,000 from Shared Concepts LLC. The Board of Elections requires every campaign donor to provide an address so that interested citizens and the news media can see who or what entity are behind a campaign contribution.
As the Albany Times Union article points out finding out who is behind an LLC can be difficult and time consuming, which defeats the intended purpose of transparency. Cuomo has raised over $6.2 million from LLC’s, which is more than any other New York elected official. Federal regulations prohibit direct campaign contributions from corporations and LLC’s to a political candidate.
Through money a small number of wealthy individuals and organizations will continue to influence what happens in Albany through the pay to play legalized bribery system we have in place. The LLC loophole in New York could be fixed by legislation but that would require politicians to support the legal limits that exist and the transparency that the law intended.