Nearly two decades ago, New York’s Board of Elections quietly created a gigantic loophole in the state’s campaign finance laws when it decided that limited liability companies were no different from people when it came to donations to candidates. Under state law, corporations are limited to political donations of $5,000 a year. But limited liability companies are allowed to donate $60,800 a year to any statewide candidate, just like individuals. The loophole has been an invitation to abuse. The most recent campaign filings in New York revealed that in the last six months, Gov. Andrew Cuomo received $1.4 million from L.L.C.s while Attorney General Eric Schneiderman got about $220,000. Both politicians have called for closing the loophole, which allows donors to set up numerous small, secretive companies often identified only by an address. For instance, 56th Realty, 80th Realty and 92nd Realty are three L.L.C.s listed at the same address, which is also the address of Glenwood Management, a powerful real estate company.
Each L.L.C. can contribute up to $60,800. Since 1999, these fake companies have contributed more than $118 million to various campaigns. This tactic has grown increasingly popular, with $54 million in L.L.C. money donated between 2011 and 2014.
This huge problem could easily be fixed if the four-member Board of Elections simply reversed its almost 20-year-old position. But in April, two Republican members — Peter Kosinski and Gregory Peterson — voted to keep the big money rolling in. They argued that even though the board created this means of circumventing campaign contribution limits, only the Legislature can undo the original ruling. Though the two Democrats voted to close the loophole, a tie meant defeat. Albany lawmakers who enjoy the easy money had to be relieved.
Full Article: New York’s Big Money Loophole – The New York Times.