Speaker Carl Heastie, Chair of the Election Law Committee Michael Cusick and Chair of the Commission on Government Administration Brian Kavanagh today announced Assembly passage of legislation (A.6975-B) to strengthen rules on political contributions by closing the so-called LLC loophole and bring much-needed campaign finance reform to New York State. The bill passed the People's House with bipartisan support (120 to 8 unofficial).
"Limits on political contributions exist for a reason," said Assembly Speaker Carl Heastie. "With this legislation, we've closed a loophole that excluded limited liability corporations, otherwise known as LLCs, from the limits imposed on corporations. By treating LLCs the same way we treat corporations, we can create greater transparency and put an end to the use of multiple LLCs as a means of working around campaign finance laws."
"By creating a uniform law, we can crack down on the use of LLCs to exploit an existing loophole in campaign contribution limits," said Assemblymember Cusick. "This legislation clarifies election law and allows for better enforcement, marking an important step toward campaign finance reform."
"The LLC loophole is perhaps the most egregious weakness in our laws regulating money in politics. It has been the mechanism of choice for certain people to attempt to buy influence wholesale, by giving virtually unlimited amounts of money to politicians' campaign committees," said Assemblymember Kavanagh. "I thank Speaker Heastie, Chair Cusick, and my Assembly colleagues in both parties for taking this big step forward in our ongoing efforts to ensure that our state government conducts the business of the people with transparency and integrity. I hope the Senate will join us in enacting this, by passing Senator Daniel Squadron's companion bill."
"Closing the LLC loophole is the single most important step we can take to blunt the outsized influence of wealthy corporate donors, who thus far have been able to make virtually unlimited campaign contributions to candidates," said Assemblymember Jo Anne Simon, a cosponsor of the bill. "Closing this loophole will go a long way to restoring the public's trust in government. The Assembly has once again led the way in election reform and I am pleased to have been a part of this effort."
This legislation would clarify election law and impose on LLCs the same spending limits that currently exist for corporations. The existing law treats each LLC as an individual person, with corresponding contribution limits that may easily be avoided where one person or corporation owns multiple LLCs through which contributions are funneled, thereby creating a loophole to spend more than the legal limit on a single candidate or committee. Today's legislation would close this loophole and create a uniform law that subjects LLCs to the same $5000 aggregate contribution limit as corporations.