Assembly Speaker Carl Heastie, Election Law Committee Chair Michael Cusick and Assemblyman Brian Kavanagh today announced the Assembly's approval of legislation to close the Limited Liability Corporation (LLC) loophole in the state's campaign finance laws in order to bring greater transparency and accountability to elections for public office in New York State.
"With the enactment of this bill, no longer will individuals or entities be able to make repeated, unchecked and virtually unlimited, campaign contributions to a candidate through multiple LLCs at dollar amounts that exceed the corporate contribution limits," said Heastie. "To expand accountability and disclosure in campaign fund raising, the Assembly has passed this legislation to close the LLC loophole for several years because we believe it's critical to ensuring the integrity of our electoral and political process."
"This bill corrects a provision in the law that treats LLCs as individuals, which has been exploited in ways that have virtually directed a limitless amount of campaign contributions to candidates," said Cusick. "Without closing this loophole, the money of big donors will continue to have an unfair influence in our elections."
"The LLC loophole allows big special interests to virtually by pass the campaign contribution limits that apply to most New Yorkers, and give politicians vast sums of money, often without clearly identifying the source," said Kavanagh, the bill's sponsor. "With the Speaker's leadership and bipartisan support, the Assembly has taken a crucial step toward reforming our laws and eliminating one of the preferred tools special interests use to buy influence wholesale. It's long past time for the Senate Majority to join us in shutting it down."
"For too long now, we have lived with the law's egregious LLC loophole, which has been one of the biggest deterrents to establishing a campaign contribution system that reigns in the flow of large contributions and diminishes the influence of wealthy donors. By approving this bill to eliminate the LLC loophole, we level the political playing field, help to create a campaign finance system that places a greater reliance on small donors and bring greater transparency and accountability to our elections," added Heastie.
The Assembly's LLC loophole closing legislation (A.1926, Kavanagh), which has passed every year since 2015, would eliminate a provision in the current law that allows LLCs to make campaign contributions as individuals, ending the practice where one person or a corporation owns multiple LLCs that are used to funnel donations to a single candidate or committee.
Under the bill, the LLC contributions would be restricted to the same $5,000 aggregate contribution limit that current law imposes on corporations. The measure also would require contributions made by an LLC to disclose the identity of all direct and indirect LLC owners, including the percentage of their ownership interest. It also directs that attribution be provided in reports to the board of elections for any contributions made by the LLC to its owners.