Civic Groups Call on NYS Board of Elections to Close LLC Loophole

NEW YORK, NY (04/13/2015)(readMedia)-- New York's leading civic organizations today sent a letter to Governor Cuomo urging him to get behind their call for the State Board of Elections to close the notorious "LLC Loophole" by immediately reversing its stance on LLCs and campaign contributions.

On Thursday, April 9, the Brennan Center and Emery Celli Brinkerhoff & Abady LLP sent a letter to the New York Board of Elections asking it to reverse its misguided 1996 ruling that created the LLC Loophole. Supporting the Brennan Center's request, advocates are calling on the State Board of Elections to take it up at their next meeting this Thursday, April 16.

"Allowing the LLC Loophole to continue to subvert the clear purpose of campaign contribution limits and campaign finance regulation – to ensure that our democracy is not captured by wealthy special interests – is completely unwarranted. We hope the Governor will join our groups in pointing out that it's time to stop LLC abuse once and for all," said Susan Lerner, Common Cause New York. "The Board of Elections has the power to act now to fix the law and curb corruption in our state and should do so without any further delay."

"The Board made the decision to treat LLCs as humans for the purposes of contribution limits," said Blair Horner, NYPIRG's Legislative Director. "Now thanks to the Board, LLCs have turned into vehicles for 'Loading up Lots of Cash.' It's long past time for the Board to reverse its position. They should do so."

"New Yorkers should not have to wait any longer to close the LLC Loophole. The Board of Elections has the full authority to close the LLC Loophole and should do so at its next meeting," said Dick Dadey, Executive Director of Citizens Union. "We are calling on Governor Cuomo to use his leadership to push the Board of Elections to reverse its ill-advised 1996 opinion that treats LLCs like individuals and allows one person to make multiple gifts circumventing already too high contribution limits."

"For too long, the LLC Loophole has undermined New York's vital contribution limits and disclosure requirements, put in place to protect voters from the toxic effects of unlimited, secret contributions from special interests to our elected officials, " said Lawrence Norden, Deputy Director, Democracy Program, Brennan Center for Justice at NYU School of Law. " The governor has long publicly opposed this loophole. As the head of the executive branch of New York State's government and leader of the State Democratic Party, we hope the Governor will join us in urging the Board of Elections to carry out its responsibility to ensure the integrity of New York's campaign finance system by immediately closing this loophole."

"The LLC loophole allows large donors to have an undue influence in the money in politics arena, far exceeding the state's already lax campaign finance limits," said Barbara Bartoletti, Legislative Director for the League of Women Voters of New York State.

Background

LLCs are used by a wide variety of industries to circumvent the $5,000 annual corporate limit in New York State campaign finance law, relying on the Board's determination to treat LLCs as "individuals" subject to a $150,000 annual limit. As a result, companies are able to donate hundreds of thousands of dollars to individual candidates, in some cases donating over $1,000,000 annually to an individual gubernatorial candidate. Governor Cuomo has publicly recognized the problem and repeatedly called for LLCs to be subject to the same limit as corporations.