Editorial

Close the LLC loophole now

Posted

South Shore residents should be proud of the many fine elected officials who represent them on their village and school boards and in Mineola, Albany and Washington. But there have been notorious clunkers, too, and some have gone or are on their way to jail.

The reality is that while most public servants are in their jobs to do good by the people who elected them, there are a relative few who — even if they started out that way — are in it for the power and the cash. Money and politics too often go together like shoppers in a black-market mall: lots of spending by lots of buyers in a place where their desired products or services are quietly made available by merchants willing to sell.

Campaigns cost money. One recent local congressional candidate’s campaign spent more than $3 million. In a recent State Senate race, the Democratic candidate spent $4 million and the Republican spent $2 million. Yet state legislators are paid $79,500 per year. Why would someone spend millions on a job that pays less than $100,000?

Campaigns are financed mostly by donations. Individuals may contribute no more than a total of $150,000 in a calendar year for all election races. Corporations are limited to an annual maximum of $5,000 on all campaign contributions at the state and local level.

Then there is a unique entity known as the Limited Liability Company, which is not a corporation and is considered by the state Board of Elections to be an individual, with, technically, the $150,000 limit.

What would a large corporation do if it wanted to give, say, a million dollars to a candidate? It can’t, right? It can give only $5,000, right? Actually, wrong. If the corporation created seven LLCs, each could contribute $150,000, for a total of more than $1 million to the candidate and party fundraising arms for the candidate. And LLCs don’t have to reveal their members or officers, so it’s hard to trace the actual donors. They have the transparency of a cesspool.

This is a loophole in the campaign funding system that needs to be fixed.

Page 1 / 2