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| Eric Schneiderman |
Lovett: Eric Schneiderman benefits from campaign finance loophole that he opposes
Kenneth Lovett, NY Daily News
July 20, 2015
LINK
ALBANY — State Attorney General Eric Schneiderman raked in hundreds of thousands of dollars in donations over the past six months — through a loophole he has said should be closed.
Since January, Schneiderman has received a combined $267,850 from more than 40 different limited-liability companies, his latest campaign disclosure filings show.
The LLC money was a hefty 13% of the $2 million Schneiderman raised in the first half of 2015.
The attorney general, who has been mentioned as a possible gubernatorial candidate in 2018, has been highly critical in recent months of the failure of Gov. Cuomo and the Legislature to enact a comprehensive campaign finance reform package.
Schneiderman also in April wrote a letter to the state Board of Elections calling on the body to close what is known as the LLC loophole, which allows wealthy campaign donors to skirt contribution limits by creating an unlimited amount of subsidiaries that have substantially higher donation limits than regular businesses.
“The so-called ‘LLC Loophole’ has made a mockery of the campaign finance rules enforced by the Board of Elections,” he wrote.
Schneiderman is far from the only politician who has called for closing the loophole while benefiting from it. Cuomo is the biggest beneficiary, having received $1.4 million of the $5.2 million he raised in the past six months from LLCs.
“We always wish that our reform-minded officials lead by example by starting to not take money that they’re pushing to end,” said Citizens Union’s executive director, Dick Dadey.
Team Schneiderman said he is not about to put himself at a competitive disadvantage by turning down LLC donations as long as they’re legal.
“Nothing would make enemies of reform happier than for Eric Schneiderman to unilaterally disarm,” a spokesman said. “He has no intention of doing so, just as he has no intention of letting up in his fight for the dramatic change necessary.”
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State Controller Thomas DiNapoli has never been known as a fund-raising powerhouse, but the $264,372 he received the past six months was particularly paltry.
It was his lowest July filing since 2008, when he had taken over the scandal-scarred office just months earlier and did virtually no fund-raising.
DiNapoli, who actually was the leading vote-getter in last year’s state elections, has just $350,036 on hand. He’ll need a lot more than that if he really wants to run for governor in 2018, a possibility some have raised.
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| Carl Heastie |
Assembly Speaker Carl Heastie is headed north to meet with Syracuse Mayor Stephanie Miner, a foe of Cuomo.
Assembly Speaker Carl Heastie (D-Bronx) will kick off his maiden upstate tour Tuesday by meeting with one of Cuomo’s harshest Democratic critics — Syracuse Mayor Stephanie Miner.
“She’s the mayor of a major city and it’s a good chance to learn about the needs of the city,” said Heastie spokesman Michael Whyland.
Miner, who was Cuomo’s hand-picked party co-chairwoman, had a falling-out with the governor after she repeatedly publicly criticized one of his policies.
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Jennifer Rainville, a one-time city TV reporter who once made headlines as the mistress of disgraced news anchor Rob Morrison, is out as communications director for the Senate Independent Democratic Conference.
Rainville, who was on the public payroll since April 2014 and was making more than $150,000 a year, fell out of favor with conference leader Jeffrey Klein (D-Bronx), sources said.
In a statement, spokeswoman Candice Giove said the conference “decided to go in a different direction with their press operation.”
Rainville took the high road, calling Klein “a good man, one of the last true public servants who cares deeply about his constituents.”
Close New York's biggest campaign finance loophole: The Board of Elections must make one simple fix
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| Andrew Cuomo, Carl Heastie |
NEW YORK DAILY NEWS
LINK
Thursday, April 9, 2015
Amid a never-ending parade of scandals, the state Legislature and governor recently agreed to the third set of ethics reforms in four years. Yet again, this package barely touched the single biggest conflict of interest in Albany: Our loophole-ridden campaign finance system, which allows special interests to dominate political discourse through nearly unlimited and often secret contributions to officeholders and their challengers.
This isn’t something the Legislature wants to give up. Albany’s culture of corruption feeds on big-money donations.
But that doesn’t mean nothing can be done. With one stroke of the pen, three commissioners on New York’s Board of Elections can help fix the problem.
For years, good government groups and editorial boards have complained about the so-called “LLC loophole,” which allows special interests to funnel millions of dollars into campaigns anonymously. Just a few weeks ago, upstate Assemblyman Bill Nojay called it “the mothership of Albany corruption.”
Here’s how it works: The Board of Elections currently classifies limited liability companies (LLCs) as individuals rather than “corporations” or “partnerships,” as they are treated under federal law. While most corporations can give no more than $5,000 every year, each LLC can give hundreds of thousands of dollars
Worse still, individuals with multiple LLCs use them to evade contribution limits entirely. And since LLCs need not disclose the identities of their members or officers, we often don’t know who is behind these sums of money.
And those sums are huge. In one of the starkest examples, a prominent real-estate developer reportedly used 27 LLCs to contribute at least $4.3 million to political committees in the last election cycle. In recent years, he used these and other LLCs to give over $1 million to both the New York State Senate Republican Campaign Committee and Gov. Cuomo, as well as substantial amounts to recently indicted former Assembly Speaker Sheldon Silver.
If you think that kind of money doesn’t buy results, you haven’t been paying attention. “Follow the money of any of the top LLC donors,” Common Cause New York noted in 2013, “and you are likely to find a trail of special favors won and bills unfavorable to the donor killed on arrival in the Legislature.”
This loophole makes a mockery of New York’s entire campaign finance system and allows a few special interests to side-step contribution limits and disclosure rules that were supposed to limit corruption.
How did the Legislature get away with creating this kind of loophole? It didn’t. The Board of Elections did — and it got it terribly wrong.
In a 1996 opinion, the Board reasoned that because the statute creating LLCs called them “unincorporated organization[s],” they were not corporations or partnerships and not bound by the corporate contribution or partnership limits. This ignored the rest of the statute and past precedent.
Worse, in making its decision, the Board relied on a Federal Election Commission rule that was changed just three years later. But New York’s law remains in place. It’s time to change it.
Cuomo and the Legislature failed to bring the most needed ethics and campaign finance reform to Albany. With one simple vote, the Board of Elections can close the LLC loophole, curb unlimited campaign giving and bring more disclosure to New York politics.
For the state agency charged with administering and enforcing of our campaign finance laws, this should be an easy call.
Norden is deputy director of the Democracy Program at the Brennan Center for Justice at NYU School of Law.
This isn’t something the Legislature wants to give up. Albany’s culture of corruption feeds on big-money donations.
But that doesn’t mean nothing can be done. With one stroke of the pen, three commissioners on New York’s Board of Elections can help fix the problem.
For years, good government groups and editorial boards have complained about the so-called “LLC loophole,” which allows special interests to funnel millions of dollars into campaigns anonymously. Just a few weeks ago, upstate Assemblyman Bill Nojay called it “the mothership of Albany corruption.”
Here’s how it works: The Board of Elections currently classifies limited liability companies (LLCs) as individuals rather than “corporations” or “partnerships,” as they are treated under federal law. While most corporations can give no more than $5,000 every year, each LLC can give hundreds of thousands of dollars
Worse still, individuals with multiple LLCs use them to evade contribution limits entirely. And since LLCs need not disclose the identities of their members or officers, we often don’t know who is behind these sums of money.
And those sums are huge. In one of the starkest examples, a prominent real-estate developer reportedly used 27 LLCs to contribute at least $4.3 million to political committees in the last election cycle. In recent years, he used these and other LLCs to give over $1 million to both the New York State Senate Republican Campaign Committee and Gov. Cuomo, as well as substantial amounts to recently indicted former Assembly Speaker Sheldon Silver.
If you think that kind of money doesn’t buy results, you haven’t been paying attention. “Follow the money of any of the top LLC donors,” Common Cause New York noted in 2013, “and you are likely to find a trail of special favors won and bills unfavorable to the donor killed on arrival in the Legislature.”
This loophole makes a mockery of New York’s entire campaign finance system and allows a few special interests to side-step contribution limits and disclosure rules that were supposed to limit corruption.
How did the Legislature get away with creating this kind of loophole? It didn’t. The Board of Elections did — and it got it terribly wrong.
In a 1996 opinion, the Board reasoned that because the statute creating LLCs called them “unincorporated organization[s],” they were not corporations or partnerships and not bound by the corporate contribution or partnership limits. This ignored the rest of the statute and past precedent.
Worse, in making its decision, the Board relied on a Federal Election Commission rule that was changed just three years later. But New York’s law remains in place. It’s time to change it.
Cuomo and the Legislature failed to bring the most needed ethics and campaign finance reform to Albany. With one simple vote, the Board of Elections can close the LLC loophole, curb unlimited campaign giving and bring more disclosure to New York politics.
For the state agency charged with administering and enforcing of our campaign finance laws, this should be an easy call.
Norden is deputy director of the Democracy Program at the Brennan Center for Justice at NYU School of Law.
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