Brennan Center Urges State Board of Elections to Close LLC ‘Loophole’

The Brennan Center for Justice, located at NYU Law School, wrote to the state Board of Elections (SBOE) this week, and urged the commissioners to change the way in which the SBOE treats limited liability companies (LLCs) under the state’s campaign finance laws. Their push includes a guest editorial in the Daily News.

In 1996, the SBOE issued an advisory opinion (1996 Opinion #1), which found that LLCs are not subject to the Election Law’s corporate contribution limits, and should instead be treated as “persons.” The Brennan Center argues that this interpretation has “permitted individuals who control multiple LLCs to use them to use them to evade contribution limits entirely,” and cites one example in which one person who controlled 27 LLCs was able to contribute $4.3 million to political committees over the last two years.

The group wrote:

“The Board’s current treatment of LLCs thwarts the underlying purpose of New York’s campaign finance system, making contribution limits and disclosure requirements extremely easy to evade. It is imperative that the Board close the LLC Loophole and faithfully adhere to New York’s Election Law.”

They argue that the SBOE’s 1996 advisory opinion was based on a 1995 Federal Election Commission advisory opinion which has since been revised.

Gov. Cuomo proposed imposing limits on political donations by LLCs in his 2015-16 Executive Budget, but this provision was not included in the enacted state budget.