Assembly Approves Bill on Political Donations by LLC, Senate Committee Does Not Consider the Bill

Yesterday, the Assembly approved A.6975-B, which would treat Limited Liability Companies (LLCs) as corporations for campaign finance purposes. As a result, LLCs would be limited to making a total of $5,000 in political donations in any calendar year.

Under a 1996 opinion of the State Board of Elections, LLCs are treated as individuals under the state’s campaign finance laws, meaning that they can make up to $150,000 in campaign contributions annually. This legislation is intended to close what reform groups call the LLC loophole, which they say “has allowed special interest groups to funnel tens of millions of dollars into political campaigns, sometimes in secret, circumventing both contribution limits and disclosure requirements.”

Assembly Speaker Carl Heastie said:

“Limits on political contributions exist for a reason. With this legislation, we’ve closed a loophole that excluded limited liability corporations, otherwise known as LLCs, from the limits imposed on corporations. By treating LLCs the same way we treat corporations, we can create greater transparency and put an end to the use of multiple LLCs as a means of working around campaign finance laws.”

A similar bill (S.60) that is pending in the Senate was not taken up yesterday by the Senate’s Committee on Corporations, Authorities and Commissions, to which it was referred in late April. The bill’s sponsor, Senator Dan Squadron (D-Brooklyn/Manhattan), complained that the bill should have been on the committee’s agenda under the Senate Rules. (Read my prior blog post on this bill here.)

Read news coverage of the issue from the Times Union, the AP and the Gotham Gazette.