If Gov. Cuomo wants to be taken seriously as a political reformer, he needs to end his reign as the No. 1 abuser of Albany’s worst fund-raising dodge. He needs to go cold turkey on the so-called LLC loophole.
This absurd 19-year-old rule lets the superwealthy give as much as they want, to whatever elected officials they want, while hiding their names from the public.
It’s a recipe for corruption that government watchdogs deplore as an egregious flaw in New York’s feeble campaign finance system.
Cuomo himself has repeatedly called for closing the loophole — dating back at least to 2010.
Yet the most recent disclosures from his campaign account show he collected a hefty $1.4 million from various limited liability companies, or LLCs, in the first half of this year — the most of any elected official. And that’s on top of the unprecedented $4.3 million in LLC money he reaped during last year’s reelection run.
His haul this year included $250,000 that Capital New York traced to a single developer from the village of Kiryas Joel. The checks arrived a few days after Cuomo vetoed a bill that would have restricted expansion of the Hasidic enclave.
While the governor denies any connection , the circumstances are too aromatic to ignore.
What better way for Cuomo to clear the air than to send those donations back — and declare a self-imposed moratorium on LLC money going forward?
Attorney General Eric Schneiderman, who this year accepted $268,000 from LLCs, should do the same.
The most prodigious LLC donors — real-estate magnate Leonard Litwin and his Glenwood Management firm — figured prominently in this year’s indictments of not one, but two top leaders of the state Legislature: Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos. (Litwin’s giving, understandably, has now stopped.)
If that doesn’t throw a scare into Cuomo, and everyone in Albany, what will?
Cuomo said Tuesday that he supports closing the LLC loophole, but added: “Eliot Spitzer tried unilaterally adopting different practices, which had no effect on the Legislature, and he then reversed himself. Otherwise, he would have been at a competitive disadvantage.”
But fear of “unilateral disarmament” is hard to swallow in the case of a governor who ended the election with $9.2 million in the bank — $3 million more than Republican Rob Astorino raised for his entire campaign.
Cuomo could have put a match to all of his LLC money and still outspent Astorino three-to-one. And with more than three years to go until the next election, he can at least afford to take a break.
A governor sworn to uphold the state’s laws should also consider whether his practices are in that spirit.
A just-filed lawsuit from the Brennan Center for Justice makes a compelling case that the Board of Elections was flat-out wrong to create the loophole in the first place — and wrong again in failing to correct that mistake this April.
In 1996, when LLCs were a new phenomenon, the board should logically have categorized them as corporations, which can donate no more than $5,000 to politicians. Instead, it declared them to be the equivalent of individuals — who can give up to $60,800 to candidates for statewide office.
Worse, a single donor like Litwin is free to donate through as many LLCs as his lawyers can set up — while using obscure names, such as “East 77th Realty LLC” and “Arwin 88th St. LLC,” that conceal the special interest behind them.
This undermines the key purposes of campaign finance laws — which are supposed to set limits on giving while making sure that the money-changing goes on in the full light of day.
Supporting the suit are Sens. Liz Krueger and Dan Squadron and Assemblyman Brian Kavanagh — all of whom decline to accept LLC donations in excess of $5,000 for their own campaigns. Cuomo should do no less.
