For no good reason, New York State allows LLCs to contribute $60,800 per candidate while restricting corporations to $5,000. Earlier this week, Governor Cuomo proposed also capping LLCs at the corporate limit. This is a bit better than nothing, but will probably not make much of a difference in the real world. This is because LLC’s are extremely easy to create, and in places like New York, real estate moguls have hundreds of LLCs and could easily create hundreds more. According to Transparency International, in most US states it is easier to create an LLC than get a library card — and you can do so anonymously.
Real Reform: $5,000 cap per beneficial owner: the person, union or company who actually controls
By far the best way to close this loophole is to cap contributions from any beneficial owner at $5,000 per candidate. The beneficial owner is the person or corporation which actually controls subsidiaries. This cap gets to the problem of rich people, unions or corporations creating dozens or hundreds of subsidiaries to funnel campaign contributions through. This is not close to happening in New York State because powerful interests here, and the politicians they are legally paying off, do not actually want to do anything to reduce the gusher of political cash. Less powerful, but still a big step forward, New York State could simply ban contributions from LLC’s the way New York City has.
Howard Milstein’s 149 LLC’s: If Cuomo LLC contribution cap passes he will “only” be able to contribute $745,000 via his existing LLCs
Howard Milstein is a very wealthy NYC real estate developer, and major political donor, who was appointed by Governor Cuomo to chair the board of the NYS Thruway Authority. By our count, Milstein’s 2013 state ethics disclosure form shows he has sole control over at least 149 LLCs. If Governor Cuomo’s LLC cap on LLC was to pass, Milstein would be limited to contributing “only” 149 x $5,000 or $745,000 per state candidate, plus that amount to county or state party accounts — plus, Milstein could easily create hundreds or thousands of new LLC’s if he wanted to. (Some online app will create an LLC for you for only $75. ) Milstein’s JCOPE form is a window into the LLC empires that major NYC real estate developers all have — but unlike him, they have not had to file a disclosure form.