Watchdogs Ask State Board of Elections to Enforce Transparency Requirements for LLCs

Watchdog groups asked the State Board of Elections to expand its proposed regulations expediting enforcement proceedings for delinquent filers to include Limited Liability Companies (LLCs). LLCs are required to file statement of identity reports that show their beneficial owners. While the proposed regulations allow the Chief Enforcement Counsel to better ensure candidates and political committees file reports, the regulations fail to include LLCs.

In 2019, the State Legislature amended the election law to require LLCs to report their beneficial owners, but the Board of Elections was slow to enforce the law. The law helps ensure that owners of LLCs are not skirting campaign contribution limits through anonymous LLCs.

The groups are asking for better enforcement of LLC transparency by the State Board of Elections as the State Legislature is moving new legislation to require LLCs to report their beneficial owners to the Department of State (A3484-A (Gallagher)/S995-B (Hoylman-Sigal)). 

The letter is here and below.

May 25, 2023

VIA EMAIL

Brian L. Quail, Esq.
State Board of Elections
40 North Pearl Street, Suite 5
Albany, NY 12207-2729

Kevin Murphy, Esq.
State Board of Elections
40 North Pearl Street, Suite 5
Albany, NY 12207-2729

Re: Expand Regulations Expediting Enforcement for Delinquent Filers to Include LLC Statement of Identity Reports (I.D. No. SBE-13-23-00004-P)

Dear Mr. Quail and Mr. Murphy,

We support the proposed new regulations 6218.13, “Special Provisions For Failure to File Adjudications”1 to increase enforcement for failure to file required campaign disclosures, and ask you to expand its scope to include failure to file required statement of identity reports for Limited Liability Companies (LLCs) and Professional Limited Liability Companies (PLLCs) as required by Section 14-116 of the Election Law.

The Chief Enforcement Counsel position was created at the State Board of Elections with the intent to increase enforcement of campaign finance violations. Under the statute, the Chief Enforcement Counsel has wide responsibility for enforcing violations of Article 14 of the Election Law, as brought to them from the Compliance Unit or otherwise (see Sections 3-104 and 3-104-a of the Election Law). The Compliance Unit is responsible for monitoring all filings required under Article 14 of the Election Law, including Section 14-116 regarding LLC and corporate statement of identity reports that disclose their beneficial owners. 

Under Section 14-120, all campaign contributions must be made under the true name of the contributor, including the owners of LLCs. This section specifies that the Board of Elections “shall enact regulations that prevent the avoidance of the rules” regarding attribution of contributions to LLC owners. 

As written now, under 6218.13(a), the Chief Enforcement Counsel may only “present a list of committees and candidates” that have failed to file required reports. This language is limiting, as it does not include persons or corporations required to file statements of identity under Section 14-116 of the Election Law. 

We ask that you update the language to (additions in bold) “present a list of all committees, candidates, LIMITED LIABILITY COMPANIES, AND PERSONAL LIMITED LIABILITY COMPANIES” that have failed to file required reports, and ensure that it is inclusive of all reporting requirements under Article 14 of the Election Law.

Additionally, 6218.13(d) should be amended as follows (additions in bold): “This section shall apply exclusively to allegations of failure to file a required campaign financial disclosure report, A REQUIRED STATEMENT OF IDENTITY REPORT, OR OTHER REPORTS REQUIRED TO BE FILED pursuant to title one of article fourteen of the election law.” 

Thank you for your consideration. 

Sincerely,

Rachael Fauss
Senior Policy Advisor
Reinvent Albany

Ben Weinberg
Director of Public Policy
Citizens Union/Citizens Union Foundation

Susan Lerner
Executive Director
Common Cause/NY

Laura Ladd Bierman
Executive Director
League of Women Voters of New York State

Blair Horner
Executive Director
N.Y. Public Interest Research Group

Cc. Michael Johnson, Chief Enforcement Counsel, NYS Board of Elections

1 Published in the State Register on March 23, 2023.