NEW YORK

Fight brews over closing a key NY campaign loophole

Joseph Spector
Albany Bureau Chief
New York Gov. Andrew Cuomo talks to media members outside his office at the state Capitol on Tuesday, May 24, 2016, in Albany, N.Y. Cuomo says tightening campaign finance laws and fighting the heroin epidemic are two of his top priorities as lawmakers near adjournment.

ALBANY - With less than three weeks left in the legislative session, Republicans and Democrats are set to fight over whether to close a key campaign-finance loophole that essentially lets special interests pump unlimited cash into political campaigns.

Gov. Andrew Cuomo ramped up the debate recently when he introduced a package of bills to close the LLC loophole, which lets campaign contributors open up limited-liability companies to skirt campaign-finance limits.

Cuomo introduced eight bills that would all require LLCs to be categorized as traditional companies, which have a $5,000 contribution limit. The measures would also include strengthening disclosure laws for LLCs.

“The people of New York are demanding change, and it’s time we took action to restore the public trust by closing the LLC loophole and bringing fairness to our campaign finance system,” Cuomo said in a statement.

Senate Republicans rejected Cuomo's proposals, setting up a key battle before the legislative session is set to end June 16.

"A proposal to close the LLC loophole is a red herring that fails to fundamentally address the root cause of the problems that exist within our campaign-finance system, most notably a lack of enforcement, a lack of transparency, and a lack of full and honest disclosure," Senate Majority Leader John Flanagan, R-Suffolk County, said in a statement.

Republicans said the state should close a loophole that lets contributors funnel cash to county committees to skirt campaign-finance limits — an issue that is under state and federal investigation because of Democratic county-committee spending during the 2014 Senate races.

The LLC loophole has been one of the prime problems with big money that's pumped into New York's political system, critics contend.

More than $25 million was contributed through LLCs to state candidates in recent years, a review by Gannett's Albany Bureau found last year.

Cuomo has been the prime beneficiary. Of the $20 million Cuomo raised for his successful re-election bid in 2014, 20 percent came from LLCs, or about $4 million, Gannett's review found.

The Democratic governor told reporters he's offering "a menu selection" of ways to close the LLC loophole. The eight bills would apply to different offices, such as the Senate or Assembly or statewide offices. All eight would include the governor's race.

Democrats and good-government groups are pressing for the changes. The Assembly has passed a bill to close the LLC on several occasions, and Senate Democrats have backed it.

“We stand ready to close the LLC loophole for everyone," Senate Democratic Leader Andrea Stewart-Cousins, D-Yonkers, said in a statement. "Senate Democrats have been fighting to close this loophole for years only to be rebuffed by our Republican colleagues. The people of New York deserve a government that they can trust.”