Now here's a gigantic hole in the campaign finance dam:
As a candidate for governor of New York, Eliot Spitzer is barred from taking more than $50,100 from any single donor.
But that has not stopped wealthy donors from legally circumventing these state contribution limits to shower six-figure donations on the Spitzer campaign. Their technique? Using limited liability corporations as a vehicle to give well above the maximum the state allows.
In fact, this year's statewide political campaigns are awash with donations from L.L.C.'s, which are business entities that can be set up for as little as a couple of hundred dollars and provide special tax benefits and limits on financial liability. Six of the eight major-party candidates for governor or attorney general have taken donations from individuals who have contributed the maximum and then donated further through L.L.C.'s.
The donations are legal in New York State races, but restrictions have been put on them at the federal level and in New York City races.....
New York’s limit of $50,100 per candidate is already the highest among the 37 states that have a donation limit and far above the $2,100 limit for federal campaigns, according to a recent study by the Brennan Center for Justice at New York University's School of Law. While corporations have a donation limit of $5,000, L.L.C.'s have the same limit as individuals in New York State....
It is not clear how many of the L.L.C.'s are legitimate businesses - many clearly are - and how many are simply set up as a channel for donations. But there is nothing to prevent an individual from setting up multiple L.L.C.'s for the express purpose of donating well beyond the individual limit, according to the State Board of Elections.
I guess we have something new to ask candidates: whether they'll put a stop to this nonsense. New York's campaign finance laws need a complete overhaul.Posted by simon at August 4, 2006 8:08 AM in politics (state)