The New York Times ran a story this morning highlighting the jump in political giving from limited liability corporations in the last few years. Donations from LLCs went from less than $5 million per year from 1999 to 2005 to almost $12 million in 2006.
The Times reports that the state Board of Elections followed the lead of the federal government and began treating LLCs as separate from their parent company or controlling partners in the mid-1990s. This means that individuals and corporations can skirt New York's contribution limits by donating to parties and candidates through their LLCs. Governor Spitzer's campaign finance reform proposal would ban LLCs from making campaign donations.
Unfortunately, the Board failed to continue following the federal lead several years later when federal rules were tightened to count all LLC donations toward the limit on the controlling individuals.
When asked why New York's rule wasn't similarly revisited, Board spokesman Lee Daghlian said, "It probably was not revisited because no one asked that it be done."
Then let's get asking! This change would by no means count as comprehensive campaign finance reform, but it would close up a significant loophole.