Gov. Cuomo: Close the LLC "landlord loophole"!

 

Will landlords survive campaign finance reform?
Real estate loophole must be closed

We are mere days away from the close of the 2013 legislative session. The session must not end without enactment of meaningful campaign finance reform.

Governor Andrew Cuomo and Assembly Speaker Sheldon Silver are pushing a package of reforms, the most important of which would establish a program of matching public funds for candidates who agree to limit their spending, similar to the New York City program. The Assembly has passed a bill containing this and other reforms.


The Senate Republicans are stonewalling, as they are the major beneficiaries of the current loose system, where big money interests will give them unlimited amounts of campaign cash to help them hold onto their waning grip on power. The rogue Democrats who call themselves the Independent Democratic Conference claim to be in favor of significant campaign finance reform but are unwilling to force their G.O.P. allies to allow a vote, despite the IDC promise that their “bipartisan” union would produce progressive results.

A loophole in our campaign finance laws that is essentially exclusive to real estate must be part of a final package. Election lawyers call this “the LLC loophole.” Landlords who own numerous apartment buildings can set up a Limited Liability Company as the technical owner of each building. Each LLC can then make campaign contributions up to the limit that applies to individual contributors, currently $150,000 for each calendar year. This allowed a real estate baron such as Leonard Litwin of Glenwood Management to give almost $2 million to various candidates and committees in the 2011-2012 election cycle.

Unfortunately the Assembly bill introduced by Speaker Silver does not include language closing the LLC loophole. In past years, Silver’s campaign finance reform did close the LLC loophole; it is not clear why he dropped this provision. Fortunately the bill introduced by the Governor does contain language repealing the LLC loophole.

Legislation that does not close the LLC loophole would not be worthy to be called reform. Leaving this loophole in place would allow landlords to continue to flood our election system with millions of dollars every two years. Landlord cash to candidates for state office is the main reason tenants get continually clobbered in legislative fights in Albany.

With an election looming next year and the state rent laws up for renewal in exactly two years (June 15, 2015), tenants and our supporters in the Legislature must make sure that any final negotiated bill closes the LLC loophole.

Issued by:
Real Rent Reform Campaign
c/o Metropolitan Council on Housing
339 Lafayette Street   New York, N.Y. 10012
For information: Jaron Benjamin (718) 864-3932  jaron@metcouncilonhousing.org