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Cuomo Presses For LLC Loophole Closure

Mike Groll

New York Andrew Governor Cuomo has released a bill on closing a loophole that allows for unlimited big money donations to candidates. The “LLC loophole” has played a key role in the federal corruption trials of both former leaders of the Legislature, and may be a factor in the ongoing federal probe of the governor’s economic development projects.

Cuomo normally prefers to negotiate quietly with legislative leaders on proposals before actually penning legislation, but this time he’s written eight different versions of a bill to close the campaign donation loophole that allows unlimited contributions from limited liability companies (LLCs), and he’s presented it to the legislature. The governor says the bills range from banning LLC money just for the race for governor, to extending it to all contests for state political office.

“It’s an a la carte menu selection,” said Cuomo, who said he’s willing to “go first” and is “willing to go it alone” in a governor’s campaign.

Cuomo has already said he’ll run for re-election in 2018, and has several million dollars in his campaign fund.

Senate Republicans oppose the idea though, and just moments after the governor’s announcement, Senate GOP Leader John Flanagan, in a statement, shot down the proposals, calling them a “red herring.” He said any reforms of the campaign finance system need to be more comprehensive and address several other issues, too.

Undeterred, Cuomo says he’ll roll out more ideas and press for them in the final weeks of the session.

“I want to make the point, issue by issue, to actually drum it home,” Cuomo said.

Those items will include term limits, limiting lawmakers’ outside income, and requiring elected officials convicted of felonies to forfeit their pensions.

Reform groups are encouraged. Blair Horner, with the New York Public Interest Research Group, says it’s an attempt to break the gridlock on ethics changes.

“We’re hoping it’s not the classic end of session blame game,” Horner said. “It’s hopefully the first signs of life for the ethics reforms that are desperately needed.”

But Horner says the governor should be doing more to mobilize the public support for ethics reforms. A recent Siena College poll found 97 percent of the public want state government cleaned up and view it as a top priority.

Earlier this year Cuomo organized a series of statewide rallies, and a bus tour to promote raising the minimum wage and partial paid family leave. The governor says that kind of campaign is not appropriate in this case.

“A quote, unquote campaign on ethics is not really effective,” said Cuomo. “Just by the nature of the subject, it’s technical, it’s difficult.”

The governor’s push for reform comes as the federal probe of his own economic development programs continues. Cuomo has hired his own investigator to conduct an internal probe, but the governor has so far been reluctant to reveal how much former prosecutor Bart Schwartz will be paid, or whether Schwartz will even release a final report. He says the contract is still being finalized.

“I don’t know what his standard protocol is,” said Cuomo. “I wouldn’t have a problem with it, but I don’t know how he operates.”

A spokesman later clarified that the report will be made public unless it interferes with the U.S. attorney’s work.

Como says he personally has not been questioned in the ongoing federal probe. 

Karen has covered state government and politics for New York State Public Radio, a network of 10 New York and Connecticut stations, since 1990. She is also a regular contributor to the statewide public television program about New York State government, New York Now. She appears on the reporter’s roundtable segment, and interviews newsmakers.