Shedding Light on Dark Money:   How the Wealthy Use LLCs to Circumvent Personal Donation Limits

The American Democracy Minute Radio Report & Podcast for March 28, 2023

Today’s Links

Articles & Resources:

NH Public Radio – Loophole and Connections Help Gatsas Raise Big Dollars for Governor’s Race
NH Secretary of State’s Office – “Friends of Chris Sununu” 2018  Campaign Finance Report
Seattle University School of Law – The (Dunkin’) Donut Hole: Fixing the LLC Loophole in State Campaign Finance Laws—A New Hampshire Exemplar
Wiley Law Newsletter – Change in New York Campaign Finance Laws: Closing the LLC Loophole and Aggressive Campaign Finance/Pay-to-Play Proposals

New York Focus – Hochul Campaign Donors Blow Past Corporate Contribution Limits

Follow the Money – States Which Allow Direct Corporate Contributions to Candidates
Open Secrets – Dark Money Basics
Brennan Center for Justice – Dark Money in the 2020 Election
Issue One – What is Dark Money?
Issue One – Dark Money & Super PACs
National Conference of State Legislatures – Campaign Contribution Limits: Overview
National Conference of State Legislatures-  State Limits on Contributions to Candidates

Groups Taking Action 

End Citizens United, Common Cause, Issue One, Public Citizen, Free Speech for People, People for the American Way, Open Democracy Action (NH), Fair Elections NY

Today’s Script:  (Variations occur with audio due to editing for time) 

You’re listening to the American Democracy Minute, keeping YOUR government by and for the people.

Our Dark Money series has explored how the member stockholders of Limited Liability Corporations can use LLCs to HIDE their political donations.  Now we’ll see how the wealthy use the “LLC Loophole” to circumvent a state’s personal contribution limits.

Let’s say you’re a real estate developer and own multiple properties, each registered as an LLC.  You’ve personally given the maximum allowed by your state, but want to give more.  Enter the “LLC Loophole.” 

In many states, your LLC is allowed to donate, too, so you can give tens of thousands, or even hundreds of thousands more to your candidate.  And it’s likely the public will never know.

In New Hampshire, Republican Governor Chris Sununu received a pipeline of campaign cash from developers, real estate companies and other businesses over multiple campaign cycles.  In his 2016 race, 17 LLCs donated $7,000 each, controlled by one Dunkin’ Donuts franchisee.  In 2020, a real estate mogul used four LLCs to donate $20,000. 

Just last year, Democratic New York Governor Kathy Hochul accepted five $5,000 donations from LLCs tied to a single wine distributor, according to independent news site New York Focus.  That reporting shows, Hochul received $150,000 from LLCs tied to just nine corporations.  This, despite New York’s new campaign finance law designed to stop rich donors from getting around the rules.  

We have articles and explainers at AmericanDemocracyMinute.org.  I’m Brian Beihl.


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