Closing The LLC Loophole
BY LEGISLATOR JAY HOOD (D-Haverstraw)
Rockland County Legislature
The current law allows anyone who creates an LLC, which costs just $200 to form in New York State, to anonymously contribute tens of thousands of dollars to candidates and political parties, or buy up real estate without neighbors ever knowing their name.The integrity of the political process is threatened when an individual who wishes to remain anonymous can cut an enormous check through an LLC that can change the outcome of an election.
Our campaign finance system requires that all contributions be publicly reported, including the names and addresses of each contributor. However, when it comes to contributions from an LLC entity, only the name of the LLC need be reported, making an LLC a perfect vehicle for those wishing to use subterfuge to change the outcome of elections.
Another issue concerning the LLC loophole is the purchase and holding of real estate under an anonymous LLC name. Some developers purchase land, apply for down-zoning and other permits, and develop the entire property, without anyone ever knowing who is behind the development. Then, once a property is developed, building inspectors have a hard time delivering violations since they can’t identify the actual owner of a property. With an LLC, a slumlord can effectively skirt important housing laws and avoid prosecution, which places their tenants and entire neighborhood in jeopardy.
Whether for real estate or campaign contributions, if one were to try to find any record of the true identity of the name of the person who created an LLC, they would be unsuccessful. This is a virus begging for a remedy.
Recently I introduced a resolution in the County Legislature, which passed unanimously, to support the state legislation sponsored by Assemblymen Zebrowski and Skoufis. Their bill would require that the names and residential addresses of every LLC owner be made public. This law would effectively lift the veil on anonymous political donors and real estate owners. I thank my fellow Legislators for their support of this common sense resolution.
We cannot restore the confidence of a justly cynical public by allowing special interests to remain anonymous and have such major impacts on our communities and our governments. I hope that the NYS Legislature will act quickly to close the LLC loophole, so that we can have greater transparency where we need it most.