Cuomo: It’s time to close LLC Loophole


Assembly man Brian Kavanagh has been pushing to close the LLC Loophole.

By Sabina Mollot


On Wednesday, Governor Andrew Cuomo said it was time to close the infamous LLC Loophole.

It was while making his State of the State address that Cuomo said that as far as the LLC Loophole is concerned, “The time for debate has passed. I call on the legislature to close the LLC Loophole. Pass it and I will sign it the very same day.”

He went on to say how there was a time when legislators, at the end of the day at the Capitol, went home to work on their farms. But nowadays, the governor said, they leave for their law firms, which is a recipe for conflict. He then proposed adopting the Congressional system of limiting outside income for legislators. He also acknowledged that the current campaign finance system makes it impossible for a candidate without funds to get anywhere. “We should encourage new participation,” he said, and also went on to say taxpayer money should not be used to pay the pensions of legislators who’ve been convicted of crimes relating to their jobs.

“2015 was a tough year. It was an ugly year on many levels,” said Cuomo, no doubt in reference to the Dean Skelos and Sheldon Silver corruption cases.

The statements from Cuomo on the issue and other matters concerning ethics reform in Albany came two days after Assembly Member Brian Kavanagh and State Senator Daniel Squadron had called on Cuomo to make sure the LLC Loophole gets closed by including that goal in his executive budget. They also asked him to make sure it stays there until the budget is finalized.

Kavanagh and Squadron made their plea in a letter that was co-signed by 42 other Assembly members and senators.

In the letter, they noted how a legislative push to close the loophole has been supported by the Assembly. However, a vote for it was blocked last year by the Senate. The controversial loophole has allowed political donors, many in the real estate industry, to give astronomical amounts to candidates, while also allowing them to mask their identities through limited liability corporations.

“As you know,” Squadron and Kavanagh wrote to Cuomo, “the LLC Loophole doesn’t just enable wealthier people to give greater contributions, but enables contributors to exploit it to circumvent the contribution limits that apply to other individuals and businesses, often without even disclosing their true identities, making a mockery of fairness and transparency in our campaign finance system.”

Kavanagh, a sponsor of the bill to close the LLC Loophole along with Squadron, added, “The budget negotiations are our best opportunity for success in 2016 and we’re committed to working with the governor to seize that opportunity.”

In response to the governor’s statements, Kavanagh said he believes this means Cuomo will include it in the budget.

“I think it’s great that the governor has renewed his commitment and we look forward to working with him to make sure we get it done,” he said.

State Senator Brad Hoylman also cheered the statements, including the one about restricting legislator moonlighting, which is a bill he sponsored.

He said he thought the reforms would get supported by his colleagues, noting that if they didn’t, they’d regret it.

“If they don’t stand up for ethics reform, they’re going to be hurt at the ballot box,” said Hoylman.

Meanwhile, Mike McKee, treasurer and spokesperson for TenantsPAC, told T&V he was skeptical about the governor’s intentions.

“He’s been saying that for three years,” said McKee.

“If he’s really serious about it, he’ll put it in the budget, but I’m very dubious because of all the elected officials in New York State, he’s the one who benefitted the most from the LLC Loophole. Once again it’s a question of Andrew Cuomo saying one thing and doing another.”

5 thoughts on “Cuomo: It’s time to close LLC Loophole

  1. Pretty funny, Governor Glenwood!

    How many of those Leonard Litwin’s LLC’s rolled up into that cool $1 million your campaign took in? Not that that had anything to do with your efforts to squash strengthening rent regulations, or keep the State Senate in the Republican’s control, right?

    Your dad would be appalled at your blatant hypocrisy.

  2. Pingback: What a Democratic State Senate means for tenants | Town & Village

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