NEW YORK - Liberals and conservatives have joined in a lawsuit to close what both groups see as a gaping loophole in New York's state campaign finance rules.

It's called the "LLC loophole," created in 1996 when the state Board of Elections decided that Limited Liability Companies should be treated as individuals.

For example, said Brent Ferguson, a counsel in the Democracy Program at the Brennan Center for Justice says, in a governor's race, corporations are limited to contributions of $5,000 per election cycle, but individuals can give slightly more than $68,000.

"On top of that problem, people can control multiple LLCs," he said, "and then they can give up to that individual limit through each separate one."

Ferguson said the contributions flow through this loophole to both Republicans and Democrats, and past efforts to reform the rule have failed along party lines. The lawsuit contends that closing the LLC loophole would make politics more responsive to the voters.

The amount of cash flowing from LLCs has risen dramatically, reaching almost $55 million in just the [ast two election cycles. Under the current rules, it's difficult to know who's behind some of these large campaign contributions. Candidates are required to name individual contributors, Ferguson said, "but if an LLC gives a candidate money, the candidate just reports that as coming from an LLC. So, many times we don't know who the actual people behind those donations are."

The lawsuit, filed in state Supreme Court in Albany, asks the court to order the Board of Elections to rescind the LLC rule and reconsider the issue.

More information is online at brennancenter.org.


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Good-government groups are warning of big changes to the way federal campaigns are financed, after the U.S. Supreme Court agreed to hear a case initially brought by Vice President JD Vance and Republican fundraisers.

The case would affect campaigns for the presidency, as well as the House and Senate from every state, including California.

Hilary Braseth, executive director of the nonprofit watchdog organization OpenSecrets, said right now there are limits on how political parties spend campaign cash, which is why billions in undisclosed dark money currently flows to super PACS.

"What we might end up seeing is more donors now giving large sums of money directly to the parties and being able to coordinate directly with them in spending for that candidate running for federal office," Braseth explained.

The plaintiffs argued campaign donations are legally considered free speech, so current limits on the way it can be spent are unconstitutional. Right now parties can accept millions but cannot coordinate directly with the candidates' campaigns. Critics said the current rules are supposed to limit the possibility of a quid pro quo, where donors are rewarded with official action once a candidate takes office.

Braseth stressed this case could test the country's system of accountability to preserve free and fair elections.

"The one thing that both Democrats and Republicans can agree on is that there's too much money in politics," Braseth emphasized. "It's clear that there's a growing resentment on behalf of the public, in a vast majority of folks, for the amount of money."

In the 2024 presidential election, Elon Musk spent $277 million to back President Donald Trump and was later given control of the Department of Government Efficiency.


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The U.S. Supreme Court will consider arguments about removing spending caps between national political parties and individual candidates and watchdogs are taking a close look to see what potential outcomes would mean for states such as South Dakota.

On Monday, the nation's high court said it will hear arguments this fall. The National Republican senatorial Committee wants the court to lift restrictions on how much a political party spends on someone's campaign, if they are running for federal office.

Hilary Braseth, executive director of the nonpartisan watchdog organization OpenSecrets, said it is a big difference between the outcome of the controversial Citizens United ruling from 2010 concerning political action committees.

"Nowadays in elections, we often hear about super PACS," Braseth pointed out. "These groups are able to spend unlimited amounts, in so far, they don't directly coordinate with the candidates."

If the court sides with the plaintiffs, limits on coordinated spending would be a thing of the past. Supporters said it further advances free speech but skeptics countered it would worsen the problem with wealthy donors influencing politics. For federal races, rural states such as South Dakota have leaned more on out-of-state support. Braseth noted this case could fuel more of that activity, depending on the outcome.

Braseth suggested the dynamics of the case touch on the issue of fairness in representation. Meanwhile, the plaintiffs also argued removing restrictions would address "dark money" often associated with super PACS. However, Braseth pointed out it remains to be seen, adding there needs to be a concrete way of pulling back the curtains on campaign spending.

"We have got to have transparency around where that money is coming from, in order to maintain integrity in our governing systems," Braseth contended.

Braseth added even if it seems like "political noise," the case is worth paying attention to given how most voters feel about this broader issue.

"The one thing that both Democrats and Republicans across the U.S. can agree on is that a majority of folks think there's too much money in politics," Braseth stressed.

Pew Research Center said seven in 10 U.S. adults think there should be limits on election spending.


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Gov. Greg Abbott and Lt. Gov. Dan Patrick are at odds after the governor vetoed Senate Bill 3, legislation which would have banned the sale of consumable THC in Texas.

Banning products like gummies and vapes were a top priority of Patrick during the legislative session and he told lawmakers he would call a special session if a bill was not passed. Abbott vetoed the legislation just before the deadline and Patrick said he's puzzled.

"The last time I talked to the governor, in the capital before session he said don't worry about the bill," Patrick said. "He said your bill is fine. That's what he told me in front of witnesses. In fact, he asked a couple of lawyers on my staff; he said can you give me some answers I can give because when I sign this, I need some answers to give."

In a statement, Abbott said the bill was well intended but he vetoed it because it would have been challenged in court. He urged lawmakers to regulate THC like they do alcohol. THC is the active chemical in marijuana that provides users a "high."

During the legislative session many people testified they use the products to ease chronic pain and anxiety. Patrick noted he believes Abbott wants to legalize marijuana but said as long as he's lieutenant governor he will not let it happen.

"Who are we as a state?" Patrick asked. "[Do] we think we are going to attract business here if we got a bunch of people high on marijuana, at very high levels? Is that who wants to come here and build their plant here? Open up a business, move their family here? We're not Colorado, and we're not Oregon and we're not Washington State. We're Texas."

Patrick also criticized Abbott for not making his concerns known while the legislature was in session. The bill is on the agenda for a special session starting July 21.


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