Wednesday, June 02, 2010

Ali vs. King on the LLC Loophole

In their Political Pulse debate, Senator Nancy King (D-39) and challenger Delegate Saqib Ali discuss the LLC loophole on campaign finance.

This requires some background.

The LLC loophole allows corporate entities to contribute up to $4,000 each to a candidate per cycle even if they are related by common ownership. When one owner controls a lot of LLCs, those companies can steer massive amounts to candidates of their choice. We have studied numerous uses of this loophole, including by racetrack owner William Rickman, corrupt developer Ronald Lipscomb (who cooperated with prosecutors to bring down Baltimore Mayor Sheila Dixon), and apartment building owner David Hillman, who has contributed and loaned nearly one million dollars to Prince George’s County Executive candidate Rushern Baker. Common Cause has released two studies documenting how this loophole allows corporations to funnel millions of dollars to politicians.

Last year, we found that Rickman used the loophole to contribute $6,500 to King. Since then, one of his entities gave her an additional $2,000. Rickman has given FAR larger amounts to other politicians, including $14,625 to Bob Ehrlich and $13,000 to Martin O’Malley. Our intent was not to single out King, but Ali is legitimately raising the issue.

The LLC loophole is a MAJOR problem in county politics because developers often use LLCs to hold properties and write campaign checks. Senate candidate Cheryl Kagan has vowed to reject the practice in her campaign. Whether Ali, King or any other politician matches her pledge, we hope that they and everyone else running for state office in this county promises to vote to close the loophole once and for all. Because as long as the LLC loophole is open, corporations and their lobbyists will have an open door through which to frolic and cavort in Annapolis.