The mockery of campaign finance laws evident in fundraising and spending among the Republican presidential candidates, most notably by Mitt Romney and Newt Gingrich, is imitated in D.C. elections. True, the city’s politics are on a different scale. Still, when it comes to finding ways to make ethically and legally questionable contributions, national GOP operatives have nothing on their District imitators.
To skirt the spirit, if not the letter, of the law on contribution limits, one common instrument both groups use both groups is the limited liability company (LLC). In business terms, an LLC shields the owner from personal liability, and all profits and losses pass directly to the owner without taxation of the LLC itself. What’s more, an LLC does not have to disclose the owner’s identity.
A single donor, therefore, can use LLCs to give sums many times the maximum an individual can contribute. It’s done by creating and using multiple LLCs under an owner or single entity to funnel multiple contributions to the same political campaign. That makes a joke of contribution caps.
A case in point: Muriel Bowser (D-Ward 4), who chairs the D.C. Council’s Government Operations Committee, which oversees the Office of Campaign Finance (OCF) and city election laws.
According to OCF records, Bowser’s reelection political committee, “Bowser 2012,” has received more than $25,000 from 70 LLCs.
Are these contributors individuals or corporations that do business with the city? Are there conflicts of interest or potential conflicts? Voters can’t tell the answers to these questions.
Do these contributions, though legal, violate the spirit of D.C. campaign finance laws?
Under the laws governing elections for ward council seats, Bowser cannot accept contributions from an individual that exceed $500 for the primary and general elections combined.
A recent OCF review of donations to political campaigns from LLC contributors with the same address shows that Bowser received a $500 check dated July 19, 2011, from Dantes Partners LLC signed by Buwa Binitie and a $500 check dated July 20, 2011, also signed by Binitie. Does that $1,000 exceed campaign limits?
Bowser 2012, the OCF found, also received two checks dated July 20, 2011, from Blue Skye Construction LLC and Blue Skye Development LLC. Both checks bear the same address.
Likewise, two $500 checks written to Bowser 2012 from AWA Holding LLC and Catherine D. Wash, both dated July 21, 2011, had the same address.
Bowser 2012 also received $500 checks from Dag Petroleum Suppliers LLC and from Rock Creek Petroleum LLC, both written on July 26, 2011. Those LLCs have the same address.
The review contained other examples of donations to Bowser 2012 from LLC contributors with the same address.
“Knowing to whom and for how much candidates are indebted is essential information,” a Post editorial stated this week. Unfortunately, District voters are being kept in the dark.
This week I wrote to Bowser, asking her to direct Bowser 2012 to disclose the identity of the owners or principal managers of the LLCs that have contributed to her reelection campaign. Here is the salient part of her response: “As a matter of law we have reported all corporate and LLC information required; as we are not required to report principals of LLCs, we do not collect that information.”
I sent a similar inquiry to council member Michael A. Brown (I-At Large), who is also on the Government Operations Committee and who, like Bowser, is seeking reelection. Thus far, Brown’s political committee, “Michael Brown 2012,” had received more than $8,000 from approximately two dozen LLCs. Brown’s campaign committee e-mailed me Friday that “The Michael Brown 2012 re-election campaign is in full compliance with all laws and regulations related to the reporting of campaign contributions and expenditures.”
Money from virtually anonymous sources is flowing into D.C. campaigns, mocking the limits on political contributions. Why are we putting up with this?
One way to block the influence of moneyed interests is, of course, to ban corporate and LLC contributions. Short of that, we must impose greater transparency.
New Jersey election laws, for example, prohibit LLCs from making contributions as entities. Any contribution drawn on an LLC account must be signed by a partner or member and is treated as a contribution from the partner or member who has signed the check. That’s a better way to respect contribution limits.
At the national level, LLCs fuel a fat-cat action plan. In the District, they are used as an incumbent-protection program. Both insult democracy.
The super PACs of GOP presidential candidates and affiliated LLCs may be out of reach for us regular D.C. residents. But D.C. elected officials and weak D.C. campaign finance laws are within arm’s length. It’s time for D.C. residents to push back.