Hochul’s ‘transparency’ vow called into question over campaign finance practices

Gov. Kathy Hochul’s pledge to be “fully transparent” has become a target for her detractors seizing on a string of revelations about her fundraising practices – the latest of which found she didn’t adhere to the mantra when it came to recording some high-dollar donors. 

An investigation by New York Focus and The City revealed elected officials in New York have continued to collect money from nameless donors in violation of a 2019 law that required the disclosure of limited liability company owners who gave money to political campaigns. Hochul was among the biggest benefactors of LLC money in 2021, and did not meet the new requirements for a majority of the donations, the investigation found. 

Hochul raised a record-breaking $22 million for her re-election campaign in the five months after former Gov. Andrew Cuomo’s resignation. Nearly $400,000 of her fundraising total last year reportedly came from LLCs whose owners were not disclosed to the Board of Elections by Hochul or the companies. 

At least some of the LLCs who donated to Hochul have benefitted from her policies, including more than 60 LLCs affiliated with nursing homes and other health groups who had many of their demands met in Hochul’s state budget proposal, the New York Times reported. Gambling companies and the hotel industry are also among the major Hochul donors who were positively impacted by the state budget plan. 

Hochul’s reported failure to meet the new requirements was revealed before she is set to host what’s been described as a “small, private” fundraising dinner on Thursday with Lt. Gov. Brian Benjamin where guests paid up to $45,200 a ticket.

Her campaign declined comment to New York Focus and The City regarding the LLC recording issues. A spokesperson said previously that “campaign contributions have no influence on government decisions,” Jerrel Harvey told The Times in January.

When public filings revealed Hochul’s impressive war chest in January, state GOP Chairman Nick Langworthy accused Hochul of “selling state government out her back door” in her fundraising push. “Kathy Hochul is Andrew Cuomo 2.0 where crooked deals are cut with lobbyists and special interests in exchange for campaign cash and New Yorkers are the collateral damage,” he said in a statement last month.

Hochul challenger and Long Island Rep. Tom Suozzi’s campaign also capitalized on the opportunity to point out the contradiction between the reported LLC compliance issues and her “transparency” pledge. “She has the staff, she has $20 million in campaign funds, yet she refuses to use that staff or those funds to make sure she complied with the rules. What is she hiding?” spokesperson Jason Elan in a statement to New York Focus and The City.

The 2019 disclosure law was intended to close what was referred to as the “LLC loophole,” which allowed the companies to contribute up to $60,000 to candidates each year. Individuals could donate to multiple candidates, multiple times by forming additional LLCs, which anyone can easily create. The reforms capped LLC donations to candidates at $5,000 and required companies to report the owners of the LLCs to the state Board of Elections, with donations attributed to ownership stake. Campaigns are also required to record the same information. New York Focus and The City found that the compliance rate with the 2019 law for the 2,600 LLCs that made donations to political campaigns in New York in 2021 was about 10%.

The state Board of Elections, when asked about the violations, reportedly blamed a lack of enforcement on Cuomo appointee Risa Sugarman, who stepped down from her role as BOE chief enforcement lawyer in January last year.

Cuomo is eyeing a new run for office, thanks, in part, to another leeway in New York’s campaign finance laws. Cuomo has $16 million on hand, and he’s free to use it for a future campaign in New York state. “The law is not precise when it comes to the use of excess campaign funds,” campaign finance law expert Kenneth Gross told The New York Times. “How they can be used depends on the facts.”

Additional reporting by Zach Williams