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Hall Monitor: Corporations can't donate to Pa political campaigns - except when they can?
Last week, Hall Monitor noted that corporations appeared to have donated to several local political campaigns - even though state law explicitly forbids corporations to donate to political campaigns.
Hall Monitor: Corporations can't donate to Pa political campaigns — except when they can?
Last week, Hall Monitor noted that corporations appeared to have donated to several local political campaigns — even though state law explicitly forbids corporations to donate to political campaigns.
In a state that imposes no limits — nope, none — on individual campaign contributions, the law forbidding corporate donations is one of the few barriers (nominal though it often is) in Pennsylvania to the outright buying of elections by corporate interests.
But there appear to be some holes even in that thin wall. And the closer you look, the stranger the whole thing gets.
Take the case I posed last week, of a $10,000 donation by "United Homes Builder, LLC" to the campaign of City Councilman (and, now, Council President) Darrell Clarke.
State law dictates that:
It is unlawful for any National or State bank, or any corporation, incorporated under the laws of this or any other state or any foreign country or any unincorporated association, except those corporations formed primarily for political purposes or as a political committee, to make a contribution or expenditure in connection with the election of any candidate or for any political purpose whatever ...
But a small clause in the state's election campaign laws (Section 1634 (25 P.S. § 3253), paragraph D) adds this tidbit to the equation:
A limited liability company that makes a contribution shall affirm to the recipient candidate or committee that the limited liability company is treated as a partnership for federal tax purposes and that the contribution from the limited liability company does not contain corporate funds.
Head spinning? So is Hall Monitor's. Apparently — and as confirmed by City Commissioners campaign finance specialist Tim Dowling and an official at the Department of State — a corporation can make a donation, as long as the money isn't the corporation's itself. It has to be an individual contribution, and the corporation must "affirm" in a written statement that this is the case.
But wait a minute — if the contribution is an individual (you might say "personal") contribution, why doesn't the "person" whose money is actually being donated have to disclose his or her name? Moreover, if the contribution isn't from the corporation itself, why shouldn't it be subject to the $2,600 limit on individual contributions instead of the $10,000 limit applied to political committees like PACs (which have to disclose their own finances)?
Hall Monitor doesn't have an answer yet.
And who's checking that these contributions are not, in fact, corporations? Nobody: neither the state, nor the city's Board of Ethics nor the City Commissioners require these "affirmations" that the money is personal be submitted along with campaign finance disclosures.
What I do have is a list of several contributions made in the name of LLCs that exceed the $2,600 individual limit for 2011.
NOTE: None of this is to say these contributions are illegal, unethical, or anything of the sort: according to the City Commissioner's Tim Dowling, as long as these donations have been accompanied by (accurate) "affirmations" that the money itself doesn't belong to a corporation, they're within the state guidelines.
Ok, Ready? (Source: Phila Dept. of Records)
— Mercator Advisors, LLC 1629 Locust Street Philadelphia, PA 19103 $8,000.00 May 5, 2011 Nutter for Mayor
— First Republic Abstract LLC 509 Swede Street Norristown, PA 19401 $80,000.00 May 25, 2011 Philadelphia Democratic Campaign Committee
— United Homes Builder LLC 6633 N. Broad St Philadelphia, PA 19126 $10,000.00 May 16, 2011 Friends of Darrell L. Clarke
— PHILADELPHIA RIVERBOAT LLC 870 N. Military Hwy - Suite 202 Norfolk, VA 23502-3650 $9,000.00 Jul 28, 2011 DONATUCCI 2007 COMMITTEE
— THE TASTY BRAONS LLC 301 59TH ST OCEAN CITY, NJ 8226 $25,250.00 Apr 28, 2011 FRIENDS OF GIOVANNI CAMPBELL —— * Correction/Clarification: Mr. Cambell informed CP that the above donation represented an in-kind, rather than cash donation. The company mentioned produced a video for Mr. Campbell at no cost. It should also be noted that as a candidate for a state-wide (versus City-wide) position, Mr. Campbell is not subject to the city's campaign donation limits.
— Cosan LLC 920 Wayland Circle Bensalem, PA 19020 $5,200.00 Apr 4, 2011 Friends of Maria
— R. Burns LLC 8321 New Second St Elkins Park, PA 19027-1732 $4,000.00 May 2, 2011 Friends of Maria
— Dan Onorato for Governor LLC 310 Grant Street 17th Fl Pittsburgh, PA 15219 $4,000.00 Feb 28, 2011 Waste Management Employees Better Government Fund
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