Buying power

April 05, 2004

BELIEVE IT or not, Maryland has limits on political donations. Whether you are an individual or corporation, you can't give more than $4,000 to any one candidate or more than $10,000 to all candidates for state office during a four-year election cycle. So how come certain business owners have been able to fork over as much as $130,000 to politicos without breaking the law?

Simple. They take advantage of a loophole. They funnel their donations through LLCs - limited liability companies. It's not unusual for a private company to control multiple LLCs - they're ideal for reducing liability insurance costs (and for reducing certain taxes). But here's where the problem starts. Joe Boxorocks Enterprises may have several LLCs. By donating as an individual and through his LLCs, Mr. Boxorocks can give four times as much money to candidates. That's a big advantage - not just over the average person but over other types of businesses, too. Not every company can structure its finances this way.

A recent study by Common Cause Maryland noted that track owner William Rickman Jr. has been able to donate more than $130,000 since 1999 through his 10 LLCs (as well as through his construction company and members of his family). That gives Mr. Rickman a pretty loud voice in Annapolis, where he's lobbied aggressively for legalizing slot machines at racing facilities.

FOR THE RECORD - An editorial yesterday incorrectly stated the House of Delegates' final vote on legislation restricting political contributions by limited liability companies. The bill passed 78-57. The Sun regrets the error.

Del. Elizabeth Bobo, a Howard County Democrat, has offered legislation to help correct the problem. Her bill would ban the multiple-LLC donor practice. LLCs owned by the same principals would be restricted collectively instead of individually, so Mr. Boxorocks couldn't circumvent Maryland's campaign finance laws. The legislation squeaked past the House of Delegates last month, 69-68. It's scheduled to have a hearing before the Senate Education, Health and Environmental Affairs Committee on Thursday, a mere four days before the end of the legislative session.

Similar legislation died in the same committee last year, but proponents think it could be close this time - if it gets a vote at all. The bill's fate, they say, rests in the hands of the committee's chair, Democratic Sen. Paula C. Hollinger of Baltimore County, who opposed it last year. We urge her to reconsider and support this badly needed legislation.

Incumbents are always loath to restrict campaign donations; it means they'll have to work that much harder to raise money for their own political aspirations. But this is a matter of fairness. The current loophole benefits certain private businesses in a manner that is grossly inequitable.

The debate over slot machines has raised the ante on ethics in Annapolis. Senator Hollinger and her fellow lawmakers need to show voters that good government takes priority over big donations.

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