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Cincinnati City Councilman John Cranley has discovered a loophole in the city’s campaign finance reform rules which allow an individual to write multiple checks to a candidate and far exceed the $1000 limit.  An August 2, 2005 opinion by the Cincinnati Election Commission in response to a question by his campaign states that an individual who owns multiple “limited liability” companies can make a thousand dollar contribution to a candidate from each company, as well as individually.  So if an individual owns, say 5 such companies, that person can contribute up to $6,000 to one candidate.

Limited Liability Companies, or LLC’s, are relatively easy to set up and may be owned by one person or by two or more individuals.  They are are often smaller than companies that are “incorporated.” The former typically have “LLC” after their name, such as, Victoria Group, LLC.  If “Victoria Group” were incorporated, it cannot have “LLC” after its name but may use “inc.,” as Victoria Group, Inc.  There are several differences between the two with how they are treated under the law, including that Victoria Group, LLC could make campaign contributions while Victoria Group, Inc. cannot.

John Cranley’s 2005 list of contributors gives an example of how this may work in practice.  The Cincinnati Election Commission records that a Dan Schimberg wrote a check for $500 from Aristo Properties, LLC on July 27, 2005 after a Dan Schimberg wrote a check personally for $1000 on April 29.  Further research shows that it is likely that these two checks were written by the same Dan Schimberg.

The Cincinnati Elections Commission does require that the name of the person within the LLC who gave the money be reported, and says that an LLC created just for the purpose of making contributions would not be allowed.  There are no contribution limits for city council candidates in the Ohio Revised Code.  The only limits come from the Cincinnati City Charter. Article XIII of the charter limits campaign contributions to $1000 per person per candidate for council.

Ohio campaign law has allowed contributions from LLC’s, so the ruling from the Cincinnati Elections Commission is consistent with that part.  But I don’t think the voters knew when they approved Article XIII that the words “per person” could also mean multiple “personalities” if LLC’s are included.

This is just another illustration of the principle that lawmakers seldom write a law without loopholes.

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