Getting Around the Political Contribution Limit is Easier Without Corporate Identifiers


Back in May, Roll Call ran a story on how one family, through various subsidiaries of their family business, donated $60,000 to Congressman Don Young’s legal defense fund. The normal limit is $5,000, but using twelve corporate entities, they were able to legally donate $60,000. Yesterday, the House Ethics Committee concluded that Rep. Young had not violated the letter of the law, since the contributions came from twelve distinct entities. However, they did revise the regulation going forward:

However, the Committee is concerned that the identical ownership of the twelve entities challenges the principles of the contribution limits of the 1996 LEF Regulations. To that end, the Committee has simultaneously adopted revised LEF Regulations that, among other changes and clarifications, attributes contributions by certain types of entities, such as LLCs, to the owners of those entities. The revised LEF Regulations will take effect on January 1, 2012, and will apply to all existing legal expense funds and all legal expense funds approved by the Committee in the future.

According to the initial story, the reporter was able to piece together the ownership from comparing the addresses of these companies. In some cases they were the same, in others they were just nearby. This kind of process could be automated and flag contributions for human review, IF we had a reliable system for legal identifiers and corporate ownership information. I wonder how possible it will be to enforce this new rule very widely, without this kind of information.

For more information on (the lack of) corporate identifiers and the implications, check out Six Degrees of Corporations, or a guest post by the founder of OpenCorporates.