Join the Movement for Campaign Finance Reform
One of this year’s most important, if not the most important, campaign for tenants is the fight to curb the influence of big money in New York State elections. Real estate throws more money at candidates for elected office than any other industry.
The sheer numbers are staggering. In 2010, candidates for state office (governor, comptroller, state Senate and Assembly) raked in $246 million in total campaign contributions. Less than 0.5 percent of New York residents made contributions, and only 7 percent of the total came from donations of $250 or less. New York State campaign finance laws are riddled with loopholes. Election lawyers refer to one used by the real estate industry as the “LLC loophole.” A Limited Liability Company is a corporation-like entity, but is not bound by the $5,000 limit on corporate contributions. Many landlords set up an LLC for each of their separate properties. This lets them make hundreds of thousands of dollars in campaign contributions each year.
Leonard Litwin is the poster child for this abuse. His Glenwood Management Corp. has a large portfolio of luxury apartment buildings, each one legally a separate LLC. Each LLC can contribute up to $150,000 a year. Litwin, 98 years old with an estimated net worth of roughly $1 billion, has been especially generous to New York politicians. In the 2009-2010 state election cycle, his various LLCs donated almost $1 million to candidates running for offices in New York.
A favorite Litwin politician was former state Senator Carl Kruger of Brooklyn, a landlord stooge now serving a seven-year term in federal prison for accepting bribes. On the very same day, September 27, 2010, the 1737 York Realty LLC, the 425 East 72 Street LLC, and the 56th Realty LLC each gave “Friends of Carl” a check for $9,500, the maximum a Senate candidate could accept that year. Many other Glenwood LLCs also contributed to Kruger. On June 3, 2009, five Litwin LLCs gave Friends of Carl $5,000, and a sixth LLC gave $7,500.
In the 2011-2012 election cycle, Litwin’s LLCs doled out close to $2 million. He gave $40,000 to Eric Ulrich, who unsuccessfully challenged Democratic incumbent Joe Addabbo in Queens; $55,000 to slumlord Bob Cohen, who lost an open Westchester seat to Democrat George Latimer; $60,000 to George Amedore, who lost to Democrat Cecilia Tkaczyk in an open seat in the rural areas west and south of Albany; and $45,000 to Republican leader Dean Skelos, who had token opposition.
Governor Andrew Cuomo has raked in the Litwin dough, as has state Senator Jeff Klein, leader of the Independent Democratic Caucus that entered into a power-sharing arrangement with the Republicans. Litwin’s LLCs have also given hundreds of thousands of dollars to the Neighborhood Preservation Political Action Fund, a front for the Rent Stabilization Association, the landlord trade group, which funneled the money to anti-tenant candidates.
Where did Leonard Litwin get the money to make all these campaign contributions? From rents paid by his tenants, of course.
Public financing combined with strong nonpartisan oversight, lower contribution limits, and closing the LLC loophole will put elections back in the hands of everyday New Yorkers and diminish the power of big money. With the next expiration of the state rent laws only two years away, in June 2015, and with an election the year before, this is a fight tenants should join.
To get involved with the campaign for fair elections, contact Jaron Benjamin at Met Council, jaron [at]metcouncilonhousing.org; (212)979-6238 ext. 201.