Opinion: Cranley’s Cash Excess

It is not proper to hide individuals’ political contributions behind the anonymity of an LLC.

Jul 3, 2017 at 12:29 pm

John Cranley's mayoral campaign, already reeling from the primary loss, may have a money problem. In early June, the Charter Committee filed a formal complaint with the Ohio Elections Commission over his campaign’s accepting hundreds of thousands of dollars in the form of disguised or unattributed contributions by LLCs. 

Forming an LLC (Limited Liability Company) is legal and proper for many business reasons. 

But what is not proper is hiding individuals’ political contributions behind the anonymity of an LLC. That’s why Ohio law requires individual names be attached to each contribution. “The recipient of the contribution shall report the contribution by listing both the partnership or other unincorporated business and the name of the partner, owner, or member making the contribution.”

But Cranley’s campaign ignored this law, as did Simpson’s for a few contributions before the mayor’s race. 

(Full disclosure: I have been a supporter of Yvette Simpson since she was a student of mine at UC Law in 2003.)

Perhaps that problem can be fixed by amending the reports of the 200-plus LLC dark-money contributions to Cranley.  Since the complaint was filed, the Cranley campaign has done so, ascribing real names to the LLCs. At least now we know the people behind the money — and possibly their reason for giving anonymously. How many received favors or money from the city? Just look at the list.

But that’s only half the problem. Councilman Wendell Young filed a different complaint last week. This one was with the Cincinnati Elections Commission, because the many of the contributions violate Cincinnati’s campaign-donation limits.  Before the names were connected to the LLCs’ money, that was impossible to tell.

Once the names were revealed, it became clear that many are people who already given the maximum ($1,100) allowed under the Cincinnati Charter. 

For example, local developer Rob Smyjunas made contributions to Cranley from a personal checking account of $1,100 and contributions from the accounts of LLCs he owns totaling $5,200. His contributions exceed the $1,100/person limit by $5,200. Medpace executive August Troendle contributed $1,100 in his own name, and $8,800 from eight LLCs he owns., exceeding the limit by $8,800. Banker Louis Beck contributed $12,100 through LLCs he owns before the May primary, and another $13,200 from his LLCs days after the primary. His excess contributions total $23,100. And so it goes.

Cranley’s campaign cites a 2005 Cincinnati Elections Commission opinion that states that LLCs are people too, and as such can donate. Could someone really form 1,000 LLCs and give $1,100,000, which would totally frustrate the intent of the campaign limits? 

Of course not. That opinion was simply wrong. It quoted one part of the state law, but didn’t look at others.

The law specifically requires, for purposes of donation limits, “the contribution shall be considered to have been made by the partner, owner, or member” making it. The law covers just the case we have here — a candidate accepting contributions from an individual, then many more from LLCs owned by that same person. 

The latest complaint states that the Cranley overage is more than $260,000. And a new filing is due July 30, which will surely have more. 

To fix the problem, all candidates should 1) list the names of the individuals behind the LLCs, and 2) give back any money over the limits. The Elections Commission may fine a campaign an amount “equal to three times the excess contribution,” which would be three-quarters of a million dollars for Cranley. But I assume there would be no fine, as the mistake is partly the Commission’s fault.

But has Cranley already spent the money?

MARK P. PAINTER, a lifelong Cincinnatian, served as a judge for 30 years.