A settlement struck in a lawsuit targeting the so-called “LLC loophole” in New York election law yielded a $10,000 penalty and could pave the way to future state cases challenging limited liability company donations.
Because this one was settled out of court, however, it’s unclear whether the strategy of the plaintiff, state Board of Elections Chief Enforcement Counsel Risa Sugarman, will ultimately hold up to legal scrutiny and curb donors’ long-term use of a quirk in election law. Still, legal experts said, the payment secured by Sugarman and the precedent of the settlement could act as a near-term deterrent to LLC giving.