Bill bans political donations from ‘Series LLCs’

A bill to prohibit Tennessee campaign contributions from Series Limited Liability Companies has won initial committee approval under sponsorship of Rep. Matthew Hill, reports the Kingsport Times-News.

Hill, R-Jonesborough, described a Series LLC as kind of like a “baby LLC” that could be used for laundering illegal campaign contributions.

“If someone wanted to get a hundred checks from a hundred Series LLCs of $1,500 each, they can currently do that in the state of Tennessee,” Hill told the committee. “That is obviously against the spirit of what is intended when it comes to allowing LLCs to contribute to political campaigns.”

…Hill had no information on how much campaign funds are coming from Series LLCs.

“But if there is any funneling activity going on, it will immediately end if this bill becomes law,” Hill added.

Drew Rawlins, the bureau’s executive director, testified the bureau had no position on Hill’s bill (HB2187).

“I think the concern is that when PACs (political action committees) give you contributions, you can go back and look at that PAC and see where the funds came from if you wish to do that,” Rawlins told lawmakers. “With LLCs, you don’t know, the public doesn’t know where the funds came from to fund those contributions and I think that’s the purpose of Representative Hill’s bill.”

Rawlins noted the news media and public would probably be the bill’s enforcers.

“I don’t envision us, to be honest, unless it’s the will of the legislature, to look over every LLC contribution on every report and try to determine whether it’s a Series LLC,” Rawlins explained. “We don’t have a lot of LLC contributions but there’s enough out there that it would take a good bit of time to go through every report and look at every LLC contribution … (but) we do not know where the LLC funds come from.”

In Tennessee, individuals and LLCs can contribute up to $1,500, while PACs can give up to $7,500 to legislative candidates per election.