An Upper East Side Assembly Candidate Accepted Over $10,000 in Illegal Corporate Cash

In a particularly brazen example of the widespread flouting of a campaign finance law meant to reduce corporate dark money in New York elections, a candidate for the New York state legislature accepted two illegal five-figure corporate contributions in recent months, according to a review of campaign finance filings by New York Focus.

Russell Squire, a community board chair and former corporate lawyer who is running for the Upper East Side state Assembly seat being vacated by Assemblymember Dan Quart (D-Manhattan), received $10,000 in 2021 and another $10,000 in 2022 from an LLC named “Tekmerion Capital GP.” Squire’s brother, Zachary Squire, is currently the Chief Investment Officer of Tekmerion Capital, a hedge fund that he founded in 2017. Tekmerion Capital did not respond to a request for comment.

The donations violated both a 2019 state law capping most corporate political contributions at $5,000 per company per calendar year and a separate law capping most contributors’ gifts to individual state Assembly races at $4,700 in the primary election and another $4,700 in the general election. And in an additional violation of the 2019 law, the campaign did not disclose the owners of the LLC.

Asked about the contributions, Squire’s campaign initially denied any wrongdoing. “The campaign is proud of the depth and breadth of support it has received over the past few months and has always followed all contribution regulations,” campaign manager Jin Choi said in a statement to New York Focus.

A spokesperson for the state Board of Elections confirmed that the donations were illegal, and said the campaign could resolve the issue by returning the $10,600 in excess cash before New York’s June 28 primary.

A rival candidate for the open Assembly seat, Alex Bores, told New York Focus that he’s “calling on any candidate with illegal contributions to return them immediately.” 

“I call upon my fellow candidates to publicly reaffirm their commitment to campaign finance rules and ensure that their donors — especially close family donors — do the same,” said Bores, an engineer at a cybersecurity nonprofit. 

After this article was first published, the Squire campaign reversed its earlier position and announced that it would return the $10,600 of illegal contributions.

“Since the Board of Elections has clarified the interpretation [of campaign finance law], the campaign will be refunding the excess contribution,” Choi, the campaign manager, said in a statement. “We appreciate this matter being brought to our attention.”

Until relatively recently, the LLC donations wouldn’t have been illegal. Before 2019, the $5,000 cap on corporate contributions did not apply to LLCs, which were viewed in campaign finance law as individuals rather than corporations. That meant that corporations could use LLCs to anonymously contribute as much as $60,000 to as many candidates as their owners wanted—allowing tens of millions of dollars of corporate dark money to flow into New York’s elections year after year.

A 2019 reform law aimed to stem the tide by capping an LLC’s political contributions at $5,000 per calendar year, across all candidates. The law also mandates that both LLCs and the candidates receiving their donations disclose the owners of LLCs and attribute their contributions to the owners in proportion to how much of the company they each own.

The law reduced the amount of LLC cash in New York elections by several times. That’s because most of the hundreds of LLCs that make contributions each year have observed the $5,000 limit, although dozens continue to violate it, New York Focus reported last month. Last year, LLCs contributed over $350,000 in excess of their limits, with the worst offenders flooding elections with nearly $40,000 each.

But the brazenness of the gifts to Squire is unusual: the vast majority of these overcontributions were made in increments of $5,000 or less. Since the 2019 law was passed, it has been very rare for LLCs to give more than $5,000 to a single candidate.

When that has happened, most candidates have returned the money: In 2021, Governor Kathy Hochul received two donations from LLCs that violated the cap and returned the excess cash in both cases. Last July, Attorney General Letitia James returned $5,000 to Brookfield Properties LLC just two days after the company donated $10,000 to her campaign.

The law’s disclosure requirements have been much less successful. In 2021, over 90 percent of LLCs that made political contributions failed to comply with the requirement to disclose their owners to the Board of Elections, a New York Focus analysis found. Candidates are independently responsible for disclosing the individuals behind the LLC money they receive, but many have violated that requirement—including Hochul, whose last campaign filing included over $400,000 in anonymous corporate cash, New York Focus first reported in February.

Squire’s campaign did not disclose the individuals behind the donations from Tekmerion. Failure to include this attribution is a violation of campaign finance law, a Board of Elections’ spokesperson confirmed.

But it's not clear that Squire's campaign — or other campaigns that break New York’s laws governing LLC donations — will face any consequences.

The Board of Elections does not have the ability to punish LLCs that violate the legal limits on contributions. It does have the ability to fine campaigns, but it has shown little appetite to do so. The 2019 law has gone almost completely unenforced since its passage, New York Focus reported in March. In the wake of New York Focus’ reporting, the Board of Elections began notifying LLCs that had failed to comply with the disclosure requirements that they were in violation of the law, the first time it has made any moves towards enforcement.

Over twenty states and the federal government entirely ban LLCs and other corporations from contributing directly to candidates, a move that good government groups have called for New York to adopt as well.

Tom Speaker, a policy analyst at the non-partisan government watchdog Reinvent Albany, said that the elections board’s moves towards enforcement were encouraging, but that it’ll take much more to make campaigns and donors comply with the law.

“The BOE’s enforcement of campaign finance laws has historically been weak at best, nonexistent at worst, which is one reason NY elections often look like the Wild West,” he said.

One candidate who appeared to agree with that sentiment? Russell Squire. "For too long, New York has been without a functional ethics watchdog for elected officials," his policy platform says. "Russell will also work to reform and professionalize the Board of Elections."

This article has been updated to include an announcement made by the Squire campaign after initial publication.