Quietly last month the New York State Democratic Committee transferred $10 million to Governor Hochul’s re-election campaign warchest. You heard that right: $10 million. And the move was entirely legal.

How did the State Democratic Committee get that much money? It’s the result of a loophole in the state’s campaign finance law that most New Yorkers have never heard of, but Albany’s “fat cats” know very well.

First some background.

New York’s campaign finance law sets contribution limits for those running for state and local office. For someone running for governor, the limits are no more than $9,000 per donor for a primary election (if there is one) and no more than $9,000 for the general. Contribution ceilings are supposed to limit donor influence on parties and candidates.

New York, like much of America, has a campaign finance system that allows the knowledgeable contributor to skirt the rules. In this case, contributors can donate to so-called “party committees.” These obscure committees are controlled by the leadership of the political party or legislative conference (or local political committees).

These committees receive few contributions, but the amount can be enormous. It is perfectly legal in New York to write a check for as much as $138,600 to a political party committee. In addition, the party committee then can transfer as much as it wants to the candidate of its choice. That’s how the State Democratic Committee, effectively controlled by the governor, was able to transfer $10 million to the governor’s re-election bid.

Who makes campaign contributions that exceed $138,000 – a sum beyond the average income for a New Yorker? It goes without saying that the wealthy and the powerful are the only ones capable of writing those checks. And it is precisely those entities that want something back from government.

A new report examined contributions to the party committees. Not surprisingly, Democratic Party-affiliated party committees – the party that dominates politics in Albany – collected the most money. Here’s some of the report’s key findings:

• During the last four and a half years (the most recent data available), of the nearly $117 million in campaign contributions to the political party committees, the state and legislative Democratic campaign committees received 72%. In every instance, state Democratic committees dominated their Republican committee counterparts.
• For the same period, among the largest sources of contributions were those that had business before government, with Political Action Committees (PACs) being the largest. PACs are almost always organized to provide electoral “punch” to groups that lobby state government.

This system is not new and it’s one that benefits both political parties when they are in control.

In the 1980s a special commission examined party committee contributions. It concluded: “The Commission found that this creates an unhealthy climate of indebtedness, with some candidates owing their success to party leaders who are in turn dangerously dependent on large contributions from special interests and those doing business with the government.”

Forty years later, nothing much changed. Reformers argue that contributions to party committees must be dramatically lowered and that limits must be placed on transfers from state parties to their candidates. Until those measures are taken, the findings of the four-decade-old report will continue to ring true: meaning party leaders “dangerously dependent on large contributions from special interests and those doing business with the government.”