Sen. Cruz Victorious in Campaign Finance Case

May 16, 2022 by Dan McCue
Sen. Cruz Victorious in Campaign Finance Case
Sen. Ted Cruz, R-Texas (right), with Republican U.S. Senate candidate Josh Mandel meet with members of the media before a campaign event at High Street Baptist Church, in Columbus, Ohio, April 30, 2022. (Joshua A. Bickel/The Columbus Dispatch via AP, File)

WASHINGTON  —  Sen. Ted Cruz. R-Texas, has prevailed in his Supreme Court challenge to a provision of federal campaign law, but in dissent at least one justice believes the ruling “can only bring this country’s political system into further disrepute.”

On its face, the underlying case may have seemed like small potatoes to those unacquainted with campaign finance law. 

It hinged on a section of the 2002 Bipartisan Campaign Reform Act that deals with the repayment of loans that a candidate makes to their own campaign.

In 2018, Cruz narrowly won over his Democratic challenger Beto O’Rourke. In the end, by Texas standards, it was a squeaker, with Cruz winning by just 219,000 votes or about 2.6 percentage points. 

On Nov. 5, 2018, the day before Election Day and with the outcome far from certain, Cruz gave Ted Cruz for Senate, his campaign committee, two loans totalling $260,000.

Following the election, the Cruz committee used the funds it had on hand to pay vendors and meet other obligations instead of repaying the loans made by the senator.

The Bipartisan Campaign Reform Act places a $250,000 limit on the amount of post-election contributions that can be used to pay back a candidate’s pre-election loans more than 20 days after Election Day.

But the Cruz campaign waited more than 20 days to get to Cruz’s loans, only getting around to them in early December 2018.

Because the 20 days had elapsed, the campaign repaid Cruz just $250,000; the amount of the loans that still exceeded the statutory cap — $10,000 — was converted into a campaign contribution.

The Ted Cruz for Senate committee sued the Federal Election Commission to invalidate the conversion and to enjoin the agency from enforcing the relevant section of the Bipartisan Campaign Reform Act. 

In doing so, it argued the restrictions created by the act violated both constitutional and administrative laws.

On Monday, the Supreme Court’s conservative majority sided with the senator in a 6-3 ruling.

Writing for the majority, Chief Justice John Roberts said the provision “burdens core political speech without proper justification.”

In her dissent Justice Elena Kagan said that striking the provision down “greenlights all the sordid bargains Congress thought right to stop.” 

Later Kagan, who was joined by Justices Sonia Sotomayor and Stephen Breyer in dissent, wrote, the provision struck down Monday “targets a practice posing exceptional risks of quid pro quo deals.” 

“Repaying a candidate’s loan after he has won election cannot serve the usual purposes of a contribution: The money comes too late to aid in any of his campaign activities. All the money does is enrich the candidate personally at a time when he can return the favor — by a vote, a contract, an appointment,” she said. 

“It takes no political genius to see the heightened risk of corruption — the danger of ‘I’ll make you richer and you’ll make me richer’ arrangements between donors and officeholders. Section 304 has guarded against that threat for two decades, but no longer. In discarding the statute, the court fuels non–public-serving, self-interested governance. It injures the integrity, both actual and apparent, of the political process.” 

According to the Associated Press, in the five election cycles prior to 2020, candidates for Senate made 588 loans to their campaigns, about 80% of them under $250,000. 

Candidates for the House made 3,444 loans, nearly 90% under $250,000.

In a lengthy written statement, Trevor Potter, president of Campaign Legal Center, said Monday’s ruling by the high court was a “disappointing one.”

“American campaign finance laws are designed to limit political giving that overly indebts officeholders to donors and results in political favors,” Potter said. “Permitting candidates to solicit unlimited post-election contributions to repay their personal campaign loans and put the donor money in their own pockets gives an obvious and lamentable opening for special interests to purchase official favors and rig the political system in their favor.”

Later Potter wrote the court’s decision “conflicts not only with the Supreme Court’s long-standing recognition that putting money into candidates’ pockets creates an inherent risk of corruption but also with common sense and historical experience.” 

“While the direct effects of this decision are limited to the narrow federal provision at issue in the case, it reveals a Supreme Court increasingly out of step with the American people — who overwhelmingly recognize that unchecked campaign giving poses profound risks to the integrity of our democracy. More immediately, the ruling could imperil an array of similar restrictions on post-election loan repayments adopted at the state and local level out of legitimate concerns over corruption,” Potter said.

Dan can be reached at [email protected] and @DanMcCue


A+
a-
  • campaign finance
  • Supreme Court
  • Ted Cruz
  • In The News

    Health

    Voting

    Campaign Finance

    August 11, 2023
    by Dan McCue
    Campaign Legal Center Files Straw Donor Complaint on Christie-Supporting PAC

    WASHINGTON — A Texas-based entity called SHBT LLC violated federal campaign finance laws by hiding the true source of a... Read More

    WASHINGTON — A Texas-based entity called SHBT LLC violated federal campaign finance laws by hiding the true source of a $1 million contribution to Tell It Like It Is, a super PAC supporting the 2024 presidential bid of former New Jersey Gov. Chris Christie, a campaign... Read More

    Trump's Campaign Finances Are Strained as Legal Peril Mounts

    WASHINGTON (AP) — Donald Trump’s political operation entered the second half of the year in a strained financial position with its bank... Read More

    WASHINGTON (AP) — Donald Trump’s political operation entered the second half of the year in a strained financial position with its bank account drained by tens of millions of dollars that were directed toward defending the former president from mounting legal challenges as he seeks the White House... Read More

    July 13, 2023
    by Dan McCue
    Elections Commission to Host Webinar for First-Time Candidates

    WASHINGTON — The Federal Election Commission is hosting a webinar for first-time candidates, potential candidates, their campaign committees and staff... Read More

    WASHINGTON — The Federal Election Commission is hosting a webinar for first-time candidates, potential candidates, their campaign committees and staff on Wednesday, Aug. 30 at 1 p.m. The Zoom webinar is intended to provide the aforementioned attendees with an introduction to campaign finance laws and regulations... Read More

    May 30, 2023
    by Dan McCue
    DeSantis, State PAC Accused of Violating ‘Soft Money’ Ban

    WASHINGTON — Florida Gov. Ron DeSantis and his state PAC allegedly broke campaign finance laws prohibiting the use of so-called... Read More

    WASHINGTON — Florida Gov. Ron DeSantis and his state PAC allegedly broke campaign finance laws prohibiting the use of so-called “soft money” by transferring over $80 million to a federal super PAC, a complaint filed by the Campaign Legal Center claims. Friends of Ron DeSantis, a... Read More

    April 28, 2023
    by TWN Staff
    What’s Happening Friday in DC?

    WASHINGTON — It’s a relatively quiet, rainy Friday in Washington, with a forecast of periodic heavy rain and high wind... Read More

    WASHINGTON — It’s a relatively quiet, rainy Friday in Washington, with a forecast of periodic heavy rain and high wind gusts sure to inspire those who can to stay home. Others, however, aren’t so lucky. Among them, the president, who will be venturing out this evening... Read More

    February 17, 2023
    by Dan McCue
    Political Consultant Sentenced for 2016 Campaign Contribution Scheme

    WASHINGTON — Political Consultant Jesse Benton was sentenced Friday to 18 months in prison for his role in funneling illegal... Read More

    WASHINGTON — Political Consultant Jesse Benton was sentenced Friday to 18 months in prison for his role in funneling illegal foreign campaign contributions from a Russian national to Donald Trump’s 2016 presidential campaign. According to court documents, Benton, a Philadelphia, Pennsylvania, native who now lives in... Read More

    News From The Well
    scroll top