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-

In The News

Health

Voting

Campaign Finance

June 1, 2022
by Dan McCue
Swalwell Seeks to Use Campaign Funds for Child Care

WASHINGTON — Rep. Eric Swalwell, D-Calif., has asked the Federal Election Commission for clarification on its rules regarding the use... Read More

WASHINGTON — Rep. Eric Swalwell, D-Calif., has asked the Federal Election Commission for clarification on its rules regarding the use of campaign funds to pay for child care expenses incurred by a candidate. Swalwell, who currently represents California's 15th Congressional District, is seeking reelection this year... Read More

May 16, 2022
by Dan McCue
Sen. Cruz Victorious in Campaign Finance Case

WASHINGTON  —  Sen. Ted Cruz. R-Texas, has prevailed in his Supreme Court challenge to a provision of federal campaign law,... Read More

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... Read More

May 2, 2022
by Dan McCue
FEC Greenlights Rep’s Campaign Fund Spend on Security Gate

WASHINGTON — A congressman’s use of campaign funds to install a locking steel security gate around his Florida home after... Read More

WASHINGTON — A congressman’s use of campaign funds to install a locking steel security gate around his Florida home after he received a series of death threats would not violate federal campaign finance laws, the Federal Election Commission said last week. As previously reported in The... Read More

Millionaire Candidates Pour Cash into Ohio, Pa. Senate races

COLUMBUS, Ohio (AP) — Millionaire candidates and billionaire investors are harnessing their considerable personal wealth to try to win competitive... Read More

COLUMBUS, Ohio (AP) — Millionaire candidates and billionaire investors are harnessing their considerable personal wealth to try to win competitive Republican primaries for open U.S. Senate seats in Ohio and Pennsylvania. Mike Gibbons, an Ohio investment banker, leads the pack of self-funders in both states after... Read More

April 20, 2022
by Dan McCue
FEC Asked to Set Value for Campaign Research in Senate Race

WASHINGTON — The campaign committee for Senate Democrats has asked the Federal Election Commission to appraise the value of a... Read More

WASHINGTON — The campaign committee for Senate Democrats has asked the Federal Election Commission to appraise the value of a “research book” it wants to provide to two Democratic candidates to aid in their bids to unseat an incumbent Republican senator. In its letter sent last... Read More

April 15, 2022
by Dan McCue
Judge Says Abrams Campaign Fund Can’t Raise Unlimited Cash

ATLANTA — A federal judge on Thursday ruled that a fundraising committee affiliated with Democratic gubernatorial candidate Stacey Abrams can’t... Read More

ATLANTA — A federal judge on Thursday ruled that a fundraising committee affiliated with Democratic gubernatorial candidate Stacey Abrams can’t begin raising unlimited campaign contributions. The ruling is based on a state law passed last year that allows Georgia lawmakers to form a new kind of... Read More

News From The Well
scroll top