Judges to hear Ted Cruz’s challenge to campaign finance law lending restrictions


CASE OVERVIEW

Sen. Ted Cruz, R-Texas, challenges a provision of the Bipartisan Campaign Reform Act. (Christopher Halloran via Shutterstock)

The 2018 Texas Senate race between Republican Ted Cruz and Democrat Beto O’Rourke was one of the tightest races in Texas in 40 years, with O’Rourke failing to unseat Cruz by an estimated 200,000 votes out of 8.3 million votes. It was also expensive, with the contestants collectively raising over $100 million. On Wednesday, the Supreme Court will hear oral arguments in a case arising from this election, Federal Election Commission vs. Ted Cruz for Senate. In it, Cruz challenges a provision of federal campaign finance law limiting how and when candidates can repay loans they make to their own campaigns.

The day before Election Day, Cruz loaned his campaign $260,000. The campaign then repaid her $250,000 of that loan, allegedly using contributions she received after the election. Under section 304 of the Bipartisan Campaign Reform Act, $250,000 is the maximum amount of post-election contributions that can be used to repay a candidate’s pre-election campaign loans. Consequently, the campaign was unable to repay the remaining $10,000 and the money was instead labeled as Cruz’s contribution to his campaign.

Cruz went to federal court in 2019, asking the court to block the enforcement of Section 304 on the grounds that it violates the First Amendment. A three-judge panel of the U.S. District Court for the District of Columbia agreed. The court ruled that the limit on loan repayments violated the First Amendment because the government failed to demonstrate that it served an interest in preventing quid pro quo corruption — that is, politicians exchanging favors for contributions – or that the limit was targeted enough to serve that. interest. The Federal Election Commission appealed to the Supreme Court in July and the judges announced at the end of September that they would hear the government’s arguments.

In its factum on the merits, the FEC first disputes whether Cruz has a legal right to sue, known as standing, to challenge the loan repayment limit. Cruz, writes the FEC, complains that the law does not allow him to repay the last $10,000 with post-election contributions. But he did not demonstrate that he used the post-election contributions to repay the first $250,000, according to the FEC, so he could still repay the last $10,000 with the post-election contributions. On the contrary, argues the FEC, all the evidence indicates that Cruz could not have repaid the first $250,000 using post-election contributions. Cruz also has no right to sue, adds the FEC, because any injury he suffered was entirely self-inflicted: he could have repaid the loan with pre-election funds in the first 20 days after the election. , but he chose not to because he wanted to be able to sue.

In any event, the FEC continues, the loan repayment limit does not violate the First Amendment. First, any burden it places on the right to make and accept campaign contributions is minimal at best. It only applies to contributions made after the election, which “by definition do not fund additional political speech”. And the candidate can still make loans, underlines the FEC; the campaign simply cannot repay more than $250,000 using post-election funds. In this case, the FEC suggests that the charge is virtually non-existent as Cruz never said he wanted to use the money to fund the speech; instead, he just wanted to lay the groundwork for this case.

The modest burden is intended to advance Congress’ interest in preventing quid pro quo corruption, FEC told judges, particularly when contributions are used to repay a candidate’s personal loans, and therefore go directly to the candidate , rather than fund the campaign. The post-election contribution limit also recognizes the increased possibility of corruption once the election is over and donors seek special favors from the winning candidate. “The limit targets the specific practice that poses the increased risk, while leaving the word of applicants and contributors otherwise intact,” the FEC assures the court.

Cruz counters that he has standing to challenge the loan repayment limit because it undoubtedly hurt him: the loan that Cruz provided to his campaign during the 2018 election cycle was subject to the limit, and he did not couldn’t repay everything because of the limit. The FEC is simply wrong, writes Cruz, when it argues that the campaign did not have enough money to repay the entire $250,000 loan using post-election contributions. And it doesn’t matter, he says, about whether he has the right to sue, whether his injury is “self-inflicted”: a decision to the contrary, suggests Cruz, “would cause a radical change in the modern landscape. “. constitutional litigation and challenges several landmark civil rights cases.

Cruz argues that the loan repayment limit imposes a burden on a candidate’s right to speak freely in support of their own election because it “significantly increases[es] the risk that any candidate loans will never be fully repaid” and therefore “forces a candidate to think twice before making these loans in the first place”. It also places a burden, he suggests, on the discourse of campaign committees and contributors. When committees have limited cash and must choose between repaying candidate loans or reimbursing suppliers, they necessarily choose which speech to fund. And because the loan repayment limit “effectively creates[s] a cap on overall post-election contributions”, this therefore affects the rights of contributors, he writes.

Even when a less stringent test is applied, Cruz argues, the limit still violates the Constitution. The limit was put in place to “level the playing field”, not – as the FEC suggests – to fend off quid pro quo corruption, he alleges. But even if Congress intended to fight quid pro corruption, he adds, the loan repayment limit is unnecessary when concerns about corruption are already addressed by the $2,900 limit. on individual contributions. Moreover, he points out, the FEC cited no evidence of quid pro quo corruption in post-election contributions. Indeed, Cruz notes, 40 states and the District of Columbia place no restrictions on the use of post-election contributions to repay candidate loans in state-level elections.

Finally, even if the loan repayment limit protected against corruption, Cruz argues, it is still too wide. Specifically, while it might protect against the possibility of a politician doing a favor to a donor in return for a contribution after they’re elected, Cruz concedes, that scenario obviously wouldn’t apply to losing candidates.

This article was originally published in Howe on the Court.

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