FederalJudicialTed Cruz Campaign Wins Challenge Against Campaign Finance Regulation With Supreme Court Ruling

The Ted Cruz campaign won a challenge at the Supreme Court over a $250,000 limit on candidate loan forgiveness.
May 16, 2022
The U.S. Supreme Court issued a new opinion Monday in favor of the Ted Cruz for Senate campaign, striking down a Federal Election Commission (FEC) regulation that prohibits campaigns from repaying more than $250,000 in loans from candidates more than 20 days after an election.

“The 6-3 decision today at the Supreme Court is a resounding victory for the First Amendment,” said a spokesperson for the Cruz campaign. “Sen. Cruz is gratified that the Supreme Court ruled that the existing law imposed an unconstitutional restriction on free speech that unfairly benefited incumbent politicians and the super wealthy. This landmark decision will help invigorate our democratic process by making it easier for challengers to take on and defeat career politicians.”

In 2018, Sen. Ted Cruz (R-TX) and Democratic challenger Beto O’Rourke racked up the most expensive Senate race in history — until several races topped it in 2020.

While federal contributions are capped for individuals at $2,900 per election, candidates themselves are permitted to loan their own campaign an unlimited amount.

But a requirement passed by Congress in the Bipartisan Campaign Reform Act of 2002 stipulated that a maximum of $250,000 could be repaid to a candidate with funds raised after an election. If a campaign wanted to repay more than that, it would need to use funds raised on or before the election, and it must be repaid within 20 days after the election.

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During the 2018 race, Cruz loaned his campaign slightly above the limit at an amount of $260,000. After the election, his campaign repaid the maximum $250,000 permitted by the FEC, but brought a challenge to the FEC rule over the remaining $10,000, arguing that the limit was a violation of the First Amendment.

In the 6 to 3 decision issued Monday, the Supreme Court agreed with Cruz that the “provision burdens core political speech without proper justification.”

“[T]he Government has not shown that Section 304 furthers a permissible anticorruption goal, rather than the impermissible objective of simply limiting the amount of money in politics,” wrote Chief Justice John Roberts in the opinion.

Justice Elena Kagan, joined by Justices Stephen Breyer and Sonia Sotomayor, wrote a dissent, contending that the lack of the rule will lead to corruption.

“The candidate has a more-than-usual interest in obtaining the money (to replenish his personal finances), and is now in a position to give something in return,” wrote Kagan. “The donors well understand his situation, and are eager to take advantage of it. In short, everyone’s incentives are stacked to enhance the risk of dirty dealing.”

In the opinion of the court, though, Roberts wrote, “Yet the Government is unable to identify a single case of quid pro quo corruption in this context—even though most States do not impose a limit on the use of post-election contributions to repay candidate loans.”

With the ruling, federal candidates will now be able to loan themselves greater sums of money with the opportunity for campaigns to return those funds entirely after an election.

However, if an individual wants to contribute directly to another candidate, the $2,900 limit remains unchanged.

Update: This article was updated to include a comment from the Cruz campaign.


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Daniel Friend

Daniel Friend is the Marketing and Media Manager for The Texan. After graduating with a double-major in Political Science and Humanities, he wrote for The Texan as a reporter through June 2022. In his spare time, you're likely to find him working on The Testimony of Calvin Lewis, an Abolition of Man-inspired novel and theatrical podcast.