Matt Rourke/AP
Sen. Ted Cruz, R-Texas, speaks at David McCormick's campaign event in Lititz, Pennsylvania, May 13, 2022. The Supreme Court, on Monday, sided with Mr. Cruz in a campaign finance case.

Supreme Court sides with Ted Cruz, strikes campaign finance rule

The Supreme Court ruled that a provision limiting campaign use of post-election funds to repay candidates for loans made pre-election is unconstitutional. While supporters call it a free speech win, critics say the decision erodes a key check against corruption. 

The Supreme Court’s conservative majority sided Monday with Republican Sen. Ted Cruz of Texas and struck down a provision of federal campaign finance law, a ruling that a dissenting justice said runs the risk of causing “further disrepute” to American politics.

The court, by a 6-3 vote, said the provision Mr. Cruz challenged limiting the repayment of personal loans from candidates to their campaigns violates the Constitution. The decision comes just as campaigning for the 2022 midterm elections is intensifying.

Chief Justice John Roberts wrote for the majority that the provision “burdens core political speech without proper justification.”

The Biden administration had defended it as an anti-corruption measure, but Justice Roberts wrote the government had not been able to show that the provision “furthers a permissible anticorruption goal, rather than the impermissible objective of simply limiting the amount of money in politics.”

Justice Elena Kagan disagreed, writing that for two decades the provision checked “crooked exchanges.” Justice Kagan said in a dissent for herself and the court’s two other liberals that the majority, in striking down the provision, “greenlights all the sordid bargains Congress thought right to stop.” She said the decision “can only bring this country’s political system into further disrepute.”

In an emailed statement, Mr. Cruz’s attorney, Charles Cooper, said the ruling: “is a victory for the First Amendment’s guarantee of freedom of speech in the political process.”

The case involved a section of the 2002 Bipartisan Campaign Reform Act, commonly referred to as the McCain-Feingold campaign-finance law. The provision said that if a candidate lends his or her campaign money before an election, the campaign cannot repay the candidate more than $250,000 using money raised after Election Day. The provision said loans could still be repaid with money raised before the election.

Mr. Cruz, who has served in the Senate since 2013 and ran unsuccessfully for president in 2016, loaned his campaign $260,000 the day before the 2018 general election for the purpose of challenging the law.

Mr. Cruz’s spokesman, Steve Guest, said in an emailed statement that the senator was “gratified” by the decision, which Mr. Guest said would “help invigorate our democratic process by making it easier for challengers to take on and defeat career politicians.”

The decision is the latest since Justice Roberts became chief justice in 2005 in which conservatives have struck down congressionally enacted limits on raising and spending money to influence elections. That includes the 2010 Citizens United decision, which opened the door to unlimited independent spending in federal elections.

Justice Kagan, in her dissent, described one result now that the most recent provision has been struck down. A candidate could lend his or her campaign $500,000 and, after winning, use donor money to pay that back in full, she said. The grateful politician might then respond to donors’ money with “favorable legislation, maybe prized appointments, maybe lucrative contracts,” she wrote. “The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption.”

At another point, 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.”

Justice Roberts, however, noted in his majority opinion that individual contributions to candidates for federal office, including those made after the candidate has won the election, are capped at $2,900 per election.

“The dissent’s dire predictions about the impact of today’s decision elide the fact that the contributions at issue remain subject to these requirements,” he wrote. He pointed out that most states “do not impose a limit on the use of post-election contributions to repay candidate loans.”

Mr. Cruz had argued that the provision made candidates think twice about lending money because it substantially increased the risk that any candidate's loan will never be fully repaid. A lower court had agreed the provision was unconstitutional.

The case may be most directly important to candidates for federal office who want to make large loans to their campaigns. But the administration, which declined a request for comment following the ruling, has also said that in the past the great majority of candidate loans were for less than $250,000 and therefore the provision Mr. Cruz challenged did not apply.

The government has said that in the five election cycles before 2020, candidates for Senate made 588 loans to their campaigns, about 80% of them under $250,000. Candidates for the House of Representatives made 3,444 loans, nearly 90 percent under $250,000.

The case is Federal Election Commission v. Ted Cruz for Senate, 21-12.

This story was reported by The Associated Press.

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