Home » Articles » Case » Campaign Finance and Other Political Campaign Regulations » Federal Election Commission v. Cruz (2022)

Written by John R. Vile, last updated on September 19, 2023

Select Dynamic field

Sen. Ted Cruz, R-Texas, greets supporters at his election night party on Tuesday, Nov. 6, 2018, in Houston, after winning re-election. In 2022, Cruz won a case at the Supreme Court overturning a restriction on repaying his personal loan to his campaign with post-election campaign contributions. (AP Photo/David J. Phillip)

In Federal Election Commission v. Ted Cruz for Senate, 596 US. ____ (2022), the U.S. Supreme Court struck down Section 304 of the Bipartisan Campaign Reform Act of 2002 (BCRA).

 

This section had prohibited a candidate’s campaign committee from repaying to a candidate more than $250,000 in personal loans made to the campaign unless the repayment occurred within 20 days of the election and used pre-election contributions. In this case, the Federal Election Commission prohibited U.S. Senator Ted Cruz, R-Texas, who had loaned $260,000 to his 2018 Senate reelection campaign against Beto O’Rourke, from recouping the additional $10,000.

 

The government had argued that the campaign finance regulation was needed to avoid a quid pro quo contribution after the election, or the appearance of giving a gift to a winning candidate in exchange for influence.

 

The Supreme Court disagreed and ruled that the law burdened political speech by deterring candidates from loaning money to their campaigns and the government had not shown proper justification.

 

“Debt is a ubiquitous tool for financing electoral campaigns, especially for new candidates and challengers,” Chief Justice John Roberts Jr. wrote in the majority opinion. “By inhibiting a candidate from using this critical source of campaign funding, Section 304 raises a barrier to entry—thus abridging political speech. “

 

The court was divided along ideological lines, with Roberts authoring the 6-3 opinion and Justice Elena Kagan authoring a dissent that was joined by justices Stephen Breyer and Sonia Sotomayor.

 

Court: Candidates may spend unlimited amount of own money on campaign

 

Roberts noted that Buckley v. Valeo, 424 U.S. 1 (1976) had established that a candidate could “spend an unlimited amount of his own money in support of his campaign.” He further observed that the law already capped at $2,900 the amount that individuals could contribute to any single candidate’s primary or general election.

 

Roberts argued that Cruz had standing to bring the suit even though the government argued that Cruz had the option of being repaid the full loan amount with pre-election funds within 20 days of the election. Cruz did not forfeit such standing simply because he was involved in the decision not to take that route.

 

Court: Limiting repayment of debt raises barrier to entry for candidates

 

Citing Monitor Patriot Co. v. Roy, 401 U.S. 265 (1971), Roberts said that “the First Amendment ‘has its fullest and most urgent application precisely to the conduct of campaigns for political office.’” Buckley had further underlined the need for an “uninhibited, robust, and wide-open” debate on public issues.

 

In this case, the law burdened candidates, like Cruz, who wished “to make expenditures on behalf of their own candidacy through personal loans.” Roberts noted that after BCRA was adopted, candidates had cut back on their willingness to loan their campaigns more than $250,000, thus limiting the amount that they could spend on campaign speech. Large personal loans might not only jumpstart a campaign but they might also signal that a candidate has “skin in the game.”  Limiting repayment of such debts “raises a barrier to entry—thus abridging political speech.”

 

Roberts: Risk of corruption not proven

 

The only compelling interest the government provided for limiting speech in this case involved “the prevention of ‘quid pro quo’ corruption or its appearance.” Earlier Supreme Court rulings had denied governmental attempts “to reduce the amount of money in politics,” “to level electoral opportunities by equalizing candidate resources” or to limit “the general influence a contributor may have over an elected official.”

 

Although the government argued that the risk of post-election contributions to pay off a candidate’s debt posed special issues, Roberts was skeptical. Noting the individual contribution limits remained, Roberts referred to the legal provision at issue as a “prophylaxis-upon-prophylaxis approach” based on “mere conjecture” as to corruption and the appearance of such. He discounted “media reports and anecdotes” as well as a scholarly article, an online poll, and what he characterized as “a few stray floor statements” by members of Congress. Quoting from the Buckley decision, Roberts believed that even taken together, such arguments were “pretty meager, given that we are considering restrictions on ‘the most fundamental First Amendment activities’ — the right of candidates for public office to make their case to the American people.”

 

Roberts denied the contention that repayments were “akin to a ‘gift’ because they ‘add to the candidate’s personal wealth’ as opposed to the campaign’s treasury.” He distinguished a gift, which enhanced a candidate’s wealth, from a loan repayment that left a candidate no better off than before the candidate made it.  Roberts further denied that the court had an obligation to defer to congressional judgments, especially in cases where legislation might insulate its members against wealthy challengers.

 

Kagan believed the law protected against ‘dirty dealing’

 

Justice Kagan believed that the provision of the law in question protected the general public from corruption. 

 

“Political contributions that will line a candidate’s own pockets, given after his election to office, pose a special danger of corruption” and would “enhance the risk of dirty dealing.” She distinguished the right of a candidate to spend his own money from that of impeding “his ability to use other people’s money to finance his campaign.”

 

In citing Buckley, Kagan regarded Section 304 as only a “‘marginal restriction’ on speech, because it regulates contributions alone.” It sought not to address candidates’ “self-funding” but their reliance “on third parties.” Any effects on overall spending were akin to those implicit in limiting the amount that individuals could contribute to specific campaigns.

 

Kagan accordingly accused the majority of failing “to appreciate what Section 304 had an indirect effect on: lending, rather than spending money.”

 

Kagan: Appearance of corruption compounded after winner is known

 

Kagan regarded “preventing quid pro quo corruption or its appearance” as “a compelling interest by any measure.” She further argued that such corruption and its appearance were compounded when they occur after an election when the winner is known.

 

Section 304 was no “needless precaution” but was especially necessary in the case of post-election contributions to winners. Donors are likely to expect paybacks from those whom they take “off the sharp hook” of debt. She alluded to a variety of instances that suggested that individuals and firms who had contributed to such relief had been rewarded with governmental contracts and other largesse.

 

Citing the decision in Nixon v. Shrink Missouri Government PAC, 528 U.S. 27 (2000)  that upheld limits on campaign contributions, she wrote: “Democracy works only if the people have faith in those who govern.” Kagan repeated her belief that Section 304 imposed only marginal restrictions on speech and should  be upheld.

 

With a solid majority greater than in the Court’s decision in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), which lifted restraints on union and corporate contributions to campaigns, this precedent seems secure absent the adoption of a constitutional amendment specifically limiting the application of the First Amendment to legislation involving political campaign contributions and expenditures.

 

This article was published May 17, 2022. John R. Vile is a professor of political science and dean of the University Honors College at Middle Tennessee State University.

 

How To Contribute

The Free Speech Center operates with your generosity! Please donate now!