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 candidateโs 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.
โDebt is a ubiquitous tool for financing electoral campaigns, especially for new candidates and challengers,โ Chief Justice John Roberts Jr. wrote in the majority opinion. โBy inhibiting a candidate from using this critical source of campaign funding, Section 304 raises a barrier to entryโthus abridging political speech. โ
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 โspend an unlimited amount of his own money in support of his campaign.โ He further observed that the law already capped at $2,900 the amount that individuals could contribute to any single candidateโs 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 โthe First Amendment โhas its fullest and most urgent application precisely to the conduct of campaigns for political office.โโ Buckley had further underlined the need for an โuninhibited, robust, and wide-openโ debate on public issues.
In this case, the law burdened candidates, like Cruz, who wished โto make expenditures on behalf of their own candidacy through personal loans.โ 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 โskin in the game.โ Limiting repayment of such debts โraises a barrier to entryโthus abridging political speech.โ
Roberts: Risk of corruption not proven
The only compelling interest the government provided for limiting speech in this case involved โthe prevention of โquid pro quoโ corruption or its appearance.โ Earlier Supreme Court rulings had denied governmental attempts โto reduce the amount of money in politics,โ โto level electoral opportunities by equalizing candidate resourcesโ or to limit โthe general influence a contributor may have over an elected official.โ
Although the government argued that the risk of post-election contributions to pay off a candidateโs debt posed special issues, Roberts was skeptical. Noting the individual contribution limits remained, Roberts referred to the legal provision at issue as a โprophylaxis-upon-prophylaxis approachโ based on โmere conjectureโ as to corruption and the appearance of such. He discounted โmedia reports and anecdotesโ as well as a scholarly article, an online poll, and what he characterized as โa few stray floor statementsโ by members of Congress. Quoting from the Buckley decision, Roberts believed that even taken together, such arguments were โpretty meager, given that we are considering restrictions on โthe most fundamental First Amendment activitiesโ โ the right of candidates for public office to make their case to the American people.โ
Roberts denied the contention that repayments were โakin to a โgiftโ because they โadd to the candidateโs personal wealthโ as opposed to the campaignโs treasury.โ He distinguished a gift, which enhanced a candidateโs 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 โdirty dealingโ
Justice Kagan believed that the provision of the law in question protected the general public from corruption.
โPolitical contributions that will line a candidateโs own pockets, given after his election to office, pose a special danger of corruptionโ and would โenhance the risk of dirty dealing.โ She distinguished the right of a candidate to spend his own money from that of impeding โhis ability to use other peopleโs money to finance his campaign.โ
In citing Buckley, Kagan regarded Section 304 as only a โโmarginal restrictionโ on speech, because it regulates contributions alone.โ It sought not to address candidatesโ โself-fundingโ but their reliance โon third parties.โ 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 โto appreciate what Section 304 had an indirect effect on: lending, rather than spending money.โ
Kagan: Appearance of corruption compounded after winner is known
Kagan regarded โpreventing quid pro quo corruption or its appearanceโ as โa compelling interest by any measure.โ 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 โneedless precautionโ but was especially necessary in the case of post-election contributions to winners. Donors are likely to expect paybacks from those whom they take โoff the sharp hookโ 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: โDemocracy works only if the people have faith in those who govern.โ 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 Courtโs 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.