Court sides with Ted Cruz in campaign finance lawsuit

A federal court on Thursday sided with Sen. Ted Cruz (R-Texas) in his lawsuit against the Federal Election Commission (FEC), striking down rules limiting how much money candidates can raise after an election to pay off loans.

Cruz challenged a section of election law that says campaigns cannot pay back more than $250,000 in personal loans through post-election donations. Cruz put $260,000 of his own money into his 2018 reelection campaign and sued the FEC in April 2019 as he attempted to pay off his debt.

In a 31-page ruling, a three-judge panel ruled that the repayment cap, instituted in the 2002 Bipartisan Campaign Reform Act, violated Cruz’s free speech rights.

“Because the government has failed to demonstrate that the loan-repayment limit serves an interest in preventing quid pro quo corruption, or that the limit is sufficiently tailored to serve this purpose, the loan repayment limit runs afoul of the First Amendment,” wrote D.C. Court of Appeals judge Neomi Rao, a Trump appointee.

A spokesperson for Cruz celebrated the ruling Thursday.

“Today’s unanimous decision was a resounding victory for the First Amendment and free speech.  The existing FEC rules benefited incumbent politicians and the super wealthy and they made it harder for challengers to run, and the court rightly struck them down as unconstitutional,” the spokesperson said.

The ruling is another blow to campaign finance rules that have been picked apart by the courts over the last decade. The Supreme Court struck down a ban on corporate political spending in its 2010 Citizens United v. FEC decision and removed aggregate donation limits in the 2014 McCutcheon v. FEC ruling. Cruz cited those cases in his lawsuit, as did Rao in her ruling.

Advocates of stricter campaign finance laws panned the ruling Thursday, arguing it would hurt transparency and allow wealthy donors to have more influence with lawmakers.

“With this limit struck down, officeholders can raise money after an election and that money effectively goes straight into their pockets in the form of a loan repayment,” said Paul S. Ryan, vice president of policy & litigation at Common Cause. “This is the most potentially corrupting money in all of politics.”

“To ensure a vigorous democratic process, Congress cannot pass laws designed to entrench career politicians at the expense of the First Amendment,” a spokesperson for Cruz’s campaign told The Hill in 2019.

In a court filing, the FEC wrote that lawmakers introduced the cap to “mitigate the heightened risk of quid pro quo corruption and its appearance resulting from already elected officeholders soliciting contributions for their own personal benefit.” The FEC could appeal the case to the Supreme Court.

The FEC declined to comment on the ruling. Cruz’s office did not immediately respond to a request for comment.

Updated 8:25 p.m.