Supreme Court rules for Ted Cruz in campaign finance dispute

The Supreme Court on Monday ruled for Sen. Ted Cruz (R-Texas) in his legal challenge to federal limits on the amount of money candidates can raise from donors to pay off their personal debt after an election.

The court struck down a $250,000 cap on the amount of post-election funds a candidate can be repaid for personal loans they made to their campaign, finding that the restriction violated the First Amendment.

The 6-3 ruling split along familiar ideological lines, with the court’s conservatives siding with Cruz over a dissent from the court’s three liberals.

Chief Justice John Roberts, writing for the majority, said that penalizing candidates who exceeded the $250,000 cap — as Cruz did — would unduly burden a candidate’s constitutional right “to use his own money to facilitate political speech.”

“By restricting the sources of funds that campaigns may use to repay candidate loans, (the regulation) increases the risk that such loans will not be repaid,” Roberts wrote. “That in turn inhibits candidates from loaning money to their campaigns in the first place, burdening core speech.” 

The dispute arose after Cruz put $260,000 of his own money into his 2018 reelection campaign. The following year, as he sought to pay off his debt in excess of the federal limit, Cruz sued the Federal Election Commission (FEC), teeing up a constitutional challenge to the law.

Cruz prevailed on his constitutional claim in a lower federal court last summer when a three-judge panel ruled that the provision of the 2002 statute at issue — the 2002 Bipartisan Campaign Reform Act — violated his free speech rights. The FEC later appealed to the Supreme Court.

Monday’s decision is the latest example of the court’s steady erosion of the 2002 campaign finance statute, having previously struck down its provision to restrict the power of wealthy self-funding candidates, a ban on corporate political spending and limits on the amount of money a donor can give in each election cycle.

In a blistering dissent, the court’s three liberals said the ruling would embolden quid pro quo corruption. To illustrate the point, Justice Elena Kagan described a scenario in which a newly elected politician who loaned his campaign $500,000 turns to wealthy donors and corporate lobbyists after an election to recoup his debt.

“And as they paid him, so he will pay them,” Kagan said of the benefactors. “In the coming months and years, they receive government benefits — maybe favorable legislation, maybe prized appointments, maybe lucrative contracts. The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption.”

The ruling handed a defeat to the Biden administration, which urged the justices to sustain the repayment cap during oral arguments in January. 

Malcolm Stewart, a Justice Department lawyer who argued on behalf of the FEC, said the court should turn away what he characterized as Cruz’s “self-inflicted” and “manufactured” legal injury. He likened Cruz’s strategy to that of a plaintiff who buys hot McDonald’s coffee and intentionally pours it on themselves to lay the groundwork for a lucrative lawsuit.

But the majority on Monday found that Cruz had a clear right to bring the challenge, finding that his legal injury was “directly inflicted” by the FEC.

“That (the challengers) chose to subject themselves to those provisions does not change the fact that they are subject to them, and will face genuine legal penalties if they do not comply,” Roberts wrote for the majority.

— Updated at 11:24 a.m.