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Supreme Court to hear Ted Cruz challenge to campaign finance law

McConnell argued it is an 'ideal opportunity' for justices to wipe out the 2002 law

Kentucky Republican Sen. Mitch McConnell  shakes hands with Texas Republican Sen. Ted Cruz during President Donald Trump's State of the Union address in 2020.
Kentucky Republican Sen. Mitch McConnell shakes hands with Texas Republican Sen. Ted Cruz during President Donald Trump's State of the Union address in 2020. (Leah Millis/Reuters Pool Photo)

The Supreme Court hears oral argument Wednesday in Sen. Ted Cruz’s challenge to a relatively obscure campaign finance provision, in another case that pits the free speech rights of candidates against a law meant to limit the influence of money in politics.

The Texas Republican’s lawsuit brings the Bipartisan Campaign Reform Act — also known as the McCain-Feingold law for its principal sponsors, the late Sen. John McCain and former Sen. Russ Feingold — back to the high court, which has been sharply divided along ideological lines over the past two decades as it struck down as unconstitutional other provisions of that major 2002 law.

That includes the conservative majority’s 5-4 decision in Citizens United v. Federal Election Commission in 2010, which is criticized as opening the door to large political action groups spending unlimited amounts on elections from undisclosed sources.

Cruz’s challenge, related to candidates who make personal campaign loans, doesn’t appear to hold as much potential for such a consequential change in election money. But the FEC and backers of campaign finance laws warn that removing it could open the door to corruption of elected officials.

That’s because the provision Cruz challenged puts a $250,000 limit on candidates for the use of campaign contributions, made after the election has happened, for the sole purpose of repaying the candidate’s personal campaign loans.

“And because such funds flow directly from a patron’s wallet into the candidate’s pocket, the corruption risk is acute,” the nonpartisan, nonprofit Campaign Legal Center wrote in a brief in the case. “An unconditional reimbursement to a candidate personally — like any other item of value — is a gift.

But Senate Minority Leader Mitch McConnell, the Kentucky Republican who has long opposed campaign finance limits, urged the Supreme Court to take this “ideal opportunity” for a wider decision that would wipe out the rest of a law that has been pared back over the years.

“This Court’s decisions over the past decade have rendered BCRA the Humpty Dumpty of campaign-finance law, a patchwork of provisions that Congress never would have approved standing alone and that can never be put back together again,” McConnell told the justices in a brief.

“There is no reason to let BCRA limp along, no need for further piecemeal surgery by this Court: the Court should strike the entire statute,” McConnell wrote.

The Supreme Court’s conservatives formed the majority in the Citizens United v. FEC decision in 2010, as well as in a 5-4 decision in McCutcheon v. FEC in 2014 that struck down the BCRA’s two-year aggregate campaign contribution limit.

The court now has an expanded 6-3 conservative majority and has taken up cases on other issues this term that closely align with long-standing Republican political priorities, such as abortion and gun rights.

The FEC asked the justices to review a June decision from the U.S. District Court for the District of Columbia, which found that Section 304 of the Bipartisan Campaign Reform Act unconstitutionally infringes on candidates’ free speech rights. The BCRA allows challenges via a three-judge panel at the D.C. District Court, and those decisions can only be appealed directly to the Supreme Court, the United States said in a court filing in the case.

Cruz argues that section is unconstitutional because it prohibits federal candidates who made personal campaign loans before the election from using more than $250,000 in post-election contributions to repay them. The senator argues that while candidates can still repay the loans with preelection contributions, the limit substantially increases the risk that any candidate loan will never be fully repaid and “forces a candidate to think twice before making those loans in the first place.

Back in 2018, Cruz lent his campaign committee $260,000 the day before the general election, or $10,000 more than that law’s limit. After he won the election, Cruz filed the lawsuit that argued that Section 304 violated the First Amendment because it prevented him from paying himself back the final $10,000.

The justices at oral argument could first explore whether Cruz has the legal right to challenge the law. The Justice Department, representing the FEC, argues that Cruz “self-inflicted” the $10,000 harm in the case just to bring the challenge. But the discussion will center on whether Congress could impose the limit to combat the risk and appearance of corruption, when elected officeholders solicit contributions that will be used to repay their personal loans.

The Justice Department argued in a brief that the risk of corruption is greater after the election is over because “it is less likely that the donor is giving money to fund speech or to help the favored candidate win, and more likely that she is giving money because of an expectation of special favors or a fear of retaliation.” Cruz’s campaign, in its brief, counters that there is no special risk of corruption because the government’s argument ignores the difference between a loan and a gift.

“Even a child knows the difference between lending a toy to a playmate and gifting the toy, and when the loaned toy is returned, the child knows that he has not received a gift and that his ‘personal assets’ have not increased,” the Cruz brief states.

A three-judge panel of the District Court, in siding with Cruz, wrote that there are no examples of that kind of quid pro quo corruption described by the FEC. And that court’s decision leaned on a previous Supreme Court ruling that extended free speech protections to campaign financing because “effective speech requires spending money.”

A group of five Republican senators — Roy Blunt of Missouri, Bill Cassidy of Louisiana, Kevin Cramer of North Dakota, and Cindy Hyde-Smith and Roger Wicker of Mississippi — told the justices that the limit is “a significant restriction on one of the most important sources for campaign funding.”

And their brief suggests there are other ways the government is accomplishing its goals.

“Three levels of prophylaxis (bribery laws, contribution caps, and contribution disclosures) already prevent quid pro quo corruption and its appearance,” the senators wrote.

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