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Supreme Court sides with Sen. Ted Cruz in campaign finance case

Biden administration and government watchdog groups had argued a provision prevented the appearance of corruption

Sen. Ted Cruz speaks with reporters as he arrives for the Senate Republicans’ lunch earlier this month.
Sen. Ted Cruz speaks with reporters as he arrives for the Senate Republicans’ lunch earlier this month. (Bill Clark/CQ Roll Call)

The Supreme Court struck down another provision of a major 2002 law meant to limit the influence of money in politics on Monday and sided with the free speech rights of candidates in a challenge brought by Texas Republican Sen. Ted Cruz.

The 6-3 decision written by Chief Justice John G. Roberts Jr. wipes out a $250,000 limit on the use of campaign contributions, made after the election has happened, for the sole purpose of repaying the candidate’s personal campaign loans.

The Biden administration and government watchdog groups had argued that the provision prevented the appearance of corruption because it stopped interest groups from donating to a candidate who already won in a way that would flow directly to the candidate’s personal accounts.

Roberts, joined by the court’s five other conservative justices, wrote that the government had “pretty meager” evidence the provision would actually limit corruption.

“[T]he Government has not shown that [the law] furthers a permissible anticorruption goal, rather than the impermissible objective of simply limiting the amount of money in politics,” Roberts wrote.

The majority wrote that other campaign finance laws already limited the amount of money individuals could donate, and the “prophylaxis-upon-prophylaxis” approach to campaign finance rules didn’t justify the chilling effect it would have on political speech.

Candidates are less likely to make a loan to fund their own political speech if a limit makes it harder for a candidate to be repaid and increases the risk that the loans ever will be repaid in full, the majority wrote.

“By inhibiting a candidate from using this critical source of campaign funding, however, [the law] raises a barrier to entry — thus abridging political speech,” the opinion states.

A spokesman for the Cruz campaign said the limit “unfairly benefited incumbent politicians and the super wealthy,” and Cruz is gratified the Supreme Court found it unconstitutional. “This landmark decision will help invigorate our democratic process by making it easier for challengers to take on and defeat career politicians,” the spokesman said.

Liberal justices dissent

Justice Elena Kagan wrote a dissenting opinion, joined by the other two liberal members of the court, that states the law at issue prevented “crooked” exchanges for two decades. The majority opinion “greenlights all the sordid bargains Congress thought right to stop,” Kagan wrote.

“The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption,” Kagan wrote.

The majority opinion also ignored the fact that “everyone’s incentives are stacked to enhance the risk of dirty dealing” in post-election loan repayments, Kagan wrote. There, donors are giving money to a sure thing and may feel they can expect favors in return, the dissent states.

And Kagan wrote that a limit to loan repayment did nothing to actually harm a candidate’s ability to fund their own campaign.

“But the candidate can in fact self-fund all he likes,” Kagan wrote. “The law impedes only his ability to use other people’s money to finance his campaign—much as standard (and permissible) contribution limits do.”

Another provision down

The provision is part of 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.

The Supreme Court has struck down other provisions of that law, including 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 lent his campaign $260,000 before the 2018 general election and later sued as the law prevented the campaign from repaying him the remaining $10,000. A three-judge panel at the U.S. District Court for the District of Columbia sided with Cruz. The panel pointed to prior Supreme Court rulings on free speech protections that have linked them to the ability to spend money on that speech.

The Federal Election Commission then appealed and also argued that Cruz had created the problem himself and should not have been allowed to challenge the limit. The Supreme Court ruled Monday that Cruz had the legal right to file the challenge.

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