AUSTIN — A lawsuit filed against the Federal Election Commission by U.S. Senator Ted Cruz’s campaign will reach the U.S. Supreme Court next week as his campaign tries to overturn campaign finance laws in his favor.
Cruz, who was first elected senator to represent Texas in 2012, hopes to overturn campaign finance laws that prohibit winning federal candidates from using more than $250,000 raised after an election to repay loans they gave to their own campaigns before Election Day. Oral arguments in the case will take place on January 19.
“This is a case of free speech versus election regulation,” said Roger Borgelt, an Austin-based campaign finance attorney. “There has been a trend over the years … to strike down a number of federal campaign regulations and laws on the grounds that they unduly restrict the rights of First Amendment candidates.”
Defenders of the law argue that it helps prevent the emergence of quid pro quo corruption, as contributions could be exchanged for possible political favors. The idea is that any money raised after an election will no longer help the candidate win but directly into the candidate’s pocket.
Campaign Legal Center, a nonprofit organization that works in the areas of campaign finance, ethics and electoral law, wrote a brief in support of keeping the law in place. In the brief, the organization said the risk of corruption posed by what is functionally a personal “gift” to a candidate is obvious.
“It is hardly new or implausible to believe that a post-election contribution that actually goes straight into a candidate’s pocket could create a risk of corruption,” he said.
Borgelt, who does not represent either side in the case, said he thought that argument was weak because campaigns were constantly raising funds for the next cycle, adding that fundraising was a round-the-clock effort, 365 days a year.
“People donate to these campaigns almost continuously. They give before the election; they get after the election — whether or not there’s a loan going,” Borgelt said. “I’m not sure the question of when the money is given carries much weight.”
Another argument for those who want to see the law overturned is that it undermines freedom of political expression. Over the past decade, SCOTUS has refined the concept that political speech is free speech and the most protected form of speech under the First Amendment.
Since the rule in question caps the amount of money a candidate can recoup after an election, opponents argue that candidates will be deterred from lending money to their campaigns, which will then hamper their messaging opportunities. This will become even more of a burden for lesser-known candidates who need more resources to amplify their name and message.
“It takes a lot of money to get a political message to the people you need to hear or want to hear; actually hear it,” Borgelt said. “It’s just an unfortunate fact, in my opinion, but it’s a fact that it takes a lot of money to get a message across.”
Borgelt’s point is reiterated in a brief filed by the Institute for Free Speech which said if candidates thought they couldn’t get some of their money back, it would discourage them from investing in their campaigns. and probably to show up completely.
Don Daugherty, a senior lawyer who wrote the IFS brief, said that since campaigns require a lot of money, it’s difficult to repay all of their loans before Election Day and so it’s common for there to be has post-election debt, particularly at the federal level.
Daugherty added that one of the main reasons for the rule is that it prevents bribery, but the FEC was unable to produce a known case of bribery. In the dozens of states where no similar rule exists, there have been no reports of bribery, nor has the FEC been able to provide a credible rationale for why the limit has was set at $250,000, he said.
“At the end of the day, anything that limits the ability of candidates or supporters, etc., to get their message across to voters, anything that restricts that has a good reason to do so,” Daugherty said.
HOW WE GOT HERE
This particular case seeks to address the McCain-Feingold Act passed in 2002. Cruz got involved after the law prevented him from recovering $545,000 from a $1 million personal loan he gave his wife. campaign in 2012, according to a report by the Federal Election Commission.
When Cruz’s campaign determined the loans couldn’t be fully repaid due to regulations, it began exploring ways to challenge the law, according to information from the Texas Tribune. A day before the 2018 election, Cruz loaned his campaign $260,000 to lay the groundwork for the lawsuit.
In June, a federal district court ruled in favor of Cruz’s campaign, saying the candidate loan repayment limit violated the First Amendment and the right to free political speech. The FEC appealed the decision to the United States Supreme Court.
Borgelt notes that the case is more arcane, but if historic campaign finance rulings are any indication, he thinks the court will likely rule in favor of Cruz’s campaign as well.
“The Supreme Court has decided that political speech and the expenditure of money to promote political speech are protected by the First Amendment the same as any other type of speech expression,” Borgelt said. “My educated guess – just a guess – is that they will uphold the appeals court and that particular restriction will also be overturned.”
Daugherty said he hopes this case will also provide more constitutional clarity and guidance to lower courts, Congress and citizens because campaign finance laws are convoluted.
He added that while Ted Cruz is tied to the lawsuit — bringing with him preconceived notions based on how one feels about Cruz — it’s not about him. It’s more about free speech, and if the court sided with the lower courts, it would allow for a stronger candidate pool.
“Sometimes these cases turn into [being] about the people involved…it’s not about him,” Daugherty said. “This is really about the First Amendment, and the rule at issue here really weighs more on the candidates for political office than on the incumbent.”