In the final days of the 2018 election, Sen. Ted Cruz (R-Tex.) loaned his campaign $260,000, specifically so he could challenge an obscure campaign finance restriction that only $250,000 in personal loans can be repaid with money raised after an election.
Oral arguments at the Supreme Court on Wednesday indicated Cruz is in position to collect on his investment.
Only the court’s three liberal justices seemed receptive to the Justice Department’s argument that the restriction was a legitimate way to keep politics just a little bit cleaner that meets constitutional muster.
“It targets a practice that has significant corruptive potential,” said Justice Department lawyer Malcolm L. Stewart. “A post-election contributor generally knows which candidate has won the election, and post-election contributions do not further the usual purposes of donating to electoral campaigns.”
He compared it to limiting gifts to federal officials, saying both reflect “the insight that we worry about corruption at a much lower monetary level when the money is going into the candidate’s pocket.”
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The government was appealing a unanimous decision for Cruz by a three-judge district court panel.
But Stewart was facing a conservative Supreme Court majority that over the past decade or so has been eager to trim back the Bipartisan Campaign Reform Act of 2002, more commonly known as the McCain-Feingold Act. The most recognized of such moves is the decision in Citizens United v. Federal Election Commission to remove limits on the money corporations and union can spend on electioneering.
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Justice Amy Coney Barrett wondered how repayment of loans could be seen as giving a gift to the winner.
“Senator Cruz says that this doesn’t enrich him personally because he’s no better off than he was before,” she said. “It’s paying a loan, not lining his pockets.”
Justice Brett M. Kavanaugh said it was clear under Supreme Court precedent that the First Amendment allows candidates to spend their own money or lend it to the campaign to advance their political speech.
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The restriction at issue makes a candidate hesitate before loaning more than $250,000, for fear it would be lost. “That seems to be, therefore, a chill on your ability to loan your campaign money. Why is that not right?” Kavanaugh asked.
Chief Justice John G. Roberts Jr. lamented the justices balancing the benefits of the restrictions with the possible incursion on constitutional rights.
“How are you supposed to weigh such imponderables such as the marginal burden on the exercise of First Amendment rights against the marginal assistance in preventing corruption?” he asked.
Several of the conservative justices posed hypotheticals about limiting the influence of media outlets.
“If the government determined that certain media outlets had an outsized influence on an election, could it similarly limit the amount that they spend on editorials to equalize the influence?” Justice Clarence Thomas asked.
Stewart said no.
The lawyer most strenuously advanced the argument that Cruz did not have legal standing to challenge the law because it would have been easy for him to be repaid by 20 days after the election, a limit set in the regulation.
The campaign intentionally missed the deadline so that it could challenge the law, a self-inflicted injury that should not win Cruz standing, Stewart said.
But Cruz’s lawyer, Charles J. Cooper, said the senator was following in the footsteps of civil rights activists who have violated laws to prove in court they were unconstitutional.
“At least since Mr. [Homer] Plessy sat down in the train car reserved for Whites, this Court has repeatedly held that a plaintiff who deliberately subjects himself to the injury of unconstitutional government action for the admitted purpose of challenging it has created his standing, not defeated it,” said Cooper. He was referring to Plessy’s unsuccessful challenge of segregation in the landmark 1896 case Plessy v. Ferguson.
Cooper’s most relentless interrogator was Justice Elena Kagan, who in the past has been an ardent defender of campaign finance laws.
“The candidate can spend all the money he wants of his own money. . . . He can spend a gazillion dollars of his own money if he wants to on his campaign, right?” Kagan asked. “So this restriction, which is a restriction on loan repayment, is really a restriction on how a candidate can use third parties to finance his speech, isn’t it?”
What “jumps off the page,” she said, is the potential for contributors to “find a way to put money not in the campaign but into a candidate’s own personal pocket.”
Justice Sonia Sotomayor, participating remotely from her chambers as she has during the omicron variant outbreak, said Congress’s concern about corruption was clear.
“Why do you give after an election to a candidate who’s not going to spend it on getting elected?” she asked. “He’s going to spend it on something in the past but certainly nothing with respect to the actual election and his getting his post. And to me, that’s a natural quid pro quo.”
But Cooper pointed out a successful candidate can begin fundraising for the next election immediately after winning. The curb on currying favor is in the individual contribution limit, he said.
Cruz, formerly a Supreme Court clerk and Texas solicitor general, has argued nine cases at the high court. But the court’s coronavirus restrictions have closed the courtroom to the public, and he was not at the argument.
The case is Federal Election Commission v. Ted Cruz for Senate.