Cruz Wins Campaign Finance Suit, Likely Boost to Self-Funding Candidates

Cruz Wins Campaign Finance Suit, Likely Boost to Self-Funding Candidates Cruz Wins Campaign Finance Suit, Likely Boost to Self-Funding Candidates (Ken Cedeno/Pool via AP)

By Fran Beyer | Thursday, 03 June 2021 05:24 PM

A federal court in Washington sided with Sen. Ted Cruz, R-Texas — striking down a ''somewhat obscure'' section of a 2002 campaign finance law that’s expected to give a boost to wealthier candidates who self-fund their campaigns.

A three-judge panel of the U.S. District Court for the District of Columbia found on Thursday that Section 304 of the Bipartisan Campaign Reform Act unconstitutionally infringes on candidates’ free speech rights, Roll Call reported.

The section 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 Federal Election Commission had argued Congress could impose the limit to stop the risk and appearance of corruption when elected officeholders solicit contributions that’ll be used to repay their personal loans, the news outlet noted.

But the court wrote there’s no examples of that kind of quid pro quo corruption; the decision also leaned on a previous U.S. Supreme Court ruling that extended free speech protections to campaign financing because ''effective speech requires spending money,'' Roll Call reported.

''The loan-repayment limit does not serve that interest, and the government’s arguments to the contrary boil down to hypothetical concerns about influence and access to incumbents,'' the panel wrote. ''Such justifications are not sufficient under the First Amendment to uphold a statute that burdens political speech.''

The case stemmed from Cruz’s 2018 run for Senate. He made two loans the day before the general election for a total of $260,000. After he won the election, Section 304 prevented Cruz from paying himself back the final $10,000.

''The constitutionality of this provision has long been in doubt, so this decision is not a surprise,'' campaign finance lawyer Brett Kappel told Roll Call. ''It will make it marginally easier for both parties to recruit self-funding candidates.''

The FEC had argued the law intended to stop corruption, citing comments from then-Texas Republican Sen. Kay Bailey Hutchison on the Senate floor who said candidates ''have a constitutional right to try to buy the office, but they do not have a constitutional right to resell it,'' Roll Call reported.

But Cruz — who succeeded Hutchison after she decided against a run for reelection in 2012 — pointed to another part of that same speech, where she said the purpose was ''to level the playing field so that one candidate who has millions, if not billions, of dollars to spend on a campaign will not be at such a significant advantage over another candidate who does not have such means as to create an unlevel playing field.''

The court’s decision points out Section 304 was enacted at the same time as Section 319 — dubbed the 'Millionaires' Amendment, which the U.S. Supreme Court struck down in 2008, in part, because it was intended to level electoral opportunities for candidates of different personal wealth, Roll Call noted.

According to The Hill, the ruling is another blow to campaign finance rules over the last decade. The U.S. Supreme Court also struck down a ban on corporate political spending in its 2010 Citizens United v. FEC decision and removed aggregate donation limits in the 2014 McCutcheon v. FEC ruling. Cruz cited those cases in his lawsuit, as did Judge Neomi Rao, a Trump appointee who wrote the ruling.

The FEC could appeal the case to the U.S. Supreme Court.

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