A case brought by Ted Cruz is a huge boon to rich candidates and moneyed lobbyists.
The Supreme Court’s conservative majority has been at war with campaign finance laws for more than a dozen years, stretching at least as far back as its decision in Citizens United v. FEC (2010). On Monday, the Court’s six Republican appointees escalated this war.
The Court’s decision in FEC v. Ted Cruz for Senate is a boon to wealthy candidates. It strikes down an anti-bribery law that limited the amount of money candidates could raise after an election in order to repay loans they made to their own campaign.
Federal law permits candidates to loan money to their campaigns. In 2001, however, Congress prohibited campaigns from repaying more than $250,000 of these loans using funds raised after the election. They can repay as much as they want from campaign donations received before the election (although a federal regulation required them to do so “within 20 days of the election”).
The idea is that, if already-elected officials can solicit donations to repay what is effectively their own personal debt, lobbyists and others seeking to influence lawmakers can put money directly into the elected official’s pocket — and campaign donations that personally enrich a lawmaker are particularly likely to lead to corrupt bargains. Sen. Ted Cruz (R-TX) manufactured a case to try to overturn that $250,000 limit, and now, the Court has sided with him.
Indeed, now that this limit on loan repayments has been struck down, lawmakers with sufficiently creative accountants may be able to use such loans to give themselves a steady income stream from campaign donors.
According to the Los Angeles Times, for example, Rep. Grace Napolitano (D-CA) made a $150,000 loan to her campaign at 18 percent interest in 1998 — before the 2001 law was enacted. Though Napolitano did eventually reduce the interest rate on this loan to 10 percent, the high-interest loan allowed her to make a considerable profit from donors.
As of 2009, Napolitano reportedly raised $221,780 to repay that loan — $158,000 of which was classified as “interest.” Because the 6-3 decision in Ted Cruz neutralizes the 2001 law, lawmakers may now potentially use a similar scheme in order to funnel legal bribes into their personal bank accounts.
Other lawmakers might not be quite as brazen in seeking to line their own pockets. But they still may be inclined to reward donors who help them recoup the cost of personal loans. As Justice Elena Kagan writes in dissent, a candidate who receives money that goes directly into their own pocket is likely to be “more grateful than for ordinary campaign contributions (which do not increase his personal wealth).”
The case builds upon past campaign finance decisions, but also expands upon them
The thrust of Chief Justice John Roberts’s majority opinion in Ted Cruz is that protecting the right of candidates to get out their campaign message — and to spend as much as they want to get out that message — is of such superlative importance that it trumps society’s interest in preventing corruption or in making sure that elections are not dominated by the wealthy. As Roberts writes, “the First Amendment ‘has its fullest and most urgent application precisely to the conduct of campaigns for political office.’”
To be clear, candidates were allowed to spend as much as they want to influence their election under the now-overturned law — they could loan their campaigns any amount they like, and could use donors’ money to repay all of it, as long as they got those donations before the election and repaid their personal loans within 20 days.
But that didn’t go far enough for the Court’s current conservative majority.
Roberts’s Ted Cruz opinion fully embraces the value system implicit in past decisions like Citizens United, which allowed corporations to spend unlimited sums of money to influence elections so long as they did not donate directly to candidates.
The First Amendment, Roberts writes, “safeguards the ability of a candidate to use personal funds to finance campaign speech,” a rule that “reflects our profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.”
Of course, this “profound national commitment” only favors uninhibited, robust, and wide-open debate by certain privileged individuals. It should go without saying that most Americans cannot afford to drop $250,000 or more on a political campaign, even if they expect that money to be repaid at some point in the future.
But Roberts brushes off any concerns that the rule announced in Ted Cruz unfairly favors rich people who want to run for office. Quoting from the Court’s decision in Davis v. FEC (2008), Roberts writes that “level[ing] electoral opportunities for candidates of different personal wealth” is an “impermissible goal.”
Similarly, Roberts’s opinion places a great deal of weight on a distinction between different forms of corruption that also played a starring role in Citizens United. Though the Court’s decisions ostensibly permit Congress to ban “quid pro quo” corruption — that is, an explicit deal where a lawmaker agrees to cast a certain vote or take some other official action in return for a campaign donation — decisions like Citizens United do not permit campaign finance laws that try to prevent donors from buying access to lawmakers.
Much like Citizens United, Roberts’s Ted Cruz opinion frames this sort of influence-seeking as an affirmative good. “Influence and access ‘embody a central feature of democracy,’” Roberts writes, “that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be responsive to those concerns.”
In other words, the Ted Cruz opinion suggests that it is good for democracy if a Texas oil executive can write checks to candidates who will look out for the oil industry’s interests. And, if that candidate rewards this executive by meeting with him to hear his particular concerns, that’s a “central feature of democracy” as well.
Yet, while the outcome of Ted Cruz won’t surprise anyone familiar with the conservative justices’ previous statements about campaign finance laws, it is an escalation from prior decisions. As Justice Kagan writes in dissent, the Court’s previous decisions drew a distinction between laws “restricting expenditures” and those “restricting contributions.”
That is, the government’s power to limit what campaigns can do with the money they’ve lawfully raised is rather circumscribed. But, as the Court held in Buckley v. Valeo (1976), “a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor’s ability to engage in free communication.”
This is why, for example, the Court has thus far left untouched a federal law limiting the amount that each individual may donate to a particular federal campaign to $2,900.
But the decision in Ted Cruz strikes down a limit on how much money campaigns can raise from donors, and not a restriction on how campaigns can spend their money. Before Ted Cruz, campaigns could only raise $250,000 in post-election funds to repay a loan from the candidate. Now they can raise as much as they want.
That’s an escalation in the Court’s approach to campaign finance. While decisions like Citizens United permit unlimited donations to political organizations independent from a political campaign — such as a super PAC — the Court has historically recognized that donations directly to a candidate or their campaign are different because they are more likely to lead to corrupt behavior.
Under the theory articulated by cases like Citizens United, a lawmaker is less likely to be corrupted by a large donation to an “independent” organization that supports their reelection, than they are to be corrupted by a similarly large donation to their campaign, so long as the independent group’s activities are “not coordinated” with the candidate.
In fairness, Roberts’s opinion does contain some language suggesting that the Court will leave the $2,900 cap on individual donations to campaigns intact. Indeed, Roberts argues that the anti-bribery protections offered by the cap on loan repayments is unnecessary because lobbyists and other donors may only give up to $2,900 per election cycle to an elected official — even if that money is going directly into the official’s pocket.
Apparently a bribe isn’t a big deal, so long as it is less than $2,900 (and so long as that bribe isn’t made to a super PAC or another group that is nominally independent from the candidate.)
In any event, the Court’s campaign finance decisions have been a steady march toward deregulation. So there’s no guarantee that any attempt to make elections less corrupt will remain safe.