Ted Cruz's challenge to campaign finance reimbursement law reaches Supreme Court

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Sen. Ted Cruz’s challenge to a federal election law limiting how candidates can recoup loans they make to their own campaigns has reached the U.S. Supreme Court.

The high court on Thursday added Federal Election Commission v. Ted Cruz for Senate, et al. to its docket. If the justices affirm lower courts’ rulings in favor of the Texas Republican, the case would mark another conservative legal victory striking down campaign spending limits under the First Amendment.

Under a 2002 federal law, no more than $250,000 in contributions collected after an election may be used to repay a candidate’s loans to their campaign. But the day before the 2018 election, in which Cruz was locked in a close battle with then-U.S. Rep. Beto O’Rourke, Cruz loaned his campaign $260,000.

In a motion filed Aug. 6, Cruz’s lawyers argued the law deters candidates from loaning money to their campaigns by restricting their ability to get it back.

“To be sure, the loans may still be repaid in full with funds raised prior to the election, but there can be no question that Section 304’s limit—by substantially increasing the risk that any candidate loan will never be fully repaid—forces a candidate to think twice before making those loans in the first place,” they wrote.

Members of Congress passed the law in part to prevent the appearance of quid pro quo corruption when a recently elected member of Congress is collecting contributions that would be repaid to the member’s personal funds. But Judge Neomi Rao, appointed by former President Donald Trump to the D.C. Circuit Court of Appeals, wrote the government did not prove how it achieves that goal.

“Because the government has failed to demonstrate that the loan-repayment limit serves an interest in preventing quid pro quo corruption, or that the limit is sufficiently tailored to serve this purpose, the loan repayment limit runs afoul of the First Amendment,” Rao wrote for the three-judge panel of the U.S. District Court for the District of Columbia.

The Federal Election Commission argues the campaign could have repaid Cruz the remaining $10,000 by using pre-election funds — all $2.38 million in cash on hand, according to court filings — rather than wait for the deadline to pass.

Additional court filings show the Cruz campaign had discussed challenging this limit shortly after his first election to the Senate in 2012.

The lawsuit isn’t the first time Cruz has run into trouble with campaign finance law. In 2019, the FEC fined his 2012 Senate Campaign $35,000 for improperly disclosing $1.1 million dollars in loans from big banks, including Goldman Sachs and Citibank.

Cruz did not respond to a request for comment.

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