The Supreme Court has ruled in favor of Senator Ted Cruz's First Amendment challenge on campaign finance law. In the Federal Election Commission v Ted Cruz for Senate, the question was whether or not it is a violation of the First Amendment right to free speech for campaigns to be prohibited from paying back loans candidates made to their campaigns after the close of that campaign in excess of $250,000.
The issue stems from Cruz's 2018 senate campaign, which was then the most expensive senate race in the history of the state of Texas. During that campaign, Cruz loaned his campaign $260,000. By the time the campaign was able to fully repay the loan, with the use of additional, post-election raised funds, the time period during which it was permissible to repay in excess of $250,000 had passed, and Cruz was only repaid $250,000.
"The 6-3 decision today at the Supreme Court is a resounding victory for the First Amendment," said a Cruz spokesperson. "Sen. Cruz is gratified that the Supreme Court ruled that the existing law imposed an unconstitutional restriction on free speech that unfairly benefited incumbent politicians and the super wealthy. This landmark decision will help invigorate our democratic process by making it easier for challengers to take on and defeat career politicians."
This left $10,000 that Cruz had loaned his campaign unpaid.
The majority, 6-3 opinion, penned by Chief Justice Roberts, ruled that "the bar on repayment injures the Committee [to reelect Cruz] by preventing it from discharging its obligation to repay its debt, which may inhibit that form of financing in the future."
Siding in the majority were Chief Justice Roberts, along with justices Kavanaugh, Barrett, Thomas, Gorsuch, and Alito.
Roberts further said that "we must assume that the loan repayment limitation—including the 20-day rule—unconstitutionally burdens speech."
In conclusion, the opinion reads: "For the reasons set forth, we conclude that Cruz and the Committee have standing to challenge the threatened enforcement of Section 304 of BCRA. We also conclude that this provision burdens core political speech without proper justification. The judgment of the District Court is affirmed."
The minority dissent, joined by Justices Kagan, Breyer and Sotomayor, offered concern that paying a candidate back a loan of personal funds post-election with funds raised post-election opens that candidate up for corruption and influence peddling.
They write that "A candidate for public office extends a $500,000 loan to his campaign organization, hoping to recoup the amount from benefactors’ post-election contributions. Once elected, he devotes himself assiduously to recovering the money; his personal bank account, after all, now has a gaping half-million-dollar hole. The politician solicits donations from wealthy individuals and corporate lobbyists, making clear that the money they give will go straight from the campaign to him, as repayment for his loan.
"He is deeply grateful to those who help, as they know he will be—more grateful than for ordinary campaign contributions (which do not increase his personal wealth). And as they paid him, so he will pay them. In the coming months and years, they receive government benefits—maybe favorable legislation, maybe prized appointments, maybe lucrative contracts. The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption."
In conclusion, Kagan writes that "Repaying a candidate’s loan after he has won election cannot serve the usual purposes of a contribution: The money comes too late to aid in any of his campaign activities. All the money does is enrich the candidate personally at a time when he can return the favor—by a vote, a contract, an appointment.
"It takes no political genius to see the heightened risk of corruption—the danger of 'I'll make you richer and you'll make me richer' arrangements between donors and officeholders. Section 304 has guarded against that threat for two decades, but no longer. In discarding the statute, the Court fuels non-public-serving, self-interested governance. It injures the integrity, both actual and apparent, of the political process."
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