“It’s a free speech versus election regulation case,” said Roger Borgelt, a campaign finance attorney based in Austin. “There has been a trend over the years … to strike down a number of federal campaign regulations and laws on the basis that they are too restrictive of the First Amendment rights of candidates.”
Cruz, who was first elected senator to represent Texas in 2012, hopes to overturn campaign finance laws that prohibit winning federal candidates from using more than $250,000 raised after an election to pay back loans they gave their own campaigns prior to Election Day. Oral arguments on the case will take place Jan. 19.
Campaign Legal Center, a nonprofit organization that works in the areas of campaign finance, ethics and election law, wrote a brief in favor of keeping the law in place. In the brief, the organization said the risk of corruption posed by what is functionally a personal “gift” to a candidate is self-evident.
Advocates for the law contend it helps prevent the appearance of quid pro quo corruption, in that contributions could be exchanged for eventual political favors. The idea is that any money fundraised after an election is no longer going to help the candidate win but directly into the candidate’s pocket.
Borgelt, who isn’t representing either side in the case, said he believes this argument is weak because the campaigns are constantly fundraising for the next cycle, adding that fundraising is a 24/7, 365 days/year effort.
“It is hardly novel or implausible to believe that a post-election contribution that effectively goes straight into a candidate’s pocket may create a risk of corruption,” it said.
“People give to these campaigns almost continuously. They give before the election; they get after the election — and this is regardless of whether there’s any loan outstanding or not,” Borgelt said. “I’m not sure that the timing issue about when the money is given carries much weight.”
Another argument for those who wish to see the law overturned is that it infringes on political free speech. During the past decade, SCOTUS has honed in on the concept that political speech is free speech and the most protected form of speech under the First Amendment.
Since the rule in question caps the amount of money a candidate can recoup following an election, opponents argue that candidates will be deterred from lending their campaigns money which will then hinder their opportunities in messaging. This will become even more of a burden on less-known candidates who require more resources to amplify their name and message. “It takes a lot of money to get a political message out where people that you need to have hear it or that you would like to have hear it; actually hear it,” Borgelt said. “It’s just an unfortunate fact, in my opinion, but it is a fact that it takes a lot of money to get a message out.”
Borgelt’s point is reiterated in a brief filed by the Institute for Free Speech who said that if candidates thought they would not be able to recoup any of their money, it would discourage them from investing in their campaigns and likely running altogether. Don Daugherty, a senior attorney who wrote the IFS brief, said since campaigns require a lot of money, it is difficult to repay all of one’s loans before Election Day and therefore it is common for there to be post-election debt, especially at the federal level.
Daugherty added that a core reason for the rule is that it prevents corruption, but the FEC has been unable to produce a known case of corruption. In the dozens of states where no similar rule exists, there have been no reports of corruption, nor was the FEC able to provide credible rationale for why the limit was set to $250,000, he said. “Bottom line is that anything that restricts the ability of candidates or supporters, etc., to get their message out to voters, anything that restricts that better have a doggone good reason for doing so,” Daugherty said.
When Cruz’s campaign determined that the loans could not be fully repaid because of the regulations, it began exploring ways to challenge the law, according to reporting by The Texas Tribune. A day before the 2018 election, Cruz loaned his campaign $260,000 to set the groundwork for the lawsuit. In June, a federal district court ruled in favor of Cruz’s campaign, stating that the limit on repayment of candidate loans did violate the First Amendment and the right to free political speech. The FEC appealed the ruling to the U.S. Supreme Court.
This particular case looks to address the McCain–Feingold law passed in 2002. Cruz became involved after the law blocked him from recouping $545,000 of a $1 million personal loan he offered to his campaign in 2012, according to a Federal Election Commission report. HOW WE GOT HERE