Sen. Ted Cruz campaign finance lawsuit heads to Supreme Court

FEC argues Texas Republican 'self-inflicted' a $10,000 harm just so he could file the lawsuit

Sen. Ted Cruz, R-Texas, speaks Wednesday during a Senate Judiciary Committee hearing.  (Tom Williams/CQ Roll Call)
Sen. Ted Cruz, R-Texas, speaks Wednesday during a Senate Judiciary Committee hearing. (Tom Williams/CQ Roll Call)
Posted September 30, 2021 at 12:05pm, Updated at 2:10pm

The Supreme Court announced Thursday it will decide a challenge to an obscure section of a campaign finance law from Texas Republican Sen. Ted Cruz — one that includes whether it matters if he “self-inflicted” a $10,000 harm during his 2018 run for Senate just so that he could file a lawsuit.

The Federal Election Commission asked the justices to review a June decision from the U.S. District Court for the District of Columbia, which found that Section 304 of the Bipartisan Campaign Reform Act unconstitutionally infringes on candidates’ free speech rights.

That 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. Experts say that ruling, if the Supreme Court upholds it, would give a boost to wealthier candidates who self-fund their campaigns.

Back in 2018, Cruz lent his campaign committee $260,000 the day before the general election, or $10,000 more than that law’s limit. After he won the election, Cruz filed the lawsuit that argued that Section 304 violated the First Amendment because it prevented him from paying himself back the final $10,000.

But the Justice Department, representing the FEC, told the Supreme Court in a filing that Cruz doesn’t have the right to bring the lawsuit in part because the Cruz committee had $2.2 million in pre-election funds and a 20-day post-election window to repay that $10,000 — and it could have “easily” done so.

The government said Cruz’s lawyers already agreed that “the sole and exclusive motivation behind Senator Cruz’s actions in making the 2018 loan and the committee’s actions in waiting to repay them was to establish the factual basis for this challenge.”

That means the financial harm to Cruz was not a result of the actions of the FEC, the government said. “Here, the only injury identified by the district court — Senator Cruz’s loss of $10,000 — was self-inflicted,” the Justice Department wrote.

Lawyers for Cruz, in a reply filed at the court, wrote that the motivations are irrelevant to the merits of the constitutional challenge, and that the government’s argument would mean Cruz should have avoided the financial injury by “complying with the very law he challenges as contrary to the First Amendment.”

“A plaintiff faced with an unconstitutional fine for speaking at a particular occasion can plainly choose to speak, pay the fine and then sue under the First Amendment,” the Cruz lawyers wrote, “without having to show that if he had avoided the fine by declining to speak, he could have sued anyway.”

A three-judge panel of the district court sided with Cruz. The FEC had argued in the case that Congress could impose the limit to stop the risk and appearance of corruption when elected officeholders solicit contributions that will be used to repay their personal loans.

But the court wrote that there are no examples of that kind of quid-pro-quo corruption. And the decision leaned on a previous Supreme Court ruling that extended free speech protections to campaign financing because “effective speech requires spending money.”

Cruz spokesman Steve Guest called Thursday’s Supreme Court announcement “great news,” adding: “Existing FEC rules benefit incumbent politicians and the super wealthy by making it harder for challengers to run for office. We’re confident the Supreme Court will again rule in favor of the First Amendment and free speech.”