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Filthy Lucre

American Politics Just Got a Little More Corrupt Thanks to Ted Cruz and John Roberts

Campaign graft continues its long-running undefeated streak at the Supreme Court.

Kent Nishimura/Getty Images
Texas Senator Ted Cruz

As it wrestles with one of its most turbulent terms in decades, the Supreme Court on Monday did something all too familiar: It struck down part of a campaign-finance law that sought to limit the corrupting influence of donor cash in American politics. The court’s 6–3 majority in Federal Election Commission v. Ted Cruz for Senate—yes, that Ted Cruz—made it easier for wealthy Americans to help elected officials repay their personal loans to their campaigns after they have won.

The decision followed the court’s well-trod path of disfavoring efforts to rein in the influence of the wealthiest Americans on our political system. “In the end, it remains our role to decide whether a particular legislative choice is constitutional,” Chief Justice John Roberts wrote for the court. “And here the Government has not shown that Section 304 furthers a permissible anti-corruption goal, rather than the impermissible objective of simply limiting the amount of money in politics.”

At issue was Section 304 of the Bipartisan Campaign-Finance Reform Act, or BCRA, which is also known as the McCain-Feingold Act—named for the two senators who championed its passage in 2002. BCRA is known mainly for two things: requiring candidates to say, “I’m so-and-so, and I support this message” after their own campaign ads, and getting carved up by the Supreme Court every few years on First Amendment grounds. Most Americans have heard of Citizens United, of course, but there was also Austin v. FEC, Davis v. FEC, FEC v. Wisconsin Right to Life, and McCutcheon v. FEC. I hope you, dear reader, have someone who loves you as much as the Supreme Court loves strengthening the stranglehold of wealthy Americans over our political system.

What fell on the chopping block this time? One of BRCA’s lesser-known provisions is Section 304, which forbids campaigns from reimbursing more than $250,000 in personal loans from a candidate to their own campaign after Election Day. No limit exists for repaying loans made before Election Day. Why the distinction between the preelection and postelection periods? Because the provision’s authors wanted to prevent donors from shoveling money into a candidate’s campaign funds after that candidate has already won, which would make it easier for the candidate to recoup their personal investment.

It’s not hard to imagine the perverse incentives that might follow without that cap in place. “[The candidate] 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),” Justice Elena Kagan wrote in a dissenting opinion. “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.”

Texas Senator Ted Cruz ginned up the lawsuit in question by giving his campaign a $260,000 loan in 2018, when his reelection campaign faced a well-funded challenge by Democratic rival Beto O’Rourke. Under Section 304, his campaign could repay all but $10,000 of the loan after the 2018 election. Cruz and his campaign waited until after Election Day that year to repay the quarter-million-dollars, aside from the $10,000 that went over the limit. The FEC noted in its brief for the justices that Cruz had conceded in earlier stages of litigation that the “sole and exclusive motivation” behind the loan and repayment was to trigger a legal challenge to Section 304 itself.

Cruz told the court that Section 304 had unjustly curbed his First Amendment rights because the FEC regarded the remaining $10,000 as a campaign donation that couldn’t be repaid instead of as part of a loan that could. In theory, the campaign could have paid the $10,000 back to Cruz before Election Day and then given him the rest after Election Day, but then Cruz wouldn’t have had a chance to get his name on a Supreme Court case. Cruz told the justices that Section 304 “imposes a special and significant burden” on campaign speech because it “deters candidates from loaning money to their campaigns, through the mechanism of restricting the campaign’s ability to repay those loans” and, thus, “substantially [increases] the risk that those loans will never be repaid.”

The Supreme Court has long held that campaign donations and expenditures are broadly protected by the First Amendment. At the same time, the justices have also held that Congress has a strong interest in preventing the “appearance or reality” of corruption in federal elections. Under the Roberts court, whenever these two interests have collided, the latter interest had almost always given way. In the court’s view, “corruption” is a Thomas Nast cartoon where a Gilded Age robber baron gives a burlap sack of cash with a giant dollar sign on it to a member of Congress, and then the member of Congress gives the baron a piece of paper that says “votes” or “legislation” or “railroads” on it back to him. Anything less obvious than this is, in the Roberts court’s eyes, free speech.

Roberts breezily explained the court’s laissez-faire approach to campaign-finance law while explaining why it must strike down this portion as well. “For example, we have denied attempts to reduce the amount of money in politics, to level electoral opportunities by equalizing candidate resources, and to limit the general influence a contributor may have over an elected official,” the chief justice explained. “However well intentioned such proposals may be, the First Amendment—as this Court has repeatedly emphasized—prohibits such attempts to tamper with the ‘right of citizens to choose who shall govern them.’” The First Amendment, in other words, gives rich and poor Americans alike the right to plow millions of dollars into political campaigns to influence candidates.

When faced with arguments in defense of Section 304’s utility in stemming corruption in particular, Roberts was unsurprisingly unpersuaded. “We greet the assertion of an anti-corruption interest here with a measure of skepticism, for the loan-repayment limitation is yet another in a long line of ‘prophylaxis-upon-prophylaxis approach[es]’ to regulating campaign finance,” he wrote, citing individual campaign contribution limits and other campaign-finance regulations.

Kagan took issue with that characterization of Section 304. “The idea behind that fancy-sounding epithet is just that the statute is a needless precaution,” she wrote on behalf of herself and Justices Stephen Breyer and Sonia Sotomayor. Kagan noted that Section 304 was designed to address an additional danger beyond the baseline ones. “When an added protection addresses an added danger, the existence of a basic protection (however ordinarily ample) fails to show the supplement’s pointlessness,” she explained. “Regular seatbelts might suffice to protect drivers on the interstate, but special belts—and roll cages to boot—are essential measures on the racetrack.”

Roberts also treated the possibility of quid pro quo corruption through loan repayments as a mere hypothetical when discussing Section 304, writing that the FEC had been “unable to identify a single case of quid pro quo corruption in this context.” Kagan, for her part, took it more seriously. She even recounted a series of scandals at the state and local level where state election laws did not have a Section 304 equivalent to show the dangers of abandoning it:

In Ohio, various law firms donated almost $200,000 to help the newly elected attorney general recoup his personal loans. Those donors later received more than 200 state contracts worth nearly $10 million in legal fees. In Alaska, a lobbyist collected almost $100,000 for post-election repayment of the Governor’s personal loans. A business in which he held an interest later received a $9 million state contract. In Kentucky, two Governors loaned their campaigns millions of dollars, “only to be repaid after the election by contributors seeking no-bid contracts.” The scandal those transactions created led to a new state campaign-finance law similar to Section 304. In upholding that statute, a court more cognizant than this one about how corruption works explained that “heavily indebted candidates” were “easy bedfellows for quid pro quo contributors.”

Roberts, in rebuttal, dismissed those examples as “a handful of media reports and anecdotes.” He also leaned on the strict quid pro quo aspect for anti-corruption measures to survive a First Amendment challenge, as opposed to less overt interchanges of money and power. It wasn’t enough for wealthy donors simply to entice a candidate with well-timed donations; they had to explicitly ask for a big bag of cash or favors or votes in exchange for it. “Access and influence ‘embody a central feature of democracy—that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be responsive to those concerns,’” Roberts explained, quoting from the court’s ruling in McCutcheon. That is great news for those with enough money to buy access and influence to elected officials. For everyone else, well, good luck.

There’s a dark irony in Roberts’s reference to the demolition of various other protections over the last two decades. Perhaps by coincidence, or perhaps not, that swing in the court’s jurisprudence matched a general breakdown in Americans’ faith in their political systems. Gallup’s surveys on confidence in the three federal branches also show roughly two decades of decline. Two-thirds of Americans told Pew Research Center last year that they think most U.S. politicians are corrupt, and only roughly one-third of Americans said they didn’t think the American political system needed major changes. As the court worries about its own perception in the public mind, it might also be worth considering the damage it’s helped do to the other branches along the way.