Supreme Court sides with Ted Cruz, removing cap on use of campaign funds to repay personal campaign loans

The court said a federal cap on candidates using post-election political contributions to recoup personal campaign loans was unconstitutional.

Chief Justice John Roberts wrote the 6-3 decision. Justice Elena Kagan wrote the dissent for fellow liberals Justice Stephen Breyer and Justice Sonia Sotomayor.

“The question is whether this restriction violates the rights of First Amendment candidates and their campaigns to engage in political speech,” Roberts wrote. He said there was “no doubt” the law weighs down First Amendment campaign speech. “Any such law must be justified by at least a legitimate interest,” he added, and the government was unable to identify a single case of so-called “quid pro quo” corruption.

Roberts concluded that “the provision dulls grassroots political discourse without proper justification.”

In her dissenting opinion, Kagan criticized the majority for speaking out against a law that she said was aimed at addressing “a particular danger of corruption” aimed at “political contributions that will line a candidate’s pockets.”

“In striking down the law today,” she wrote, “the Court is giving the green light to every sleazy deal that Congress has seen fit to shut down…Allowing those payments to go from forward without restriction, today’s decision can only further discredit the political system of this country.”

Indeed, she explained, “Reimbursing a candidate’s loan after he has won an election cannot serve the usual purposes of a contribution: the money comes too late to help him in the one of his campaign activities. All the money only personally enriches the candidate at a time. when he can reciprocate – by vote, contract, appointment. You don’t have to be a 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 office holders”.

The decision is a further erosion of a 20-year-old law that governs election financing.

The Supreme Court has already pared back the law, granting corporations and unions the right to spend unlimited sums to influence candidate elections in its 2010 Citizens United decision.

In 2008, judges also struck down the so-called Millionaire’s Amendment which was intended to level the playing field when wealthy candidates fund their own campaigns. This provision had relaxed contribution limits for opponents of self-funded candidates in an effort to fill the funding gap.

In this case, campaign finance regulators at the Federal Election Commission have argued that the cap – part of the Bipartisan Campaign Reform Act of 2002 – is necessary to protect against corruption, but a court A three-judge appeal ruled in Cruz’s favor last year, finding that the loan repayment restriction violates his First Amendment right to free speech.

During oral arguments before the Supreme Court, conservative justices appeared skeptical of the government’s claims that the law serves an anti-corruption purpose.

Judge Amy Coney Barrett said Cruz pointed out that the post-election repayment program would only replenish his coffers with the money he loaned out. “It doesn’t enrich him personally, because he’s no better off than before,” she said, adding, “It’s paying off a loan, not lining their pockets.”

And Judge Brett Kavanaugh said a candidate may be hesitant to loan out money before the campaign for fear of not being able to get it back. “It seems to be,” he said, “a chill in your ability to lend money to your campaign.”

Kavanaugh echoed a lower court opinion in favor of Cruz.

“A candidate’s campaign loan is an expense that can be used for expressive acts,” the court said in an opinion written by DC Circuit Court of Appeals Judge Neomi Rao. She and DC District Court judges Amit Mehta and Timothy Kelly ruled unanimously.

“Such expressive acts are weighed down when a candidate is prevented from taking out a personal loan, or taking out one, for fear that he will be left with the bag on any unpaid campaign debt,” the ruling added.

Federal law allows candidates to make loans to their campaign committees without limit. The Bipartisan Campaign Reform Act of 2002, however, places a $250,000 limit on a campaign committee’s ability to repay these loans with money donated by donors after the election.

A day before his re-election in 2018, Cruz loaned his campaign committee $260,000, or $10,000 over the limit, laying the groundwork for his legal challenge to the cap. While he could have been fully reimbursed by campaign funds if the reimbursement had taken place 20 days after the election. But Cruz let the 20-day deadline pass so he could establish grounds to file the legal challenge.

This story is broken and will be updated.

CNN’s Tierney Sneed contributed to this report.

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