The Good That Ted Cruz’s Win Can Do
To hold his Senate seat against his challenger, Beto O’Rourke, in 2018, Ted Cruz spent nearly $40 million. O’Rourke’s campaign spent double that amount.
The day before the vote in Texas, Cruz lent his campaign $260,000. This was a curious—and seemingly unnecessary—gesture: The campaign’s final report showed it ended with $263,000 cash in hand.
Yet Cruz was not acting irrationally. He was preparing the ground for a challenge of his own, an assault on the tottering remains of the McCain-Feingold campaign-finance law of 2002.
That law, more formally known as the Bipartisan Campaign Reform Act, or BCRA, limited how campaigns could repay loans from candidates. A campaign has 20 days in which it can repay such loans in full. After that deadline, it can repay no more than $250,000.
When Cruz’s campaign finished repaying him, the deadline had elapsed. So his campaign committee settled only $250,000 of the loan, leaving $10,000 outstanding—which Cruz then sued in federal court to recover, arguing that the law’s provision was a violation of his First Amendment rights. That set in motion more than three years of litigation with the Federal Election Commission that came to a conclusion in Monday’s Supreme Court ruling.
Cruz had prudently set the amount of his loan so that a legal defeat would cost him only $10,000. But he won. And his win has ripped another hole in a law already shredded by past decisions involving the FEC, including Citizens United (decided by the Supreme Court in January 2010) and Speechnow.org (decided by the D.C. Circuit two months after Citizens United).
Federal Election Commission v. Cruz now joins the list and pushes the BCRA further toward nullity. The majority opinion written by Chief Justice John Roberts rejected the loan restriction as impermissibly burdensome on candidates’ free-speech rights. Since the 1976 case Buckley v. Valeo, candidates have been allowed to spend limitless amounts on their own campaigns. What possible justification could there be, therefore, for limiting the amount they can lend? Roberts argued. Even to restrict the terms on which loans like this can be repaid is to limit a candidate’s right to political speech unconstitutionally.
In her eloquent dissent, Justice Elena Kagan proposed an answer:
Political contributions that will line a candidate’s own pockets, given after his election to office, pose a special danger of corruption. The candidate has a more-than-usual interest in obtaining the money (to replenish his personal finances), and is now in a position to give something in return.
The majority dismissed this concern as conjecture and took comfort in the surviving restrictions on political contributions as sufficient protection against corruption or the appearance of corruption.
The big winners from the Cruz decision are candidates rich enough to write themselves a big check, but not so rich that they can afford to say goodbye to the money forever. A true billionaire might not bother to recover a campaign loan, but a plain multimillionaire may want or need to. So, big day for them.
Beyond that, it’s doubtful that this case really represents a milestone in itself. It is rather part of a larger restructuring of campaign finance since 2002, in which the biggest change has been the rise of the super PAC.
Once upon a time, the most important players in any election were the campaigns themselves. They raised and spent money under the direction of candidates and their campaign managers. The Supreme Court’s anti-BCRA decisions have reapportioned spending power from the campaigns to the super PACs, which can raise and spend on a greater scale than almost any candidate. Super PACs not only are independent of campaigns but are also specifically prohibited from coordinating with campaigns. The rule requiring separation of candidates and super PACs calls for a great deal of careful lawyering between the two supposedly noncommunicating parts of a campaign, or else a candidate can be reduced to something like a mere spectator in his or her election.
Even so, the rule can have strange effects. For example, super PACs will now publish negative polling information to the world so that their preferred candidate can legally read it. In February this year, for example, the super PAC backing J. D. Vance’s senatorial candidacy in Ohio published a 98-page PowerPoint presentation that documented how badly Vance was being hurt by the Club for Growth’s attack ads against him as a Never Trumper. That’s not something a campaign would normally want to admit. But the shared information proved useful. Vance’s backer Peter Thiel had separated himself from the super PAC, to which he had given $10 million last year, so that he could still act as an adviser to the Vance campaign. Alerted by the public sharing of research he had funded but could not privately read, Thiel was able to use his campaign-adviser status to maximum effect by helping gain a late endorsement for Vance from ex-President Donald Trump. The endorsement arrived on April 15, and Vance won the primary three weeks later.
The literary power of Kagan’s dissent has gained the Cruz decision much attention. But that may be a misdirection. In the 2020s, the big news in campaign finance is not what’s happening inside campaigns but what’s taking place outside and around campaigns. As so often in U.S. campaign-finance history, the unintended effects of reform are crushing the intended ones.
In a world of enormously potent and enormously unregulated super PACs, perhaps the FEC’s old focus on policing campaigns has become obsolete, even counterproductive. The question for today may be: How do we put candidates back in charge of their campaigns and restore their responsibility rather than allow them to take refuge in the deniability of secretive, overly mighty super PACs?
With an election campaign, at least you know who is answering to whom. That may not be much. But it’s better than the world we’ve been building since McCain-Feingold became law.