Election Agency Moves to Appeal Cruz Loan Ruling to High Court

  • Lower court threw out curbs on repayment of campaign loans
  • May be Supreme Court’s first campaign finance case since 2014

Bloomberg Government subscribers get the stories like this first. Act now and gain unlimited access to everything you need to know. Learn more.

The Federal Election Commission has taken the first step to appeal to the Supreme Court a decision throwing out candidate-loan restrictions in a case that was brought by Sen. Ted Cruz (R-Texas).

A lower court allowed congressional lawmakers to tap donors after being elected to replenish all the money loaned to their campaigns. If the Supreme Court accepts the appeal it would be its first major campaign finance case since 2014.

“This is a preliminary step” that preserves the FEC’s ability to pursue the matter to the high court, said Ellen Weintraub, a Democratic member of the commission.

Photographer: Stefani Reynolds/Bloomberg
The Federal Election Commission has taken a step to appeal to the Supreme Court a ruling involving Sen. Ted Cruz (R-Texas) that threw out restrictions on repayment of campaign loans.

Weintraub said she couldn’t provide further details about the commission’s action because the vote to file the notice of appeal took place in a closed process to discuss litigation. The commission’s rules require a vote of at least four of the six members of the commission to take any legal action.

Citizens United

Weintraub said she supported the restrictions on candidate loans that were struck down but voted against filing the appeal notice because of concern that the current Supreme Court, with a 6-3 conservative majority, might use the case as a vehicle to further roll back campaign finance laws.

“We all learned from Citizens United that the Supreme Court can expand the issues it chooses to review,” she said.

Weintraub referred to a 2010 ruling by the high court in a case originally focused on disclosure issues that was stretched by the justices, who voted 5-4 to strike down a longstanding ban on corporate spending to influence federal election campaigns.

In the Cruz case, a three-judge panel in the federal district court in Washington sided with the Texas senator to strike down a $250,000 cap on the amount of contributions raised after an election that could be used to repay pre-election candidate loans. Under special procedures for campaign finance challenges, the case can be appealed directly to the Supreme Court.

Supporters of campaign finance rules said the Cruz decision weakened guardrails set up in the 2002 McCain-Feingold Act (Public Law 107-155) intended to limit the influence of political action committees and other big donors by preventing them from funneling large amounts of cash directly into a lawmaker’s pocket in the form of a loan repayment.

Adav Noti, a former FEC staff lawyer now with the Campaign Legal Center, said he supported an appeal to the Supreme Court.

“The lower court ignored the obvious corruption risks of politicians enriching themselves with money from wealthy donors, and the court’s poorly reasoned decision was contrary to decades of precedent – including Supreme Court precedent,” Noti said. The current Supreme Court is skeptical of anti-corruption laws, he said, but the “lower court’s decision in this case was so factually and legally incorrect that the Supreme Court might well come to a different conclusion.”

Several other recent Supreme Court rulings have said campaign finance rules violated the First Amendment. The most recent case in 2014 was McCutcheon v. FEC, in which the court majority struck down an aggregate limit on how much a single donor can give to all federal candidates and political committees. The court has added new conservative justices since that ruling, making supporters of regulation even more wary.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bgov.com

To contact the editor responsible for this story: Bennett Roth at broth@bgov.com

Stay informed with more news like this – from the largest team of reporters on Capitol Hill – subscribe to Bloomberg Government today. Learn more.