Supreme Court sides with Sen. Cruz and strikes down limit on campaign repayment of personal loans from candidates

The Supreme Court on Monday sided with a Republican politician in a challenge against a federal campaign finance reform law that imposed strict limitations on how and when campaigns can repay personal loans provided by the candidate themself.

By a margin of 6-3, the Supreme Court ruled in favor of Sen. Ted Cruz’s (R-TX) argument that Section 304 of the Bipartisan Campaign Reform Act of 2002 constituted an unconstitutional violation of a candidate’s and campaign’s right to free speech, the Conservative Brief reported.

That statutory regulation limits campaigns to only repay up to $250,000 of a candidate’s own personal loan with post-election contributions, though there is an exception that allows for higher loan amounts to be repaid within 20 days of an election, albeit using only pre-election contributions.

According to Fox News, Sen. Cruz had purposefully loaned his 2018 re-election campaign $260,000 in order to challenge the constitutionality of the Federal Election Commission’s regulations limiting loan repayment in support of the BCRA statute. His campaign has since paid back all but the $10,000 in excess of the $250,000 limit.

Limit on loan repayment violates free speech

The Supreme Court’s ruling Monday upheld a decision by a district court that had declared the loan repayment limits to be unconstitutional, SCOTUSblog reported.

Chief Justice John Roberts authored the majority opinion in favor of Sen. Cruz and was joined by the other five Republican-appointed jurists, while Justice Elena Kagen penned a dissent that was joined by her two fellow Democrat-appointed jurists on the bench.

In that majority opinion, Roberts determined that the statutory regulation in question was indeed an unconstitutional violation of the First Amendment rights of a political candidate by, in effect, imposing a limit on their political speech via personal loans to their own campaigns.

“By restricting the sources of funds that campaigns may use to repay candidate loans, Section 304 increases the risk that such loans will not be repaid,” Roberts wrote. “That in turn inhibits candidates from loaning money to their campaigns in the first place, burdening core speech.”

Concerns about corruption

In Justice Kagen’s dissent, she largely eschewed discussion of the Constitution and the law itself and instead engaged in hypothetical assertions that removing the limit on how and when a campaign could repay a candidate’s personal loan with post-election contributions would give rise to corruption and “quid pro quo” deals in which donors, aware they were paying off a politician’s debt, would feel they were owed some political favoritism in return.

She further asserted that such post-election contributions for the purpose of repaying a candidate’s personal loan should be considered a “gift” that was enriching the politician.

But Roberts addressed Kagen’s dissent in his majority opinion and noted that other statutory limitations, specifically the $2,900 limit on individual donations, already prevented the sort of “quid pro quo” corruption his liberal colleague had warned of.

Further, the chief justice noted that the repayment of personal loans couldn’t be construed as a “gift” to enrich a candidate given that it had been the candidate’s money to begin with and that inherent in the extension of any sort of loan is the expectation that it will be repaid in full at some point in the future, meaning candidates aren’t getting rich off of repaid loans but merely recouping their own money that had been used upfront for their campaign.

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