Home Entertainment Lending The Supreme Court takes up a case, brought by Ted Cruz, which could legalize corruption

The Supreme Court takes up a case, brought by Ted Cruz, which could legalize corruption


Details of Federal Election Commission v. Ted Cruz for the Senate, a case that the Supreme Court will hear next Wednesday, reads more like a paranoid fantasy imagined by leftists than like a real trial.

The case concerns federal campaign finance laws and, in particular, the ability of candidates to lend money to their campaigns. Candidates can do it – but in 2001 Congress enacted a provision that helps prevent such loans from becoming a means of bribing candidates who will become elected officials. Under this provision, a campaign which benefits from such a loan cannot repay more than $ 250,000 of the loan using funds collected after the elections.

When a campaign receives a pre-election donation, this donation is generally subject to strict rules preventing it from being spent to enrich the candidate. After the election, however, donors who donate money to help pay off a candidate’s loan effectively funnel that money directly to the candidate – who at this point could be a powerful elected official.

A legislator with sufficiently skilled accountants could moreover effectively structure such a loan to allow lobbyists and other donors to help the legislator to benefit directly from it. According to the Los Angeles Times, for example, in 1998 Representative Grace Napolitano (D-CA) granted a loan of $ 150,000 to her campaign at an interest rate of 18% (although she subsequently reduces this interest rate to 10%). In 2009, Napolitano would have raised $ 221,780 to repay this loan – of which $ 158,000 was classified as “interest”.

Thus, in 11 years, the loan would have brought Napolitano nearly $ 72,000 in profits.

And that brings us back to Ted Cruz for the Senate trial. Senator Ted Cruz (R-TX) wants the Supreme Court to abolish the limit on loan repayments to federal candidates. The move could potentially allow any lawmaker to grant a high-rate, high-interest loan to their campaign, and then use that loan as a vehicle to funnel donations straight into their pocket. (The pre-2001 FEC decisions allowed candidates to grant campaign loans to “a “commercially reasonable rate of interest”But that apparently didn’t stop Napolitano from granting a double-digit interest rate loan.)

And while lawmakers don’t get rich by giving their campaign high-interest loans, the fact remains that every dollar a campaign donor gives to help a campaign pay off a candidate’s loan goes straight in the pocket of this candidate. As the Ministry of Justice maintains in its defense against Cruz’s trial, “a contribution that is in addition to a candidate’s personal property (and which can therefore be used for personal ends) poses a much greater threat of corruption than a payment that is simply added to a campaign’s cash flow (and therefore can only be used for campaign purposes).

Cruz asserts that allowing such contributions is necessary to protect “the rights of candidates and their campaign committees to make constitutionally protected decisions about when and how much to speak in an election.”

While a decision in Cruz’s favor could effectively allow wealthy donors to bribe lawmakers, Cruz has a very good chance of winning in a Supreme Court where Republicans control six of the nine seats on the court.

Although current precedents theoretically allow Congress to enact campaign finance laws to prevent “corruption and the appearance of corruption,” the court ruling in Citizens United v. FEC (2010) defined the word “corruption” so narrowly that it basically makes no sense. And the current court is significantly more conservative than the one that made United citizens a dozen years ago.

Judge Brett Kavanaugh, for example, suggested in a 2002 email that he wrote when he was a White House official that there is “some constitutional issues“with laws capping the amount an individual donor can give to a candidate – something that even decisions like United citizens allowed.

Likewise, last July, the Supreme Court voted in favor of a party to block a California rule requiring the disclosure of certain political donors, and it did so despite the fact that United citizens explicitly asserted that disclosure laws have a solid constitutional foundation.

There is a very real chance, in other words, that a Supreme Court hostile to campaign finance regulation will join Cruz’s crusade. And if the court does, it could effectively make bribery of many members of Congress legal.

Ted Cruz fabricated a fake dispute to file this lawsuit

Cruz admits that he designed this lawsuit specifically to be able to challenge the restriction on loan repayments.

According to the Ministry of Justice, on the eve of the 2018 elections, Cruz loaned $ 260,000 to his campaign, which is $ 10,000 more than the amount that can be legally repaid from post-election funds. Additionally, while a federal regulation allows Cruz’s campaign to repay all that money using funds raised before the election, as long as it does so no later than 20 days after the election, the campaign has WHEREAS this deadline has passed to reimburse $ 250,000 of the loan of $ 260,000.

And, just in case there is any doubt as to why Cruz and his campaign made this unusual arrangement, Cruz and his campaign do not dispute that “the unique and exclusive motivation Behind Senator Cruz’s actions in making the 2018 loan and the actions of the committee pending repayment was to establish the factual basis for this challenge. Cruz was basically willing to risk $ 10,000 of his own money for the opportunity to bring down a federal anti-corruption law.

The Justice Department, for what it’s worth, argues that these machinations should doom his trial, citing Supreme Court cases establishing that plaintiffs cannot use federal courts to remedy “self-inflicted injuries’ – although, as Cruz’s lawyers note in their brief, it is common for civil rights plaintiffs to use similar tactics to organize prosecutions challenging racial discrimination, and the Court allowed such tactics in the past. It is therefore far from clear that Cruz is not authorized to carry out this pursuit.

And even if the court were to dismiss Cruz’s action, it’s likely that another candidate would make a legitimate loan to their campaign and then take a similar lawsuit.

So, in other words, even if the court decided to avoid the problems presented by this case and dismiss Cruz’s action, that decision would likely only delay the inevitable.

Supreme Court Allows Corruption By Narrowly Defining The Word “Corruption”

The Supreme Court established in Buckley v. Valeo (1976) that lawmakers can enact campaign finance regulations that mitigate “the danger of corruption and the appearance of corruption”. Yet while United citizens supposed to leave this aspect of Buckley in place, it has dramatically reduced the government’s ability to fight “corruption” by defining the word very narrowly.

Specifically, United citizens argued that federal and state campaign finance laws can only target “quid pro quo” deals, where money is offered in exchange for “political favors.” After United citizens, Congress can still prohibit donors from explicitly promising to write a check to a lawmaker if that lawmaker changes its vote on a pending bill. But other forms of corruption are protected by the interpretation of the Constitution by the Supreme Court.

Indeed, the opinion of Kennedy J. in United citizens framed influence buying by donors as an affirmative good:

Favoritism and influence are not. . . avoidable in representative politics. It is in the nature of an elected official to favor certain policies and, as a necessary corollary, to favor the voters and contributors who support these policies. Of course, a substantial and legitimate reason, if not the only one, to vote for one candidate or to contribute to another is that the candidate will respond by producing the political results that the supporter favors. Democracy is based on responsiveness.

If you accept the legitimacy of this reasoning, then Cruz has strong arguments. Of course, lifting restrictions on candidate loan repayments would allow lobbyists and wealthy donors to put money straight into the pockets of lawmakers. But, according to the definition of “corruption” put forward by United citizens, it’s not entirely clear why lawmakers cannot charge lobbyists $ 1,000 an hour for their time – until lawmakers and the lobbyist come to an explicit matching deal on a political issue. before Congress.

If the Court wants to establish that elected officials cannot rely on United citizens get rich personally, Ted Cruz for the Senate gives the Court a perfect opportunity to do so. The Justice Department argues that the court should maintain the loan repayment provision that Cruz challenged, as it allows for personal donations to lawmakers of a different nature than those envisioned by the court’s previous campaign fundraising cases.

“When a campaign uses a contribution to finance routine campaign activities, the contribution helps the candidate by slightly improving his chances of winning, but it does not add to the personal wealth of the candidate,” says the Department of Justice in his brief. “But when a campaign uses a contribution to repay the candidate’s loan, every dollar donated by the contributor ultimately goes into the candidate’s pocket. “

The Justice Department also cites a list of existing ethical rules, including a rule of Congress that prohibits members of the House and Senate from accepting gifts over $ 50, which prevents federal officials from using their office to get rich. And he notes that the Constitution itself recognizes the danger of federal officials accepting personal gifts, prohibiting them from accepting “any gift, emolument, function or title, of any nature whatsoever, of any king, prince or foreign state. (Although, in fairness, the courts did not exactly apply this provision with any rigor when Donald Trump was president.)

So far, however, the Roberts Court has been reluctant to restrict the power of wealthy donors to shape elections – or spend money to maximize their influence over lawmakers. Perhaps the Court will decide in Ted Cruz for the Senate that putting money straight into a congressman’s pocket is going too far.

But, given the court file, I wouldn’t bet on that.