Tomorrow, the Supreme Court will examine the latest round in the decades-long constitutional controversy over federal limits on political campaign donations and spending. Lurking in the case is a bold attempt by a prominent Republican politician to get the Court to wipe out what remains of a frequently challenged 2002 law that brought major reforms. That’s what might ultimately be at stake, although the Court need not go that far to decide the case.
This report will discuss only that case. There will be a second hearing Wednesday, as the Court considers what Congress had in mind when it decided to reduce the impact on racial minorities of criminal sentences for cocaine crimes. That case will be discussed here in the morning, before the Justices go to the bench at 10 a.m.
The Court’s hearings are broadcast as “live” audio (no video) at Quick Links on the Court’s homepage – supremecourt.gov – and at c-span.org/supremecourt and C-Span Now App.
Campaign finance case: Federal Election Commission v. Senator Ted Cruz. Hearing starts at 10 a.m. and is scheduled for one hour.
Background: Historians of popular American idioms have suggested that the phrase “money talks” first appeared in 1903 in one of the nation’s long-time favorite magazines, the Saturday Evening Post. (Begun in 1821, the Post still exists but no longer appears weekly; it now comes out six times a year.) In modern U.S. political conversation, it is common to discuss not only how money talks, but how “Big Money” talks the loudest.
Either phrase expresses a truism, but one that has particular meaning as Americans continue to debate whether campaign donations and spending lead to corruption of elected officials. This is not about outright bribery, but rather about gaining influence. The Supreme Court has said repeatedly that Congress may constitutionally limit campaign finance only to prevent “quid pro quo” corruption – that is, paying money in hopes of gaining a favor – or the appearance of that.
Many Americans worry about money in politics, but from very different perspectives: some say there is not enough regulation, others say there is too much.
The Constitution is very much involved in the controversy, which has continued since Congress in 1897 passed the first law limiting contributions to federal officeholders. Article I, Section 4, clearly gives Congress the power to write laws to control federal elections. The First Amendment puts real restrictions on how Congress can use that power.
That Amendment explicitly protects free-speech rights, but also protects the unspecified but fully recognized separate right to “political association” – a significant shield in a nation where politics is generally run through two major political parties.
In recent years, the Supreme Court has increasingly interpreted those rights to be very expansive, with the result that regulation has diminished even as more and more money flows into national political campaigns.
Almost any American who has even a limited awareness of campaign financing likely has heard something about the Court’s 2010 decision in Citizens United v. Federal Election Commission. That involved the legality of a campaign commercial film that was critical of the presidential candidacy in 2008 of Hillary Clinton, then a U.S. Senator.
The Court, in what probably was the most sweeping constitutional defeat ever for restrictions on campaign finance, ruled that the First Amendment protects unlimited spending on campaign ads by corporations and labor unions (so long as the spending was not coordinated with a political party or a candidate – that is, was independent). There have been attempts, unsuccessful so far, to promote a constitutional amendment to undo that ruling.
On Wednesday, the Court will be studying a case growing out of what had been the most expensive U.S. Senate election race in history, in Texas in 2018 (it set the record at the time, but that has been surpassed several times in other races over the three years since then).
The Justices will look at one money issue in the Texas contest in which Republican Senator Ted Cruz defeated (by 2.6 points) a rising Democratic political figure, Robert Francis (“Beto”) O’Rourke, a three-term Representative in the House and, later, a presidential candidate and now a candidate for governor.
The specific issue now is how a federal law treats a loan that Senator Cruz made to his own campaign. One interesting feature of the case is that Cruz arranged the terms of that loan explicitly to set up a constitutional lawsuit so he could challenge that law. (That admitted fact figures in the case in a separate question: whether Cruz had any legal right to sue, since any legal harm he may have faced could have been “self-inflicted.” The Court will consider that, too, during the Wednesday hearing.)
While the loan controversy is interesting, what has widened the case’s potential significance is a request by Senator Mitch McConnell, Kentucky Republican and the GOP leader in the Senate. In what might be seen as political theater as much as legal argument, he has bluntly urged the Court to strike down all remaining restrictions under the Bipartisan Campaign Reform Act (BCRA), a sweeping 2002 law that embodies the current federal controls on campaign finance.
For years, Senator McConnell has been a leading challenger of such restrictions. Indeed, his name is on the Court’s 2003 decision that began what he now calls a process of “chipping away” at the constitutionality of BCRA’s provisions.
His legal brief in the Ted Cruz case ticks off a lengthy list of rulings by the Court, every one of which struck down or narrowed the scope of BCRA. The brief adds: “This Court has now spent the better part of two decades excising BCRA’s patently unconstitutional features….There is no need to let BCRA limp along, no need for further piecemeal surgery by this Court: the Court should strike the entire statute.”
That runs up against a tradition going back to 1793, six years after the Constitution was written – that is, the rule that the Supreme Court cannot give advisory opinions; it can only settle genuine legal questions that are clearly before it. That is backed up by the so-called “Ashwander doctrine” (it gets its name from a 1936 decision by the Court): if the Court can decide a case without answering a constitutional question that might be raised, it should do so.
Whether the Court will take seriously the McConnell proposal is unclear. His idea is not even mentioned in Senator Cruz’s own legal briefs in the case, nor in a separate brief supporting him by five other Republican senators. Moreover, it is not discussed by the Federal Election Commission’s legal papers in the case, or those filed by outsiders supporting FEC’s position.
Directly at issue Wednesday is the part of BCRA and regulations carrying it out that deal with a federal campaign that borrows money from the candidate personally, then seeks to pay it off after the election.
Once the election is over, the law says, the candidate is allowed to raise money to pay off the debt, but only up to a total of $250,000. If the debt is higher than that, the campaign can use leftover funds raised before election day to cover it, but must do that no later than 20 days after the balloting is over. If the 20-day deadline is not met, any debt beyond $250,000 cannot be repaid because the rules treat it as a contribution by the candidate, not a repayable debt.
The aim of those restrictions, the Federal Election Commission argues, is that the best way to avoid the appearance of corrupt financing in this situation is to require the candidate to do most fund-raising before election day, to avoid the appearance of raising money for the candidate’s own personal use. That appearance, FEC contends, does not arise if the amount raised after the election is only $250,000 or if leftover money is used to cover more than that.
When Senator Cruz ran for reelection in 2018, he raised more than $35 million. After the election, he had almost $2.4 million of that left over. Deciding he wanted to test the constitutionality of the loan repayment limits, he took action the day before the election. He loaned the campaign $260,000 – that is, $10,000 more than he was allowed to use to repay the loan after election day.
He and his staff let the 20-day deadline lapse, and then the campaign paid off $250,000 of what it owed him – leaving him with $10,000 that could not be repaid. The “loss” of that sum is what he claimed was his legal injury from the BCRA restriction. (One cannot sue to challenge a federal law just because one wishes to do so; a lawsuit must be based on a legal harm that can be proved.)
A lower federal court ruled for Cruz and his campaign, finding that he had been harmed as a legal matter, that he had a right to sue, and that the restrictions imposed too great a burden on his First Amendment rights.
The FEC appealed to the Supreme Court. Besides arguing the constitutional issue, the FEC contended that Cruz could not show any harm from the restriction, even if he did have a right to sue. Biden Administration lawyers are representing the agency. When the Supreme Court stepped in September 30, it postponed the right-to-sue issue until its hearing.
The questions before the Court: Did Senator Cruz have a right to sue to challenge the loan-repayment restriction? If he did, does that restriction violate his First Amendment rights? If he did not, does that end the case or can Cruz keep it alive on another theory about his rights?
Significance: The vivid reality is that the modern Court’s history in this field has been strongly negative toward campaign finance limitations. It has been sympathetic to the fact that modern election campaigns can cost a lot of money (especially for TV commercials). It also has been acutely sensitive to the idea that political expression is the highest form of speech for which the First Amendment was put into the Constitution.
The specific loan restrictions at issue in this case are an arcane part of the overall BCRA. But it is very common for federal candidates to pay for part of their campaigns by borrowing money, and many of them appear to be wealthy enough to finance their own efforts.
The anti-corruption rationale has led Congress repeatedly to enact new and wider-ranging limitations on campaign finance. The Ted Cruz case provides a new test of whether that rationale still has any persuasive power with a conservative Court majority.
That majority lately has been quite eager to reach out to make the fullest use of its powers. Is it energetic enough to reach Senator McConnell’s plea to nullify all of BCRA? That will be something to listen for tomorrow.
In this space tomorrow, there will be an analysis of the cocaine crimes cases – the Court’s last scheduled hearing during January.