May 16, 2022
In a decision Monday that liberal Justice Elena Kagan warned will further corrupt the nation's money-dominated political system, the U.S. Supreme Court's right-wing majority struck down a campaign finance regulation limiting federal candidates' ability to use campaign funds to repay personal loans.
"When they give money to repay the victor's loan, they know he will be in a position to perform official favors."
Established by the Bipartisan Campaign Reform Act of 2002, the rule barred candidates from using more than $250,000 in campaign funds collected after an election to recoup their loans to their own campaign.
The legal challenge to the cap was brought by Sen. Ted Cruz (R-Texas), who intentionally violated the $250,000 cap during his 2018 reelection bid in order to pursue a repeal of the limit, which he characterized as a violation of free speech.
A day before he was reelected in 2018, Cruz loaned his campaign committee $260,000, $10,000 over the limit--laying the foundation for his legal challenge to the cap... [H]e could have been repaid in full by campaign funds if the repayment occurred 20 days after the election. But Cruz let the 20-day deadline lapse so that he could establish grounds to bring the legal challenge.
The high court's 6-3 decision strikes another blow to the nation's campaign finance restrictions, which were already weak and rife with loopholes that big donors readily and frequently exploit.
"While the direct effects of this decision are limited to the narrow federal provision at issue in the case, it reveals a Supreme Court increasingly out of step with the American people--who overwhelmingly recognize that unchecked campaign giving poses profound risks to the integrity of our democracy," said Trevor Potter, the president of Campaign Legal Center. "More immediately, the ruling could imperil an array of similar restrictions on post-election loan repayments adopted at the state and local level out of legitimate concerns over corruption."
"Big Republican donor interests built their supermajority to deliver wins like this one."
Rep. Bill Pascrell (D-N.J.) added on Twitter that "the right-wing Supreme Court has issued yet another preposterous decision effectively legalizing government corruption at the request of Republicans."
In her dissent, Kagan argued that the court's ruling will make even more common the kinds of "crooked exchanges" that have long sullied the U.S. political system, which is awash in money from corporations and ultra-wealthy individuals.
"Political contributions that will line a candidate's own pockets, given after his election to office, pose a special danger of corruption," Kagan argued, pointing to the issue of recouping personal loans. "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 donors well understand his situation, and are eager to take advantage of it. In short, everyone's incentives are stacked to enhance the risk of dirty dealing."
Kagan went on to contend that quid pro quos--political favors carried out in exchange for money, in this case post-election donations--could become more rampant thanks to the Supreme Court's new ruling, which was authored by Chief Justice John Roberts, who helped orchestrate the high court's infamous Citizens United ruling and other attacks on campaign finance law.
"Post-election donors can be confident their money will enrich a candidate personally," Kagan wrote. "And those donors have of course learned which candidate won. When they give money to repay the victor's loan, they know--not merely hope--he will be in a position to perform official favors. The recipe for quid pro quo corruption is thus in place: a donation to enhance the candidate's own wealth (the quid), made when he has become able to use the power of public office to the donor's advantage (the quo)."
"The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption," she continued. "In allowing those payments to go forward unrestrained, today's decision can only bring this country's political system into further disrepute."
In a statement, Sen. Sheldon Whitehouse (D-R.I.) voiced agreement with Kagan's dissent, calling the high court's ruling "another victory for right-wing donors in their assault on our campaign finance system, and another step toward unlimited special-interest spending in our elections."
"Big Republican donor interests built their supermajority to deliver wins like this one," Whitehouse added, "wins that help special interests skirt our democratic process to achieve what they want."
This story has been updated to include new comments from Campaign Legal Center.
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