A case, brought by Ted Cruz, could effectively wind up legalizing bribery.
In this Supreme Court, any lawyer who dares to defend a campaign finance law knows they have little chance of prevailing. And Wednesday’s oral argument on one of the few remaining safeguards against excessive money in politics was no exception.
The unfortunate soul tasked with defending a niche but important anti-corruption law was Malcolm Stewart, a veteran advocate and deputy solicitor general of the United States. But at least five of the Court’s six Republican appointees displayed no openness to Stewart’s arguments, and no fear of the very real possibility that rejecting his arguments would effectively legalize bribery.
The case is Federal Election Commission v. Ted Cruz for Senate, and it involves a federal law intended to prevent campaign donors from putting money directly into the pockets of elected officials. Specifically, the law permits candidates to loan money to their own campaigns, but forbids the campaign from repaying more than $250,000 of that loan from funds raised after the election takes place.
Typically, federal law draws a sharp line between money donated to a campaign, which can only be spent on the election effort, and money given directly to a candidate, which is ordinarily not allowed. But loan repayments exist in a gray area between these two kinds of donations. Yes, money repaid to a candidate ostensibly just reimburses that candidate for money they fronted during the campaign. But any dollar given by donors to repay such loans still goes into the pocket of a former candidate who may very well be a powerful elected official by the time they receive the money.
Without a cap on loan repayments, elected officials with clever accountants could profit off of their donors. In 1998, for example, Rep. Grace Napolitano (D-CA) made a $150,000 loan to her campaign at 18 percent interest (though she later reduced that interest rate to 10 percent). By 2009, she’d reportedly raised $221,780 to repay that loan, meaning that she earned at least $71,000 in profits.
Thus, should this challenge to the repayment cap succeed — and it appears overwhelmingly likely to succeed — elected officials could potentially make enormous loans to their campaigns at high interest rates, and then use those loans as a vehicle to accept bribes from lobbyists and other donors who want to trade money for access to the official.
The Court’s conservative majority appears eager to tear down one of the few remaining limits on campaign donations
To understand how we got to the point where the Supreme Court could effectively legalize bribery, it’s helpful to turn back the clock more than a decade, to the Court’s decision in Citizens United v. FEC (2010). That decision injected a kind of willful ignorance of how campaign donors can buy access to elected officials, and use that access to secure their policy goals, into the Court’s understanding of the Constitution.
Prior to Citizens United, the Court held that lawmakers may regulate campaign finance in order to prevent “corruption and the appearance of corruption.” But Citizens United redefined the word “corruption” so narrowly as to render it meaningless. After that decision, only “quid pro quo” arrangements, where money is exchanged for “political favors” count as corruption. And merely gaining privileged access to an elected official does not count as a “political favor.”
So, it is still unlawful for a lobbyist to say to a lawmaker, “Here is $2,000, but you can only have it if you vote ‘no’ on the Freedom to Vote Act.” But if a lobbyist says, “Here’s $2,000. I would like to come meet with you to explain why you should vote against the Freedom to Vote Act,” that’s fine.
Stewart and the rest of the team of DOJ lawyers defending the loan repayment law hoped to convince the Court that any money that benefits an elected official personally, even if that money simply repays a loan the official made to their own campaign, is different in kind from other campaign donations. In other words, that it should be more easily regulated than the kind of donations contemplated by cases like Citizens United. But the Republican appointees showed little sympathy for this argument.
Justice Amy Coney Barrett, for example, claimed that there “wasn’t any actual evidence of quid pro quo corruption causing problems” in the context of loan repayment — which is close to an explicit statement that she believes this law violates Citizens United. Justice Brett Kavanaugh asked why a still-existing federal limit on the amount of money that an individual donor may give to a candidate, currently $2,900, isn’t a sufficient safeguard against corruption. He also suggested that the loan repayment limit is invalid because it imposes a “chill” on candidates who wish to donate money to their campaigns.
Meanwhile, the three most conservative justices — Clarence Thomas, Samuel Alito, and Neil Gorsuch — gave no indication that they’d break with their historic pattern of opposing campaign finance laws. Alito spent much of the morning appearing to mock Stewart’s arguments.
Even Stewart seemed to know he was doomed from the beginning
One sign the Justice Department recognized that nearly any attempt to defend a campaign finance law before this conservative Court is doomed: Stewart spent the bulk of his argument time on procedural and jurisdiction arguments that could give the Court a reason to dismiss this case without deciding it. But those arguments are unlikely to receive five votes — and at least one of Stewart’s jurisdictional claims may not even receive a single vote.
As the Justice Department explained in its brief, Sen. Cruz manufactured this case in order to give the Court an opportunity to strike down the loan repayment law. On the day before the 2018 election, Cruz lent his campaign $260,000 — $10,000 more than the amount that could be repaid with funds raised after the election.
Cruz’s campaign then waited until more than 20 days after the election to refund him $250,000, apparently because a federal regulation gives the campaign a 20-day window to repay loans of any amount (using funds raised prior to the election).
Yet, while Stewart claimed that the Court cannot hear a suit seeking to remedy such “self-inflicted injuries,” even some of the liberal justices appeared unmoved by this argument. And several of the conservative justices ridiculed it. As Justice Clarence Thomas quipped, under Stewart’s theory, why wasn’t Homer Plessy’s decision to sit in a whites-only rail car in order to challenge a law mandating segregation a self-inflicted injury?
Late in the oral argument, Justice Elena Kagan floated a way to mitigate the government’s likely loss in this case — perhaps the Court could only strike down the regulation giving Cruz 20 days to receive full repayment of his loan, rather than the broader statute capping the size of the reimbursement. Kagan has suggested in the past that the way for liberals to navigate a conservative Court is to take “big questions and make them small.”
But, while Chief Justice John Roberts expressed some openness to Kagan’s approach, or to a related approach that would require Cruz to restart his lawsuit in a trial court in order to challenge the regulation, he was the only Republican appointee who showed such openness.
In the end, it appears very likely that Cruz will prevail, and that clever elected officials will gain the ability to accept legal bribes.