U.S. Supreme Court to Consider Senator Cruz’s Campaign Finance Challenge

Sept 30 (Reuters) – The U.S. Supreme Court on Thursday agreed to hear the Federal Election Commission’s bid to restore a campaign finance law that caps the amount of money that candidates can be reimbursed for personal loans to their campaigns in a challenge brought by Republican Senator Ted Cruz.

The justices took up the FEC’s appeal of a lower court ruling that found that the cap violates the U.S. Constitution’s First Amendment guarantee of freedom of speech by unjustifiably burdening political expression.

The case involves a provision of a 2002 campaign finance law that limits the amount of money that candidates can accept from donors after an election as they try to recoup money they personally lent to their formal campaign organizations.

The measure – part of the Bipartisan Campaign Reform Act – imposes a ceiling of $250,000 on payments from donations made after an election even if candidates made loans exceeding that sum.

Cruz sued the FEC, challenging the constitutionality of the law that the agency enforces, after his successful 2018 Senate re-election race in Texas against Democratic rival Beto O’Rourke. Cruz had lent his campaign organization $260,000 but was limited by the law to a $250,000 reimbursement from his campaign.

The commission has said the law reduces what is known as quid pro quo corruption – a Latin phrase meaning a favor for a favor – and the appearance of corruption by limiting the amount of money solicited by candidates after an election to repay campaign debt.

Campaign finance watchdogs have said that practice increases donor expectation for official favors. Such money goes directly to candidates rather than to their campaign organizations.

In court papers, Cruz said the law was never designed as an anti-corruption measure, but rather to level the playing field between candidates of different personal wealth.

A Washington-based panel of three federal judges in June unanimously struck down the reimbursement as unconstitutional, calling the government’s arguments about undue influence hypothetical.

Democratic President Joe Biden’s administration, representing the FEC, appealed that ruling to the Supreme Court.

The administration warned of a “heightened risk of actual and apparent quid pro quo corruption” and said Cruz did not have proper legal standing to pursue the case because the loan and repayment were made expressly for the purpose of challenging the law in court.

Cruz, who unsuccessfully sought his party’s 2016 presidential nomination and later became a prominent supporter of former President Donald Trump, was first elected to represent Texas in the U.S. Senate in 2012.

(Reporting by Andrew Chung in New York; Editing by Will Dunham)