The Supreme Court on Monday struck down a limit on the amount of post-election funds that can be used to pay back personal loans from candidates, further chipping away at federal campaign finance regulations.
In a 6-3 decision that split the court cleanly along ideological lines, Chief Justice John Roberts wrote for the majority that a cap that allowed federal political candidates to only use up to $250,000 in post-election fundraising dollars to pay back a personal loan from the candidate was unconstitutional.
The case was brought by Sen. Ted Cruz (R-Texas), who intentionally sought to challenge the cap by personally loaning his campaign $260,000 shortly before his 2018 reelection.
Roberts said neither Congress nor the Justice Department had offered an adequate rationale to justify the burden on the First Amendment which the court has previously found to be posed by campaign finance limits. The chief justice also argued that capping the amount of money a candidate can use to repay post-election loans could shrink the pool of candidates willing to run for office.
“The ability to lend money to a campaign is especially important for new candidates and challengers,” wrote Roberts, an appointee of former President George W. Bush. “As a practical matter, personal loans will sometimes be the only way for an unknown challenger with limited connections to front-load campaign spending. … And early spending — and thus early expression — is critical to a newcomer’s success.”
The Justice Department contended that the law served anti-corruption interests that are particularly acute when donations to a newly-elected official’s campaign effectively flow directly into the official’s pocket.
However, Roberts said that concern made little sense because the donations are still capped at the federal limit of $2,900.
“The extent of the burden may vary depending on the circumstances of a particular candidate and particular election. But there is no doubt that the law does burden First Amendment electoral speech, and any such law must at least be justified by a permissible interest,” the chief justice wrote.
Writing for the court’s liberal wing, Justice Elena Kagan said her conservative colleagues’ unwillingness to recognize the potential for corruption in such arrangements was baffling.
“The theory of the legislation is easy to grasp. Political contributions that will line a candidate’s own pockets, given after his election to office, pose a special danger of corruption,” Kagan wrote in dissent. “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, an appointee of former President Barack Obama, also said the high court’s decision to strike down the provision was certain to increase public perceptions that money is effectively buying political results in the U.S.
“In allowing those payments to go forward unrestrained, today’s decision can only bring this country’s political system into further disrepute,” she wrote. “It takes no political genius to see the heightened risk of corruption.”
The cap is a product both of a Federal Election Commission rule and a federal law that was part of the Bipartisan Campaign Reform Act of 2002, better known as McCain-Feingold.
The Roberts court has long been hostile to BCRA, chipping away at the law in favor of less restrictions on political spending in the name of free speech. Despite Roberts increasingly straying from the rest of the conservative justices in other areas of the law, he has been an almost entirely reliable opponent of campaign finance restrictions during his time on the bench.
Most famously, the Supreme Court ruled in the 2010 Citizens United decision that the government was prohibited from limiting independent expenditures from corporations and unions.
That and other related decisions eventually cleared the way for a decade of free-spending super PACs, along with so-called “dark money” groups that have spent untold hundreds of millions on political activities without fully disclosing their donors.
However, Roberts and the other conservative justices did not completely gut what remains of BCRA in Monday’s ruling, as some conservatives had hoped.
Senate Minority Leader Mitch McConnell (R-Ky.), who has long looked to eviscerate the law, had urged the Supreme Court to throw out the entirety of the law in light of the Cruz case.
“There is no need to keep what remains of BCRA on the books. This Court should wipe the slate clean,” Don McGahn, McConnell’s counsel, who served as White House counsel to former President Donald Trump during his term in office and also as chair of the Federal Election Commission, wrote in a friend of the court brief filed late last year.
That is not a route the court took, with the conservative justices largely steering clear of that conversation during oral arguments in January.