Supreme Court hears Ted Cruz’s challenge to fundraising law campaign around loans



Tuesday night, with almost no one watching, Sen. Sheldon Whitehouse, Democrat of Rhode Island, spoke in the Senate to once again protest the influence of black money on the federal justice system, and its influence especially on the new, carefully created 6-3 conservative majority on the US Supreme Court.

Now, the court-chosen super-majority of 6 to 3 major donors is delivering massive victories to the interests of those donors. And the American people can smell what Judge Sotomayor aptly called the stench of a captured court.

But Whitehouse’s path in his argument was novel. In his remarks, he took aim at the ridiculously toothless commission the administration has set up, supposedly to study problems with the federal justice system. These problems, of course, have been caused in large measure by the deluge of black money in the confirmation process, most of it coming from economic and ideological sources that have many cases before the court. However, the defunct commission chose to distribute, in Whitehouse’s words, “the pablum of the faculty lounge.”

Yes, they pointed out the need for a code of ethics for judges, which makes sense because Supreme Court justices have the lowest ethical standard of all senior federal officials, but pointing it out is a bit like reporting a flat tire on a car total. Consider the facts the commission ignored. A private, partisan, anonymously funded organization, the Federalist Society, hand-picked the final three Supreme Court justices. President Trump and his White House attorney admitted that they had contracted, their word, the Federalist Society to the White House.

Senator Hatch, our former colleague, former President of the Judiciary, was asked if this role was outsourced to the Federalist Society and he said absolutely right. No other democracy in the world has had such a ridiculous system of selecting judges. It’s bad. It’s getting worse. Anonymous donations have helped right-wing front groups mount a $400 million campaign to capture and control the Court, with no transparency on who gave the money. Or more importantly, what they had before the Court whose judges they installed. It is shameful. And believe me, no one spends $400 million for no reason.

Whitehouse’s case is so simple it’s almost beggarly. As he noted, the previous administration* did not hesitate to bluntly admit the truth of what Whitehouse was saying. The most recent former president* didn’t know enough about the law and case law to jump into a spade, as the great Sean O’Faolain once said in another context. He was more than happy to smile and slap his nominees while Mitch McConnell blasted through the Senate confirmation process to set up the Federalist Society’s Triple-A ball club where he could do the most good for conservative donors and least good for the country. After all, the filthy flow of money that has rotted the foundations of our institutions began while the former president* was still “firing” people on his TV show.

The Court rendered its decision in Citizens United v. FEC in 2010, in dark times even before the birth of this blog. In fact, along with the destruction of voting rights, the demolition of campaign finance laws has been one of Chief Justice John Roberts’ main enthusiasms since he first entered conservative legal circles. (Two sides of the same coin, if you think about it.) And, in a week, Senator Whitehouse and the rest of us could have another object lesson in this phenomenon.

UNITED STATES SEPTEMBER 29 Sen Sheldon Whitehouse, DR, attends the Senate Judiciary Committee hearing titled, 'The Unconstitutional Texas Abortion Ban and the Role of the Shadow Record,' at the Senate Office Building hart in washington, dc, on wednesday september 29, 2021photo by tom williamscq roll callpool
Whitehouse has been singing this tune for a while.

Tom WilliamsGetty Images

Next Wednesday, the Supreme Court will hear the case of FEC vs. Ted Cruz for the Senate. At issue is the procedure by which candidates can lend money to their campaigns and then adjust the repayment process in such a way that a successful candidate makes a profit while their donors buy influence. Ian Miller at Vox explains how it works:

When a campaign receives a pre-election donation, this donation is generally subject to strict rules preventing it from being spent to enrich the candidate. After the election, however, donors who donate money to help pay off a candidate’s loan effectively funnel that money directly to the candidate – who at this point could be a powerful elected official.

A legislator with sufficiently skilled accountants could moreover effectively structure such a loan to allow lobbyists and other donors to help the legislator to benefit directly from it. According to the Los Angeles Times, for example, in 1998 Representative Grace Napolitano (D-CA) granted a loan of $ 150,000 to her campaign at an interest rate of 18% (although she subsequently reduces this interest rate to 10%). In 2009, Napolitano would have raised $ 221,780 to repay this loan – of which $ 158,000 was classified as “interest”. Thus, in 11 years, the loan would have brought Napolitano nearly $ 72,000 in profits.


Now comes Tailgunner Ted Cruz, who wants to remove those rules and limitations on loan repayments to candidates for federal office. I hope I don’t need to hang pink neon lights around the loophole for personal enrichment and influence peddling that a ruling in favor of Cruz’s campaign would open up in our fundraising regulations. already seedy campaign. And you’d have to have been on Mars for the past decade not to make Cruz the frontrunner every time the Court’s decision drops. Which is good, because, as Millhiser reports, the Tailgunner brought this case specifically to blast this particular regulatory device.

According to the Ministry of Justice, on the eve of the 2018 elections, Cruz loaned $ 260,000 to his campaign, which is $ 10,000 more than the amount that can be legally repaid from post-election funds. Additionally, while a federal regulation allows Cruz’s campaign to repay all that money using funds raised before the election, as long as it does so no later than 20 days after the election, the campaign has WHEREAS this deadline has passed to reimburse $ 250,000 of the loan of $ 260,000.

And, just in case there is any doubt as to why Cruz and his campaign made this unusual arrangement, Cruz and his campaign do not dispute that “the unique and exclusive motivation Behind Senator Cruz’s actions in making the 2018 loan and the actions of the committee pending repayment was to establish the factual basis for this challenge. Cruz was basically willing to risk $ 10,000 of his own money for the opportunity to bring down a federal anti-corruption law.

And, in a few years, if he’s still in office, and if the rising seas haven’t swept Rhode Island to Labrador, Sheldon Whitehouse will rise in the Senate and again demonstrate the corrupting influence of money. on the process of appointing a Supreme Court which will then be responsible for rendering a judgment on the corrupting influence of money. And the sewage water wheel spins in circles.

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