US Supreme Court Strikes Down Limit on Federal Candidate Loan Repayments - State and Federal Communications

May 16, 2022  •  

US Supreme Court Strikes Down Limit on Federal Candidate Loan Repayments

United States Supreme Court Building

On May 16, the U.S. Supreme Court struck down a part of federal campaign finance law regulating the repayment of loans from candidates to their own campaigns.

Generally, Section 304 of the Bipartisan Campaign Reform Act of 2002 barred campaigns from using more than $250,000 of political contributions raised after the election day to repay a candidate’s personal loans to their campaign committee.

In striking down the law, the majority opinion, written by Chief Justice Roberts and joined by five other Justices, concludes the law “increases the risk that candidate loans over $250,000 will not be repaid in full, inhibiting candidates from making such loans in the first place.”

The majority in FEC v. Ted Cruz for Senate, et al. concluded the law burdens core political speech without proper justification. The majority found the Federal Election Commission failed to demonstrate that the loan-repayment limit serves an interest in preventing quid pro quo corruption.

The dissenting opinion, written by Justice Kagan and joined by Justice Breyer and Justice Sotomayor, argued the burden of the law is minimal and the reasoning behind the enactment of the law remains valid: money given after an election to a candidate’s campaign committee, which will go directly to the candidate as repayment for their loan to the campaign committee, creates a heightened risk of corruption.

Senator Ted Cruz, the plaintiff in the case, loaned his campaign committee $260,000 one day before he was reelected. While the amount was $10,000 over the limit, the campaign committee had a 20-day grace period in which Cruz could have been fully repaid. It has been reported Cruz allowed the repayment to lapse beyond that date in order to establish a legal basis for bringing a challenge to the law.

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