As we previewed in the fall, the Supreme Court today struck down the longstanding statutory prohibition on the use of funds raised after Election Day to repay a candidate loan in Federal Election Commission v. Cruz.  Although the outcome of the case—which was brought by Senator Ted Cruz (R-TX) following his re-election in 2018—was far from a surprise, the Court’s 6-3 decision makes clear that a supermajority of the current Court takes a deeply skeptical view on a wide array of campaign finance regulations. 

In his opinion for the Court, Chief Justice John Roberts reasoned that Section 304 of the Bipartisan Campaign Reform Act of 2002 (“BCRA”) was unconstitutional because the provision unduly restricts the rights of candidates and their campaigns to engage in political speech.  While the Court’s ruling concerns the relatively narrow issue of candidates loaning funds to their own campaigns, today’s decision could have implications for the broader campaign finance system. 

For example, after holding that Senator Cruz had standing to pursue his challenge, the Court opened its discussion of the merits of that challenge by emphasizing that the prevention of “quid pro quo” corruption or the appearance thereof is the only “permissible ground for restricting political speech.”  In so doing, the Court again rejected as a legitimate basis for regulating campaign contributions the desire to “limit the general influence a contributor may have over an elected official.”  While acknowledging that the “line between quid pro quo corruption and general influence may seem vague,” the majority reasoned that the First Amendment requires the Court to “err on the side of protecting political speech rather than suppressing it” when considering restrictions on money in politics.  This presumption against regulation is yet another indication of the shrinking sphere of Congress’s power to regulate money in politics.

Perhaps more significantly, the Court expressed deep skepticism for campaign finance regulations characterized by the majority as a “prophylaxis-upon-prophylaxis approach” to preventing corruption.  In this vein, the Court pointed to individual contributions limits, as well as the requirement that “nontrivial contributions” be publicly disclosed, as the primary—and perhaps only permissible—measure of defense against prohibited corruption.  As for other regulations going beyond the basic contribution limits and disclosure requirements, the majority explained that incorporating an added layer of protection against corruption “is a significant indicator that the regulation may not be necessary for the interest it seeks to protect.”  Taken together with the earlier discussion of the limited scope of Congress’s regulatory authority, this language strongly suggests that all but the most narrowly drawn campaign finance regulations will be greeted with significant scrutiny by the current Court.

Finally, even beyond these strong presumptions against regulation, the Court’s opinion underlines the significant evidentiary burden the government must carry to defend its regulations.  In particular, the Court explained that, in justifying a particular campaign finance regulation, the government “must do more than ‘simply posit the existence of the disease sought to be cured.’ . . .  It must instead point to ‘record evidence or legislative findings’ demonstrating the need to address a special problem.”

Much like the district court before it, the majority then emphasized that the FEC was “unable to identify a single case of quid pro quo corruption” in the context of the loan-repayment rules, the absence of which the majority described as “significant.”  The majority further dismissed the “handful of media reports and anecdotes” presented by the agency as evidence of the special risks associated with repaying candidate loans after an election” as “pretty meager.” In the majority’s view, such evidence addresses—at most—only the broader appearance of corruption within the federal system.

Interestingly, the majority also rejected an argument advanced by the dissenting Justice Kagan that contributions used to repay candidate loans are particularly concerning because they are more obviously analogous to gifts to the candidate him or herself, in that the contribution to the campaign will ultimately find its way to the candidate’s own bank account.  In addition to suggesting that no winning candidate would struggle to raise sufficient funds to repay a personal debt to his campaign, the majority noted that the challenged regulation did not prohibit any contributions to be used to repay a candidate debt.  Rather, the regulation merely limited the amount of funds contributed after an election that could be so used.  Reasoning that the regulation thus implicitly acknowledges that such contributions are not necessarily problematic, the Court appeared to largely fall back again on contribution limits and disclosure requirements as the ultimate failsafe against untenable corruption.

As we predicted, today’s decision—while ostensibly narrow in its immediate impacts—signals a continuing and marked shift in favor of challenges to federal campaign finance regulations.  Given the Court’s clear rejection of any but the narrowest of legitimate purposes for such regulations, as well as the increasingly high presumption against essentially anything other than simple contribution limits and disclosure requirements, it is difficult to say with certainty that any current regulation is safe from challenge.