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Candidate loan repayment limitation ruled unconstitutional in Ted Cruz for Senate, et al. v. FEC (D.D.C. 1:19-cv-00908) – FEC.gov

On June 3, 2021, a three-judge panel of the United States District Court for the District of Columbia (the court) ruled that section 304 of the Bipartisan Campaign Reform Act (BCRA), which limits the repayment of candidate loans, is unconstitutional.

Background

On April 1, 2019, Ted Cruz for Senate and Senator Ted Cruz (Plaintiffs) filed suit against the Commission alleging that section 304 of BCRA (52 U.S.C. § 30116(j)) violates the First Amendment. That section prohibits campaigns from repaying more than $250,000 in personal loans incurred by the candidate using contributions made after the date of an election. Plaintiffs contend that the loan-repayment limit unconstitutionally infringes the First Amendment rights of the Senator, his campaign, and any individuals who might seek to make post-election contributions.

Analysis

The court found that the loan repayment limit restricts political speech and association for candidates and their contributors by imposing a constraint on the repayment options available to candidates who choose to make personal loans to their campaigns. Post-election contributions are subject to the same base limits as those made before an election. The court held that when layered upon the base limits, the loan-repayment limit places an additional restriction on pre-election expenditures and post-election contributions, which intrudes on fundamental rights of speech and association without serving a substantial government interest. As a result, the court concluded that because the Commission “failed to demonstrate that the loan-repayment limit serves an interest in preventing quid pro quo corruption, or that the limit is sufficiently tailored to serve this purpose, the loan repayment limit runs afoul of the First Amendment.”

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