Federal Election Commission v. Cruz
Does Section 304 of the Bipartisan Campaign Reform Act, which limits the repayment of a candidate's personal campaign loans using post-election contributions to $250,000, violate the First Amendment's protection of free speech?
The Decision
6-3 decision · Opinion by John G. Roberts Jr. · 2022
Majority Opinion— John G. Roberts Jr.concurring ↓dissent ↓
In a 6–3 decision authored by Chief Justice John G. Roberts Jr., the Supreme Court struck down the $250,000 loan repayment cap as a violation of the First Amendment. The Court held that the restriction burdened core political speech and that the government had not demonstrated a sufficiently important interest to justify that burden.
The majority first addressed the threshold issue of standing. The FEC had argued that Cruz's injury was self-inflicted because he deliberately structured the loan to exceed the cap. The Court rejected this argument, holding that Cruz suffered a concrete injury — the inability to be fully repaid — that was directly traceable to the challenged statute. The fact that Cruz may have had strategic litigation motives did not negate the reality of his financial harm.
Turning to the merits, the majority reasoned that Section 304 imposed a significant burden on political speech. By limiting a candidate's ability to recover personal loans, the law deterred candidates from loaning money to their campaigns in the first place. Since spending money on one's own campaign is a form of political expression protected by the First Amendment, a law that discourages such spending operates as a restraint on speech. The Court emphasized that the restriction did not merely regulate the mechanics of campaign finance but struck at the ability of candidates — especially challengers and newcomers who may lack access to established donor networks — to fund their own political messages.
The Court then applied the 'closely drawn' standard of scrutiny used in campaign finance cases, under which the government must show that the law serves a sufficiently important interest and is closely drawn to avoid unnecessary restriction of First Amendment freedoms. The majority found that the government's anti-corruption rationale fell short. The FEC argued that post-election contributions used to repay candidate loans posed a special corruption risk because the money effectively went into the candidate's personal bank account. The Court acknowledged this theoretical concern but found that the government had not provided sufficient evidence that this particular mechanism — post-election repayment of personal loans — gave rise to quid pro quo corruption or its appearance in practice. Existing contribution limits already capped how much any single donor could give, and the Court was unwilling to accept the government's speculative theory as justification for an additional restriction on political speech.
The majority concluded that Section 304 could not survive constitutional scrutiny because it imposed a meaningful burden on First Amendment activity without an adequate governmental justification. The statute was therefore unconstitutional.
Concurring Opinions
There were no separately filed concurring opinions of particular note in this case; the six justices in the majority joined the Chief Justice's opinion in full.
Dissenting Opinions
Elena Kaganjoined by Stephen G. Breyer, Sonia Sotomayor
Justice Kagan argued that the majority failed to properly credit Congress's reasonable judgment that post-election loan repayments pose a distinctive corruption risk. She contended that when a post-election contribution is used to repay a candidate's personal loan, the donor is effectively writing a check to a sitting officeholder — a dynamic that creates a heightened and common-sense risk of quid pro quo corruption that Congress was entitled to address.
- The dissent emphasized that the loan repayment scenario is qualitatively different from ordinary campaign contributions because the money ends up in the personal bank account of an elected official, not in a campaign fund, creating a uniquely direct financial benefit that donors and officeholders both understand.
- Justice Kagan argued that the majority applied an improperly demanding standard of evidence, effectively requiring Congress to prove actual instances of corruption rather than allowing it to legislate prophylactically based on the obvious risks inherent in the arrangement.
- The dissent warned that the decision continued a troubling trend of the Court substituting its own judgment for that of Congress on empirical questions about corruption, further narrowing the space in which elected representatives can regulate money in politics to protect democratic integrity.
- Kagan criticized the majority for understating the burden that the law imposed, arguing that the $250,000 cap was a modest restriction that left candidates free to loan unlimited amounts to their campaigns and to be repaid from pre-election contributions, making the actual First Amendment burden minimal.
Background & Facts
The Bipartisan Campaign Reform Act of 2002 (often called BCRA or the McCain-Feingold Act) included a provision — Section 304 — that placed a cap on how much money a candidate could be repaid from post-election fundraising for personal loans they made to their own campaign. Specifically, if a candidate loaned their campaign more than $250,000 of their own money, any amount above that threshold could only be repaid using funds raised before Election Day. After the election, the campaign could not use newly raised contributions to reimburse the candidate for any loan amount exceeding $250,000. Any unreimbursed portion of the loan above that limit would, after a set period, effectively be converted into a contribution from the candidate to their own campaign — meaning the candidate simply lost that money.
Senator Ted Cruz of Texas challenged this law. In the final days before his 2018 Senate reelection campaign, Cruz deliberately loaned his campaign $260,000 — intentionally exceeding the $250,000 cap by $10,000. He did this specifically to create a real, concrete legal injury that would give him standing to challenge the statute in court. His campaign had sufficient pre-election funds to repay the full loan before the deadline but chose not to, so that the $10,000 overage would be subject to the statutory restriction. Cruz and his campaign committee then filed suit, arguing that Section 304 violated the First Amendment.
A three-judge panel of the U.S. District Court for the District of Columbia ruled in favor of Cruz, striking down the loan repayment cap as unconstitutional. The panel found that the restriction burdened political speech and was not justified by a sufficient governmental interest in preventing corruption or its appearance. The Federal Election Commission (FEC) then appealed directly to the Supreme Court, as federal law provides for direct appeal in cases where a federal statute is struck down by a three-judge district court.
The Supreme Court agreed to hear the case because it raised an important First Amendment question about the limits of campaign finance regulation. The case also arrived at a moment when the Court had been increasingly skeptical of campaign finance restrictions, having narrowed the permissible justifications for such laws in prior decisions. The question of whether this particular restriction was sufficiently tied to preventing corruption — the only interest the Court has recognized as justifying limits on political spending — made the case a significant test of First Amendment doctrine.
The Arguments
The FEC argued that the loan repayment limit served an important anti-corruption purpose by preventing a specific risk: that post-election contributors who help repay a candidate's personal loans are essentially putting money directly into the candidate's pocket, creating a heightened danger of quid pro quo corruption or its appearance.
- Post-election contributions used to repay personal loans are uniquely dangerous because the money goes directly to the winning candidate personally, not to the campaign, creating a more direct line between the donor and a personal financial benefit to the officeholder.
- Congress has broad latitude to make prophylactic rules to guard against corruption, and the $250,000 cap was a reasonable, modest limit that still allowed substantial loan repayment from post-election funds.
- Cruz lacked proper standing because his injury was entirely self-inflicted — he deliberately structured the loan to exceed the cap and then intentionally declined to repay it with available pre-election funds, manufacturing a legal dispute rather than suffering a genuine harm.
Cruz argued that the loan repayment cap unconstitutionally burdened political speech by deterring candidates from lending money to their own campaigns — a form of core political expression — and that the government could not demonstrate a sufficiently direct connection between the law and the prevention of actual corruption.
- The loan repayment restriction discourages candidates from making personal loans to fund their own political speech, because they risk being unable to recover funds they lent above $250,000, effectively penalizing self-funded campaign expression.
- The government failed to identify any evidence of actual quid pro quo corruption linked to the repayment of candidate loans from post-election contributions, relying instead on speculation about the potential appearance of corruption.
- The statute was not closely drawn to any legitimate anti-corruption interest because existing contribution limits and disclosure requirements already addressed the risk of corruption from post-election donations without the additional burden of a loan repayment cap.