Federal Election Comm'n v. Ted Cruz
The Supreme Court struck down a federal campaign finance rule that barred campaigns from using more than $250,000 in post-election donations to repay a candidate's personal loans, ruling the restriction placed an unjustified burden on political speech.
The decision limits Congress's ability to regulate post-election campaign contributions by requiring that any such restriction be backed by concrete evidence of actual corruption — not general concerns about political influence — and signals continued skepticism toward layered campaign finance regulations.
How it got here: A three-judge federal district court in Washington, D.C. struck down Section 304 on First Amendment grounds; the FEC appealed directly to the Supreme Court as authorized by federal law.
The Case in Depth
What happened
Senator Ted Cruz loaned $260,000 of his own money to his Senate campaign committee before the 2018 election. After winning, his campaign began repaying the loan — but a federal law, Section 304 of the Bipartisan Campaign Reform Act, barred campaigns from using more than $250,000 in post-election donations to repay candidate loans. His campaign stopped at $250,000, leaving $10,000 unpaid. Cruz and his committee sued the Federal Election Commission, arguing the repayment cap violated the First Amendment by deterring candidates from lending to their own campaigns.
The question before the Court
Does a federal law capping how much of a candidate's personal campaign loans can be repaid using post-election donations unconstitutionally restrict political speech?
The Court's answer
Yes — the Court ruled that the $250,000 cap on repaying candidate loans from post-election contributions violates the First Amendment. By restricting which funds a campaign can use to repay a candidate's personal loan, the law increases the risk that larger loans will never be fully repaid, which in turn deters candidates from lending to their campaigns at all. That deterrent effect burdens candidates' ability to finance and promote their own campaigns — core political speech. Any restriction on political speech, even an indirect one, must be justified by a real anti-corruption purpose backed by actual evidence.
The government could not clear that bar. The Court found no evidence of even a single real-world case of the specific kind of corruption that justifies restricting speech — a direct exchange of donations for official acts. The government's academic study, poll, and congressional floor statements all addressed general political influence, not the targeted quid pro quo corruption the law is allowed to prevent. The law, the Court concluded, more closely resembled an effort to protect incumbent officeholders from wealthy challengers than a genuine anti-corruption measure.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Candidates for federal office can now loan their campaigns more than $250,000 without the legal risk that they can never be fully repaid from post-election fundraising. Campaigns repaying candidate loans will face fewer restrictions, though the existing $2,900-per-election individual contribution cap and public disclosure requirements still apply to every donation used for that purpose.
What changes now
The District Court's ruling striking down Section 304 stands, meaning the $250,000 cap on using post-election contributions to repay candidate loans is unenforceable. Cruz's campaign may now repay the remaining $10,000. Going forward, federal campaigns face no statutory ceiling on using post-election donations to retire candidate loans — though all such contributions remain subject to the existing $2,900-per-election individual cap and public disclosure rules.
What this does not decide
The Court did not decide which level of constitutional scrutiny — strict scrutiny or the somewhat looser "closely drawn" standard — applies to the loan-repayment restriction, finding Section 304 failed under either. The ruling does not disturb the $2,900 individual contribution cap or other existing campaign finance regulations.
Concurrences and dissents
Dissent — Justice Kagan
“In striking down the law today, the Court greenlights all the sordid bargains Congress thought right to stop.”Justice Kagan's opening critique of the majority's decision to invalidate the loan-repayment cap.
Justice Kagan argued the majority mischaracterized Section 304 as an expenditure restriction when it actually regulates only third-party contributions — which under established precedent impose only a 'marginal' First Amendment burden. She contended the law targets a uniquely dangerous form of corruption: post-election donations that flow directly into an elected officeholder's pocket from donors who now know he can repay them with government favors. She criticized the majority for dismissing significant evidence of corruption risk and for demanding proof of individual corrupt transactions that is nearly impossible to obtain — the very reason prophylactic campaign finance laws exist.
How the Court got there
The legal reasoning, step by step
- Section 304 burdens political speech by raising the financial risk that candidate loans over $250,000 won't be fully repaid, which deters candidates from making large loans in the first place. Real-world data confirmed the deterrent effect: after the law took effect, candidate loans clustered sharply at exactly $250,000, with the percentage of Senate candidates borrowing precisely that amount increasing tenfold.
- The only permissible reason the First Amendment allows Congress to restrict political speech is preventing quid pro quo corruption — direct exchanges of donations for specific official acts — or its appearance. General political influence and access do not qualify. The Court has repeatedly rejected other justifications, such as reducing overall money in politics or equalizing resources between wealthy and non-wealthy candidates.
- Because Section 304 restricts speech, the government bore the burden of showing the law actually serves that narrow anti-corruption interest, backed by real evidence. The existing $2,900 individual contribution cap already addresses corruption from campaign donations; adding another layer of regulation on top of that is a 'prophylaxis upon prophylaxis' that signals the additional restriction may be unnecessary.
- The government could not point to a single documented case of quid pro quo corruption involving candidate loan repayments — notable because most states impose no similar limit without apparent corruption problems. The academic study, opinion poll, and congressional floor statements the government offered all concerned general donor influence over elected officials, not the specific direct exchanges the First Amendment permits Congress to target.
- The government's 'gift' analogy also failed. Post-election contributions that repay a candidate's loan restore the candidate to their pre-loan financial position, not to enrichment. Winning candidates are commonly repaid in full, meaning post-election loan-repayment contributions are less like gifts and more like the satisfaction of a genuine debt the candidate legitimately expected to collect.
- Deference to Congress's anti-corruption judgment was unwarranted, because the legislative record suggested Section 304 was designed at least in part to shield incumbent officeholders from wealthy challengers — an impermissible goal. The Court reaffirmed that it, not Congress, has the final say on whether a particular campaign finance restriction passes constitutional muster.
Doctrinal impact
Cases affected by this decision
Reaffirms McCutcheon v. Federal Election Comm'n (572 U.S. 185)
Only quid pro quo corruption — not general influence — can justify restricting political speech under the First Amendment.
Reaffirms Davis v. Federal Election Comm'n (554 U.S. 724)
A companion 'Millionaire's Amendment' provision was already struck down for impermissibly seeking to level candidate wealth disparities.