Ted Cruz’s latest troll? Turn your campaign into a super PAC

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Federal law says candidates can only give other candidates $2,000 per election. But Sen. Ted Cruz (R-TX) — in classic Cruz fashion — may have found a loophole.

Last month, Cruz donated $137,183 to the campaign trail of Cassy Garcia, his former aide-turned-congress candidate from Texas.

Along the way, the tendentious Texan — who regularly pushes the limits of campaign finance and is currently challenging the federal election regulator in the Supreme Court — has innovated, assuming unlimited spending powers and raising campaign finance red flags.

Cruz’s last-minute blitz paid off. His six-figure spending helped Garcia push through the Republican primary through the May 24 runoff. And Cruz’s support may have played a pivotal role, as none of Garcia’s campaign finance reports show a dime spent on promotion – no advertising, no digital marketing, no billboards, no mailings, no call lists, no voting efforts. . Just a $600 website.

For some reason, Cruz filled that gap. By the time the ballots were counted, he had spent more money supporting Garcia than she had even raised.

If that sounds strange, it is. Experts say the move seems unprecedented. And it may cause other candidates with big funds and strong personal preferences — candidates like Donald Trump — to reconsider how they shed their weight.

If it sounds illegal, technically it probably isn’t.

At least it’s probably not illegal as long as the senator and his former deputy state director never “coordinated” spending — a broad term, which also applies to candidates and super PACs.

Here’s how he did it.

Federal rules limit the amount of money campaigns can give each other directly to a surprising degree: $2,000 for the primary and an additional $2,000 for the general. That’s less than the limits on individual donors, who can give a combined total of $5,800.

But the rules don’t limit how much campaigns can spend on indirect types of support, known as “arm’s length spending.” This means that a campaign could theoretically spend millions of dollars on advertising or marketing efforts to support a friend’s campaign or to attack a friend’s opponent.

Essentially, Cruz cut the middleman. His campaign committee, “Ted Cruz for the Senate,” has invested tens of thousands of dollars in the kinds of promotional efforts that those $2,000 donations would typically help fund, similar to a full super PAC. an official campaign.

Spending kicked off Feb. 23, a week before primary day, when Ted Cruz for the Senate shelled out the first $64,800: $40,000 on GOTV’s door-to-door; $24,500 for two media buys; and a final $300 for printing and design. The following day, the campaign lost $40,000 on web services, $9,306 on print materials, and $16,200 on GOTV phone calls and texts. The frenzy ended with another $5,000 media buy on February 25 and a $1,877 media and travel kicker on February 28.

The campaign, however, had a problem. The tactic was so unusual that the Federal Election Commission actually had no way of reporting it. Instead, campaign treasurer Cabell Hobbs filed “miscellaneous” forms, along with a particularly Cruzian comment – “in light of the FEC’s failure to provide a mechanism for authorized committees to report independent spending supporting candidates in other races”.

While Cruz waited until last week to step in, Garcia’s campaign didn’t last long. She didn’t file with the FEC until mid-December and raised about $128,000 before the primary, about $10,000 less than Cruz spent.

Of that $128,000, available reports from the Garcia campaign show only $11,738 in expenses, for accounting, research, credit card processing, a business name and $600 for web design. Cruz’s leadership, PAC, also nearly covered that bill with their $10,000 New Year’s gift.

And while it’s likely that Garcia spent more on his own in the 20-day span between his last available report and the main day, there are some gaps. For example, the only Garcia campaign ads in Facebook’s political ad library are those purchased by the Cruz campaign. Google ad library has no results. And even if Garcia emptied her account, she couldn’t have spent as much as Cruz.

Caleb Burns, a campaign finance law expert and partner at Wiley Rein, told The Daily Beast that, while his approach is novel, Cruz appears to follow the law.

“A campaign should be free to incur independent expenses on behalf of other candidates based on both constitutional concerns and existing FEC regulations,” Burns said, noting that he had explored the issue even before. the decision of the Supreme Court. United Citizens decision blew the doors of fundraising and political spending.

Burns observed that this type of campaign spending is “extremely rare” and offered an explanation: Candidates want to keep their campaign money because it’s the only money they can spend on their own campaign efforts.

“Candidates typically reserve campaign funds for themselves and rely on other vehicles to make independent spending,” Burns said. “For example, candidates and office holders could use their leadership PACs – which cannot be used to support the candidates or office holders’ own elections – to make independent expenditures on behalf of other candidates. And since Citizens United v FECallied super PACs and other organizations also make independent expenditures.

Certainly, the campaigns have a number of channels to provide money to their allies. But as political fundraising continues to break records, behemoths who find themselves with more money than they can spend – think Senator Lindsey Graham (R-SC) and the $240 million windfall challenger Jamie Harrison’s dollars in 2020 – could see new appeal in the Cruz approach.

Brett Kappel, campaign finance law specialist at Harmon Curran, pointed out that this could most likely be true when a candidate has a personal interest in another race.

“It remains to be seen if this becomes a trend. It can be tempting for members of Congress with a national fundraising base to weigh in on races in which they have a personal interest for or against a specific candidate,” Kappel said.

Because the FEC has not established proper reporting requirements, he added, an outside candidate might be able to tip the balance “before voters ever find out who is funding” independent spending.

The key word, however, is “independent”. Some of Cruz’s expenses, Kappel said, raise questions about his independence, exactly.

Candidates cannot coordinate these expenses – and that includes discussion, assent and suggestions, and it extends beyond candidates to intermediaries.

Cruz and Garcia present an overlap. Cruz’s Facebook spend promotes a joint rally hosted by his campaign, with an EventBrite link, and a post on Garcia’s official Facebook page links to the same EventBrite rally and invitation, which lists Ted Cruz for the Senate as the organizer.

Additionally, Cruz and Garcia, who have a close history, also both paid a common supplier for the “design” work – a small Texas company called Birdwell Communications, which only two other federal committees paid for.

“Using a common vendor would be seen as a red flag indicating the possibility of coordination between the two campaigns,” Kappel said.

The Cruz and Garcia campaigns did not immediately respond to a request for comment.

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