Victorious Midterm Candidates Could Remake Money They Pour Into Their Own Campaigns, Thanks To New Supreme Court Ruling

A Monday ruling from the Supreme Court will allow wealthy candidates to remake the cash they loan to their own campaigns — but only if they win.

Six of the nine justices ruled in favor of a challenge from Sen. Ted Cruz (R-TX) to a federal law that “limits how political campaigns can repay candidates for money they lend their own campaigns,” The New York Times reported. “The ruling was the latest in a series of decisions dismantling various aspects of campaign finance regulations on First Amendment grounds.”

The law initially placed a $250,000 limit on the repayment of personal loans that politicians make to their campaigns using money from donations that come through after the elections. Cruz had intentionally lent $260,000 to his reelection campaign in 2018 to test the constitutional bounds of the law. In his majority opinion, Chief Justice John Roberts argued that the law in question “inhibits candidates from loaning money to their campaigns in the first place, burdening core speech.”

As Axios summarized, “Wealthy candidates who lend millions to their campaigns can secure public office, then go to their top donors for sums that could reach the millions.” The Supreme Court’s decision, which is retroactive, has implications for wealthy individuals who largely self-funded their 2022 midterm campaigns.

In the Republican primary for Pennsylvania’s open U.S. Senate seat, television host Dr. Mehmet Oz and former Bush administration official David McCormick have loaned roughly $15 million and $11 million to their campaigns, respectively. Other primary contenders across the United States — including Mike Durant, a Republican Senate candidate in Alabama; Jim Lamon, a Republican Senate candidate in Arizona; and Alex Lasry, a Democratic Senate candidate in Wisconsin — have also made multimillion-dollar loans to their campaigns.

Roberts wrote that the Supreme Court’s ruling would aid political outsiders, according to The New York Times.

“As a practical matter, personal loans will sometimes be the only way for an unknown challenger with limited connections to front-load campaign spending,” Roberts argued. “And early spending — and thus early expression — is critical to a newcomer’s success. A large personal loan also may be a useful tool to signal that the political outsider is confident enough in his campaign to have skin in the game, attracting the attention of donors and voters alike.”

Roberts — who noted that the usual $2,900 individual contribution cap will continue — also argued that there is no tangible evidence that repayment of loans after elections would lead to corruption. “If the candidate did not have the money to buy a car before he made a loan to his campaign,” he continued, “repayment of the loan would not change that in any way.”

Justice Elena Kagan disagreed with Roberts’ logic in her dissenting opinion.

“However much money the candidate had before he makes a loan to his campaign,” she wrote, “he has less after it: The amount of the loan is the size of the hole in his bank account. So whatever he could buy with, say, $250,000 — surely a car, but that’s beside the point — he cannot buy any longer. Until, that is, donors pay him back.”

The Republican primary race for Pennsylvania’s open Senate seat appears to be a contest between Oz and conservative commentator Kathy Barnette, with McCormick trailing in third place. A survey from Susquehanna Polling & Research released on Monday shows Oz with 28% of likely Republican voters, Barnette following closely behind at 27%, and McCormick with 11%. However, another poll places McCormick in a somewhat better position, with 21% of Republican voters as opposed to Oz’s 28% and Barnette’s 24%.

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