Ted Cruz’s latest troll? Turn his campaign into a Super PAC

Federal law states that candidates can only give other candidates $2,000 per election. But Senator Ted Cruz (R-TX)—in classic Cruz fashion—could have found the loophole.

Last month, Cruz poured a staggering $137,183 into the House campaign for Cassy Garcia, his former staffer turned Texas congressional candidate.

Along the way, the inclined Texan — who regularly pushes the boundaries of campaign finance and is now challenging the federal election regulator in the Supreme Court — has broken a new, hypothetical background. unlimited spending rights and raise campaign finance red flags.

Cruz’s last-minute bluster paid off. His six-figure spending helped Garcia get through the Republican primaries to give birth on May 24. And Cruz’s support may have played a role, because no Does any of Garcia’s campaign finance reports show a dime spent on promotion — no advertising, no digital marketing, no signage, no mailing, no call list, no voting effort. . Just a $600 site.

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

If this sounds strange, it is. Experts say the move seems unprecedented. And it could cause other candidates with huge fortunes and strong personal preferences – candidates like Donald Trump – to rethink how they throw the scales.

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

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

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 main campaign and another $2,000 for the general. That’s less than the limit for individual donors, who can give out a total of $5,800.

But the rules don’t put a limit on how much campaigns can spend on indirect support types, known as “independent spends.” 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 competition.

Essentially, Cruz cut out the middle man. His campaign committee, “Ted Cruz for the Senate,” has spent tens of thousands of dollars on the kinds of publicity efforts that $2,000 in donations would normally help fund, in the same way a super PAC would. complement an official campaign.

Spending began on February 23, a week before the main date, when Ted Cruz gave the Senate the first $64,800: $40,000 on GOTV knocking; $24,500 for two media purchases; and the final $300 for printing and design. The next day, the campaign dropped $40,000 for web services, $9,306 for printed materials, and $16,200 for phone calls and text messages on GOTV. The event ended with another $5,000 media purchase on February 25 and a $1,877 investment in media and travel on February 28.

However, the campaign ran into problems. This tactic is so unusual that the Federal Election Commission actually has no way of reporting it. Instead, campaign treasurer Cabell Hobbs submitted “miscellaneous” forms, complete with a bit of special Cruzian commentary – “because the FEC does not provide a mechanism for committees authorized to report incidents.” independent expenditures to support candidates in other races.”

While Cruz waited for the final week to jump in, Garcia’s campaign didn’t last long. She only applied to the FEC in mid-December and raised about $128,000 before the primary meeting — about $10,000 less than Cruz spent.

Of that $128,000, the available reports of the Garcia campaign show only $11,738 in expenses, for accounting, research, credit card processing, trade names, and $600 for web design. Cruz, PAC management also pretty much covered that bill with a $10,000 New Year’s Eve gift.

And while it’s likely Garcia made more expenditures on his behalf in the 20-day period between the last available report and the primary date, there are gaps. For example, the only Garcia campaign ads in Facebook’s political ad library are the ones that the Cruz campaign purchased. Google’s ad library had no hits at all. And even if Garcia spends all of her account, she can’t spend as much as Cruz.

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

“A campaign should be free to engage in independent expenditures on behalf of other candidates based on constitutional concerns and applicable FEC regulations,” Burns said, noting that he had researched the question even before the Supreme Court United Citizens The ruling blew open the door to fundraising and political spending.

Burns observes that this type of campaign spending is “extremely rare” and offers an explanation – candidates want to keep money for their campaign, because it’s the only money they can afford. spend on its electoral efforts.

“Candidates often reserve campaign funds for themselves and rely on other means to make independent expenditures,” says Burns. “For example, candidates and officials can use their leadership PACs — which cannot be used to support the candidate’s own elections or offices — to make independent expenditures. set up to support other candidates. And since Citizens United v. FECAllied super PACs and other organizations are also making independent expenditures.”

To be sure, campaigns have several channels to deliver cash to their allies. But as political fundraising continues to break records, jugglers find themselves with more money than they can spend — think Sen. challenge Jamie Harrison’s $240 million endowment in 2020—a new appeal may be seen in Cruz’s approach.

Brett Kappel, a campaign finance law expert at Harmon Curran, points out that this is most likely to prove true when a candidate has a personal stake in another race.

“It remains to be seen if this becomes mainstream. It may be tempting, Kappel said, for members of Congress with a national fundraising base to weigh in on races where they have a personal interest or against a particular candidate.

Since the FEC has not yet established proper reporting requirements, he added, an outside candidate could issue the scales “before voters know who is funding” independent expenditures.

The keyword, however, is “independent.” Some of Cruz’s spending raises questions about its degree of independence, Kappel said.

Candidates cannot coordinate these expenditures — and that includes discussion, agreement, and proposal, and it extends beyond candidates to middlemen.

Cruz and Garcia show overlap. Cruz’s Facebook spending fuels a general protest organized by his campaign, with an EventBrite link and a post on Garcia’s official Facebook page linking to the same protest and the same words. invites EventBrite — which lists Ted Cruz for the Senate as the organizer.

In addition, Cruz and Garcia, who are historically close, also paid a common supplier for “design” work — a small Texas company called Birdwell Communications, with only two inter-commissions Other states pay.

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

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