Cruz fined $35k for keeping voters in the dark about source of loans

WASHINGTON – Today, Campaign Legal Center (CLC) announced that the Federal Election Commission (FEC) has fined U.S. Senator Ted Cruz $35,000 for inaccurately reporting the source of campaign loans totaling $1,064,000, a violation of federal law, stemming from a complaint filed by CLC and Democracy 21 in 2016. After concluding their investigation, the FEC found Cruz obtained loans from Citibank and Goldman Sachs for use in his 2012 Senate campaign but improperly reported these loans as coming from his “personal funds.”

“Candidates should take seriously their legal requirement to disclose where their campaign money comes from. Today’s announcement is an acknowledgement that Cruz’s campaign deprived voters of that critical information,” said Tara Malloy, senior director, appellate litigation and strategy at CLC. “In the homestretch of a high-profile election, voters were misled about Cruz’s personal and campaign finances. This is particularly harmful given that financial issues were at issue in the campaign and could have factored into voters’ decision-making at the ballot box.”

The FEC conducted an audit of Cruz’s campaign activity and found that of the $1.43 million in loans that were reported as having come from Cruz’s personal funds, he actually borrowed $800,000 from three loans secured by a Goldman Sachs brokerage account he held jointly with his wife. In a conciliation agreement with the FEC, the Cruz campaign admits that it failed to timely provide the required information about the loans and concedes it has still not amended its reports.

Cruz faced scrutiny for not disclosing the Goldman Sachs loan he used for his 2012 Senate campaign after a 2013 interview with The New York Times in which Senator Cruz reportedly stated that he and his wife, Heidi Cruz, a managing director at Goldman Sachs, agreed to “liquidate” their “entire net worth” to free up the funds necessary for the campaign. Only now, years after the campaign, the public has a clear picture of the holes in that story – which was once a major narrative of his campaign.

Biggest FEC fine since Citizens United and third highest fine in history of Federal Election Commission

WASHINGTON – A record fine was handed down by the Federal Election Commission (FEC) following an August 2016 complaint by Campaign Legal Center (CLC), concluding an investigation that found a Chinese-owned corporation and pro-Jeb Bush super PAC both broke the federal law that guards American elections against foreign interference.

American Pacific International Capital, Inc. (APIC) was fined $550,000 for violating the foreign national contribution ban, and the pro-Jeb Bush super PAC “Right to Rise” was fined $390,000 for soliciting a foreign national contribution. CLC’s complaint cites the bombshell report by The Intercept in August 2016 that laid out smoking-gun evidence of the violation: the president of the Chinese-owned, California-based corporation admitted that he directed the corporation’s contributions, which totaled $1.3 million.

“Today’s action is a rare and remarkable step by the FEC, and a reminder that safeguarding our elections against foreign interference is in America’s vital national security interests,” said Trevor Potter, president of CLC, and a former Republican Chairman of the FEC. “This illegal $1.3 million contribution is unmistakable proof that Citizens United opened the floodgates to foreign money in the U.S., and it is surely the tip of the iceberg. The fact that the FEC, which so often deadlocks and therefore fails to act in violations, could agree on this one highlights the very real danger this sort of activity poses to our democracy.”

“Foreign actors have a demonstrated interest in influencing elections, and corporations offer an easy way to for them to do so, usually without detection,” said Brendan Fischer, director, federal reform at CLC. “In this case, it took smoking-gun evidence to establish this violation: if the president of the company had not admitted that he directed the contribution, the FEC never would have investigated it. Moreover, we can’t be sure how many other foreign nationals have funneled money into our elections through undisclosed donations to dark money groups. Law enforcement agencies need disclosure to enforce the laws protecting the integrity of our democracy. The law can’t be enforced against foreign money if the money isn’t disclosed at all.”

News of the FEC’s historic settlement comes after the U.S. House of Representatives passed HR 1 Friday, the “For the People Act,” which includes several provisions to strengthen the foreign money ban.

It deserves a vote on the bill in the Senate

WASHINGTON – Today, the U.S. House of Representatives passed the For the People Act (HR 1), a critical step to address the most pressing challenges to our democracy. The comprehensive legislation helps to ensure every eligible voter can cast a vote free from barriers, and promotes every citizen’s right to participate in the political process.

“This landmark bill would make our government more accessible, transparent, and responsive to citizens. It addresses obvious and harmful malfunctions and abuses in our election system. HR 1 is a sorely needed legislative solution,” said Trevor Potter, president of CLC, and a former Republican Chairman of the Federal Election Commission (FEC). “The Senate should take on the issue and embrace these reforms. It’s important that they call a vote so all members are on the record about where they stand on democracy reform. Voters want and expect a democracy that’s open to the American people, and Senators should not hide behind legislative procedures to avoid a vote on this bill.”

The For the People Act garnered support from a diverse coalition of hundreds of organizations. 82 percent of voters in battleground states – including 84 percent of Independents – support the legislation. The same poll showed that in those states, 75 percent of voters said cracking down on corruption was their top legislative priority.

Adav Noti, CLC’s senior director of trial litigation, testified before Congress in support of HR 1 on January 29. He talked about how HR 1 would improve campaign finance laws by ensuring that “ordinary citizens can participate in the political process without having their voices drowned out by wealthy corporations and individuals that hold special interests.”

Read CLC’s full statement in support of HR 1.

U.S. Supreme Court will hear about the harm gerrymandering has caused when it hears arguments in the cases out of North Carolina and Maryland on March 26

In a new film release, Campaign Legal Center (CLC) goes to North Carolina, ground zero in today’s fight over gerrymandering, to tell the stories of people impacted by the extreme partisan bias of the state’s electoral maps.

Paul Smith, vice president of CLC, is featured in the video. Smith is a leading election law litigator that has argued before the U.S. Supreme Court 21 times, including the October 2017 Wisconsin gerrymandering case in which CLC represented the voters challenging the maps. In the film, Smith emphasizes the importance of fixing gerrymandering so that all voices are heard. Smith focuses on two solutions to gerrymandering. First, the U.S. Supreme Court can set legal limits on gerrymandering, which can be applied by courts across the country to police the undemocratic practice. The second is to take the power of drawing electoral lines out of the hands of politicians altogether through nonpartisan commissions, who would draw the lines free from any political agenda. This has already been done by several states.

The film follows Maria Palmer, resident of Chapel Hill, North Carolina, who describes how demoralizing gerrymandering has been to voters she has spoken with in her grassroots organizing over the past decade, as well as Janet Hoy, co-president of the League of Women Voters, one of the plaintiff groups in the North Carolina partisan gerrymandering case that the U.S. Supreme Court will hear later this month. The film moves to small town mayor Willis Williams, of Jamesville, who frames the fight against gerrymandering as a social justice issue.

Distorted Democracy: The Fight Against Gerrymandering. Watch and Share:

This picture (below) is of the line between North Carolina’s 13th and 6th district, which cuts the campus of North Carolina A&T, a Greensboro, North Carolina-based Historically Black College and University (HBCU), right in half. This demonstrates how gerrymandering intentionally dilutes the voting power of like-minded communities in the minority party. In this case, the gerrymander successfully ‘cracked’ the school, so that residents would be living in two safe seats for the majority party, decreasing their voting power.

North Carolina’s 13th and 6th district line cuts the campus of North Carolina A&T in half.

WASHINGTON, D.C. – Plaintiffs in Rucho v. League of Women Voters of North Carolina filed their final brief with the U.S. Supreme Court today, just more than three weeks before the Court is slated to hear oral arguments in the partisan gerrymandering cases out of North Carolina and Maryland on March 26. Lower court victories for the plaintiffs in North Carolina mark the first time an entire state’s congressional plan has been struck down for being an unconstitutional partisan gerrymander. 

Campaign Legal Center (CLC), the Southern Coalition for Social Justice (SCSJ), and University of Chicago Professor Nicholas Stephanopoulos represent the League of Women Voters of North Carolina and 12 individual North Carolina plaintiffs in the case, Rucho v. League of Women Voters of North Carolina. The Supreme Court will simultaneously hear a companion case, Rucho v. Common Cause.

“Citizens in all 50 states deserve to be able to choose their representatives – and not the other way around. This is why we need a national solution, and why we look forward to bringing the fight for fair maps to the U.S. Supreme Court this month,” said Paul Smith, vice president of CLC. “It is time for the U.S. Supreme Court to act. They have a golden opportunity to enforce the Constitution in a manner that will rein in partisan gerrymandering – done by both parties – and create ground rules that safeguard the fundamental right of all Americans to have their vote count.

“This case cries out for intervention by the U.S. Supreme Court to rein in out-of-control partisan manipulation of the redistricting process,” said Allison Riggs, senior voting rights attorney for SCSJ. “You’d be hard-pressed to find a more blatant example of voters being denied their constitutional rights to equal protection under the law and to free speech than the North Carolina’s 2016 congressional redistricting plan. When legislators brag about their attempts to entrench themselves in political power, and enact maps designed to guarantee election winners before a single vote is cast, courts are the only hope for a remedy. These legislative actions are inconsistent with the basic principles of representative democracy that we hold so dear.”  

"The League of Women Voters of NC is proud to be a plaintiff in this case that so clearly lays out the need for redistricting reform,” said Janet Hoy, co-president of the League of Women Voters of North Carolina. "We look forward to the time when NC will have constitutional districts and North Carolinians' votes will count in every election."