Restriction of disbursement of loan to FEC candidate ruled unconstitutional by district court – government, public sector



United States: Restriction of disbursement of loan to FEC candidate ruled unconstitutional by district court

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Under the Federal Election Campaign Act, any candidate receiving personal campaign loans can only use up to $ 250,000 in campaign contributions to repay those loans after the election. On June 3, 2021, the US District Court for the District of Columbia ruled that this limitation (codified at 52 USC § 30116 (j)) was unconstitutional. Plaintiffs, Senate Ted Cruz and Senator Ted Cruz, filed a lawsuit against the Federal Election Commission (“FIC”), claiming that the redemption limit unconstitutionally violates the rights of the Senator, Campaign, and anyone who might attempt to violate the First Amendment. make post-election contributions.

The court found that the loan repayment limit restricts First Amendment rights to political speech and association for both candidates and their contributors, limiting the repayment options available to candidates who choose to provide personal loans for their campaigns. In ruling that limiting repayment of a loan violated these constitutional rights, the District Court relied on longstanding principles that synonymize spending with perpetuating speech. In particular, the Court stated: “When a candidate spends funds on behalf of her campaign, she exercises her right to speak; and when a participant makes a donation to this campaign, they exercise the right to communicate with the candidate and express their support. Campaign contributions, in turn, increase the costs and political speech of the candidate. ” The court also noted that candidates often self-finance their campaign in order to achieve it in the short term, and that the disbursement limitation “places a particular burden on relatively unknown applicants who may need additional funding to run an effective campaign. against a better-off operator ”.

The Federal Election Commission argued that the limit on loan repayments should be maintained, citing fears that donors will start contributing to the post-election campaign, hoping that the loan repayment aid could be used for possible political preferences. However, the Court found that the Commission had failed to provide adequate evidence that the government had a compelling interest in maintaining the restriction, stating that the Commission had not demonstrated a single instance of de facto quid pro quo corruption arising from the payment of a candidate’s personal loans to his candidacy. or her campaign committee. In addition, the Court found the Commission’s use of the history of legislation, scientific articles and even a survey conducted on this issue at the direction of the Commission unconvincing, stating that the Commission’s arguments in favor of maintaining the limit on the repayment of the loan “the amount[ed] on the assumption that contributions to pay off a candidate’s personal loans carry the danger of quid pro quo corruption. “

In the end, the Court concluded that even if the Commission could invoke a compelling government interest, the redemption limit was not “strictly defined” to protect freedom of expression and association, humorously stating that “[t]The government’s rationale for the repayment limit isn’t just for a pair of pandemic sweatpants. ”

The court decision is subject to appeal, so candidates and organizations should not rely on prior information until the appeal process has been exhausted.

The content of this article is intended to provide general guidance on the subject. You should seek professional advice regarding your specific circumstances.

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