Cruz campaign funds draw scrutiny
Elections commission records dozens of cases of donations over legal limit
AUSTIN — U.S. Sen. Ted Cruz, who is struggling to keep pace with Democrat Beto O’Rourke when it comes to fundraising, repeatedly has run afoul of Federal Elections Commission regulations in collecting donations.
Federal campaign regulators have three times in the last year sent notices to the Cruz campaign — more than any senator running for re-election this year — for taking tens of thousands of dollars more than legally allowed from dozens of donors. And in another case, a Cruz donor had to file a Federal Election Commission complaint to get the campaign to stop automatically deducting monthly donations from her bank account.
“I’m truly sorry to have to file a complaint against Sen. Cruz’s campaign, because I’m sure he has no clue of what’s going (on) with my concern,” Ohio resident Renata S. Walters put in a handwritten letter to the FEC in late 2016 to stop the deductions from her bank account.
In an official response to the FEC, Cruz’s campaign treasurer Bradley Knippa blamed an unidentified “third party vendor” and said it was corrected. The FEC dismissed the case 5-0 after the deductions stopped.
As for the dozens of over-the-limit donations,
Chris Gober, a legal adviser to the Cruz for Senate Campaign, promised all issues in the FEC letters will be remedied. He said campaigns by law have 60 days to identify and correct excessive contributions.
“Based on what the law says and what it permits us to do, I take issue with your insinuation the campaign is somehow not following the letter of the law, or that the FEC is having to ‘flag’ these for the campaign,” Gober said.
Cruz acknowledges that O’Rourke is raising more money than he is.
“He is raising more money than any Democrat in the entire country,” Cruz warned Republicans at the Republican Party of Texas Convention earlier this month. “Last quarter I raised $3.2 million — most of any Republican incumbent in the country. Last quarter he raised $6.7 million — more than two times as much as we did.”
Cruz has raised just over $9 million in his main campaign account, according to the FEC. O’Rourke has topped $13 million.
‘Degree of sloppiness’
A review of 31 other U.S. senatorial campaigns show only three others have received one letter flagging similar issues in the past year. None had as many donors out of compliance as Cruz’s campaign.
U.S. Sens. Bob Casey, D-Pa., Dean Heller, R-Nev., and Tammy Baldwin, D-Wis., have received similar letters from the FEC. O’Rourke, the El Paso congressman challenging Cruz, has not received any formal notices for “excessive, prohibited and impermissible contributions” like Cruz’s campaign has.
In September, the Cruz campaign was notified by the FEC that it took more money than allowed from 31 donors. In response, the Cruz campaign refunded some donations, re-attributed others to the donor’s spouse, and relisted donations to either the primary election or the general election in 2018 to get into compliance.
Then it happened again in April. The FEC cited another 20 Cruz donors who had given as much as three times the $2,700 limit per election. The campaign again refunded some donations or reclassified the purpose or source of the contribution.
Last week, the FEC notified the Cruz campaign again that it has taken more money than is legally allowed from 22 donors, including from some of the same people the FEC had identified in previous letters.
Experts say the repeated problems are unlikely to lead to additional enforcement actions against the Cruz campaign. Typically, the FEC flags the problem donations and the campaign corrects them, said Brendan Fischer, director of federal reform for the nonpartisan Campaign Legal Center in Washington, D.C.
“It does reflect a degree of sloppiness, but it is not overly problematic for the campaign,” Fischer said.
Steady stream of funding
The Cruz campaign, like others, encourages supporters to make monthly donations, but the campaign does not cut those payments off once the donors hit the $2,700 legal limit.
“Actually, you can’t just sign people up to make recurring contributions and then keep accepting them long after they have reached the dollar limits for the election cycle,” said Brett Kappel, a D.C. attorney who handles FEC issues.
Campaigns have become aggressive in signing up monthly donors to create a steadier stream of funding. On President Donald Trump’s campaign website, donors are given the option of checking a box to make their one-time donation or a monthly contribution.
Cruz has a similar feature on his website, but with a key difference. Instead of giving people the chance to opt-in to a monthly donation by checking a box, supporters are automatically enrolled in monthly donations unless they uncheck a box.
Cruz is running for re-election against O’Rourke and has political action committees and Super PACs that are also poised to help his campaign.
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