- Sen. Ted Cruz single-handedly altered campaign finance rules last year via a Supreme Court case.
- Federal lawmakers can now pay themselves back for large personal campaign loans after an election.
Republican Sens. JD Vance of Ohio and Markwayne Mullin of Indiana have spent the last year-and-change using campaign cash to pay themselves back for hefty loans they sunk into their 2022 Senate bids.
At the same time, they've been taking tens of thousands of dollars in corporate PAC money — some of which may be ending up directly in the senators' bank accounts.
Between the 2022 election and the end of 2023, Vance has used $78,000 in corporate PAC contributions to repay campaign debts, while Mullin has done the same with $45,000 in corporate cash.
Yet it's difficult, if not impossible, to draw a straight line from a single corporate PAC contribution to the checks each senator receives from their campaigns, given the interchangeability of campaign funds. Both men have also been repaying substantial debts to other campaign vendors, and have been accepting donations from other PACs and individuals for the purpose of debt retirement, the sum of which outweighs the corporate PAC money.
The murky reality of both Vance's and Mullin's finances can be attributed in part to the work of Sen. Ted Cruz.
In 2018, the Texas Republican moved to challenge the 2002 Bipartisan Campaign Finance Reform Act, which prevented federal candidates from raising more than $250,000 after their election to repay any personal loans they had made to their campaign. Anything that remained beyond that limit was deemed a contribution and ineligible to be recouped.
In 2022, the Supreme Court ruled in favor of the Texas senator in Ted Cruz vs. FEC — a move decried at the time by left-leaning ethics experts and liberal Supreme Court justices as opening the door to corruption.
"Repaying a candidate's loan after he has won election cannot serve the usual purposes of a contribution: the money comes too late to aid in any of his campaign activities," Supreme Court Associate Justice Elena Kagan wrote in her dissenting opinion in the case. "All the money does is enrich the candidate personally at a time when he can return the favor—by a vote, a contract, an appointment."
"Thanks to the Cruz decision, lawmakers can now easily lend their campaigns large amounts of money and use corporate PAC contributions to pay themselves back once they're in office," said Jordan Libowitz, communications director for Citizen for Responsibility & Ethics in Washington (CREW). "While disappointing to see it happen yet again, this is the new reality we live in."
Vance defended the arrangement in a brief interview at the Capitol this month, saying he doesn't "think there's anything particularly unusual about the way that we're doing it."
"Look, we put a lot of my personal money into the campaign, and the goal is always to pay it back and put us in a good place for 2028," said Vance. "And that's what we're gonna do."
A spokesperson for Mullin did not respond to Business Insider's request for comment on Thursday.
'Totally normal' or a bad incentive structure?
Since that 2022 decision, Republican Sen. Ron Johnson of Wisconsin has paid himself back $400,000 for years-old loans he made to his 2010 and 2016 campaigns, which he did days before telling Business Insider that he had no intention of doing that.
Cruz, for his part, has no problem with these sorts of loan repayments.
"If he wants to pay himself back, I think that's fantastic," Cruz told Business Insider in May 2023. "It is perfectly reasonable that Ron Johnson, after 10 years of making an interest-free loan to the American people, can pay back his own money."
Vance and Mullin represent two more notable cases of what some left-leaning ethics watchdogs warned about.
Altogether, Vance loaned $1.4 million to his Senate campaign, paying off $700,000 of that before he was elected. He had paid off nearly the entirety of that loan by the end of 2023, along with more than $306,000 in debts to other campaign vendors.
Mullin loaned his campaign $1 million and he has paid himself back $153,000, along with repaying nearly $27,000 in debt to GL Pro, an Oklahoma-based political strategy firm.
The Ohio senator's campaign has earmarked contributions from over 30 corporate PACs — including Comcast, Intel, General Motors, and Walmart — for the explicit purpose of debt retirement. Mullin did the same with 19 corporate PACs, including ConocoPhillips, ExxonMobile, and GlaxoSmithKline.
The optics of accepting the corporate cash may be a sore spot in particular for Vance, who's made criticism of "woke" corporations central to his political brand. He also promised not to take corporate PAC money during the GOP primary, only to reserve that pledge during the general election against Democratic Rep. Tim Ryan, who did accept corporate PAC money.
"We decided that hamstringing ourselves in the general election didn't make the same amount of sense," said Vance.
Proponents of the arrangement argue that because campaign cash is fungible, with money from various sources going into one big pot, there's little to no risk of bribery. They also argue that debt repayments aren't all that different from other campaign expenses that politicians may benefit from, such as catering or airfare, and that one could make the same "bribery" argument about any politician who accepts large sums of corporate cash.
"It is a totally normal practice for senators to raise money to repay campaign debt and Business Insider knows that," said a representative for Vance's campaign. "This partisan smear job is even more egregious when you consider that only 6% of Sen. Vance's lifetime political fundraising has come from PACs, a third of the 18% average for successful 2022 Senate campaigns."
But Saurav Ghosh, director of federal campaign finance reform at the Campaign Legal Center, argues that what's important is the incentive structure presented to campaign donors, corporate or otherwise.
"The benefit for the PACs, and even individuals who do this, is that they know at the point when they're putting their money in that it's enriching the candidate," said Ghosh. "The fact that the campaign is sort of the intermediary through which this money is flowing does very little to change that incentive structure."