Math Is Hard

Feds Blast Ted Cruz’s Sloppy Donations

The FEC hit Ted Cruz campaign with a triple dose of violations today—might it be time for new lawyers?

Ted Cruz got a triple whammy from the FEC on June 3.

The Federal Election Commission sent the Texas senator-turned-presidential candidate three separate letters noting his team’s hiccups with campaign finance laws. One noted that the senator’s team has accepted contributions that appear to go above the legal limit.

None of the problems the commission identified are uniquely scandalous or game-changing, but it’s atypical for a presidential candidate’s team to get three notices from them in one day.

“Their political machine has got some sand in the gears,” said one campaign lawyer, who spoke anonymously. “They’ve got a ways to go to establish a good compliance system.”

The FEC’s letter to Cruz’s campaign suggests that his team doesn’t have effective compliance mechanisms in place, the lawyer added.

And Lawrence Noble, senior counsel at the Campaign Legal Center, pointed out that this isn’t the first time Cruz has gotten rebuked for taking contributions that are too big. Cruz’s senate campaign got letters about the same issue in 2011, in 2012, and in 2013.

“The fact that it keeps happening seems to represent some sort of systemic problem,” Noble said.

“They have a problem that they’re not vetting these contributions well enough,” he continued. “It’s not a good sign, but it happens to other campaigns also.”

The Cruz camp doesn’t sound stressed about the situation.

“These letters are completely routine,” spokeswoman Catherine Frazier said in an email, referring to the three communications they got from the FEC on June 3.

One of those notices, sent to the treasurer of his Cruz for President committee, contained a six-page list of problematic contributions. These contributions came from donors who gave more than the legal limit of $2,700 per candidate per election.

An individual donor can give a candidate up to $5,400 per election cycle if he or she denotes half of that money for the primary campaign and half for the general (candidates who don’t win their primaries then must return the donations they got for the general election).

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Thus, couples can give up to $10,800 if they note that the donation comes from two adults—for instance, $5,400 from a wife for the primary and general, and another $5,400 from her husband for the primary and general as well.

The compliance issue that the FEC noted for Cruz was that many of his donors cut $10,800 and $5,400 checks without noting how their donations were to be allocated.

That in and of itself isn’t unusual, as most campaign donors aren’t campaign finance law experts.

So campaigns typically set up mechanisms to keep donors from improperly contributing.

The next issue that the commission raised to Cruz’s team involved his Ted Cruz Victory Committee. In another letter, the FEC said that the aggregate year-to-date totals it disclosed “appear to be incorrect.” It’s a common error, per the attorney who spoke with The Daily Beast, and easy to fix.

Cruz’s third issue is related to the quarterly report for his Senate campaign committee.

“While it is permissible for a person to make a contribution for the general election prior to the primary election, the recipient committee must employ an acceptable accounting method to distinguish between primary and general election contributions,” wrote FEC senior campaign finance and reviewing analyst Bradley Matheson.

The attorney who spoke with the Beast said this could be because the FEC thinks Cruz won’t run for re-election in the Senate.

“The FEC RAD analyst who sent the letter must be under the mistaken impression that Senator Cruz, by declaring himself a candidate for president, is no longer a candidate for re-election to the Senate,” the attorney said in an email. “I’m sure Cruz's counsel will set him straight!”

So, again, none of these concerns are hair-raising or unprecedented. But, together, they may indicate that his team has a ways to go when it comes to efficiently following federal campaign rules.