Texas Sen. Ted Cruz took a big gamble on his first Senate race in 2012, loaning roughly $1.2 million of his and his wife’s personal funds to a campaign others called unwinnable.
Six years later, Cruz still lists that loan as an asset on personal financial forms submitted to the Senate this month — despite acknowledging that the law won’t allow him to recoup the more than half million dollars he still hasn’t been repaid.
Candidates for federal office are allowed to loan money to their campaigns without the limits applied to other donors, which is what Cruz did to defeat then-Lt. Gov. David Dewhurst in the 2012 Republican primary.
They can repay themselves with money in their campaign accounts at any point for loans up to $250,000, but larger sums must have already been raised before Election Day and paid off within 20 days of the contest.
“The law is designed to prevent people from giving their campaign a bunch of money and then raising money from donors years later when they’re in office to pay themselves back personally,” said one Republican campaign finance attorney, who requested anonymity to speak candidly about the situation.
“I advise candidates if it’s over $250,000, they should assume they’re not getting paid back. Donors don’t want to give money to repay campaigns.”
Cruz’s campaign did not respond to a question about whether he’d expected to be repaid in full for the loan. He’s described the loan, which was made around the same time he and his wife took on two big bank loans, as “all we had saved at the time.”
A 2017 FEC audit of Cruz’s 2012 campaign faulted the senator for continuing to list the loan as though it should be repaid, years after the deadline to do so had passed.
“Federal campaign finance laws only allowed the campaign to repay about half [the roughly $1.2 million personal contribution],” Cruz spokeswoman Maria Jeffrey said in a statement this week. “As a result, the campaign still owes Sen. Cruz $545,000 — which current law prohibits being repaid.”
“That amount has been disclosed on Sen. Cruz’s previous financial disclosures, and on public FEC reports has been converted to an in-kind contribution,” she added.
Cruz’s personal Senate financial disclosure, filed late last week after an extension, showed his assets between $2.17 million and $4.8 million during the 2017 calendar year.
It lists the 2012 campaign loan among the senator’s largest assets — valued between $500,000 and $1 million — despite his acknowledgment that the loan has been forgiven.
Cruz’s office did not respond to request for comment on that listing.
“On [Cruz’s] personal financial disclosure report, he’s including an asset that is not an asset,” said Larry Noble, former general counsel for the Federal Election Commission.
Federal lawmakers must list their personal financial assets and liabilities annually, and assign them each a value from broad ranges.
Cruz’s Democratic challenger, Rep. Beto O’Rourke, reported assets valued between $3.5 million and $16.3 million in the 2017 calendar year. He told the Star-Telegram in June that he did not plan to use his own money for the race against Cruz.
Cruz’s office did not respond to a question about whether he would use his own money for the race against O’Rourke, who had a roughly $5 million cash advantage as of the most recent June 30 reporting period.
“I hear literally every day someone says to me, ‘Come on it’s a Texas re-elect, how can you possibly lose?” Cruz said of his race at a campaign event in Smithville, Texas, earlier this month. “[O’Rourke] is the number one Democratic fundraiser in the country, and he’s outraising us by a lot.”
Cruz’s liabilities on the most recent financial disclosure totaled between $1.13 million and $5.35 million. It included a mortgage valued between $1 million and $5 million in 2016 for his house in Houston, his office confirmed.
The report also lists a Goldman Sachs loan Cruz took out during the 2012 Senate campaign, which remains open for borrowing purposes, according to his office. It’s one of two bank loans that drew complaints from the FEC, which says he should have designated commercial lenders on his campaign finance reports at the time.
“As has been previously reported, Sen. Cruz maintains a ‘margin account’ with Goldman Sachs that allows him to borrow against the personal assets he maintains in that account,” Jeffrey said of that loan.
“Under the rules for these financial disclosures, Sen. Cruz is required to list liabilities the highest amount owed at any one point in time during the reporting period. ... At present, the balance is zero, but that fluctuates during the year.”
Among his assets, Cruz, who has two young daughters, reported two 529 college savings plans on his personal assets. Those plans can also be used to fund elementary through high school education expenses, thanks to a provision Cruz pushed for in the GOP’s tax bill last year.
Cruz’s office did not answer a question about whether Cruz has chosen to take advantage of that, but confirmed both children have a 529 education savings accounts in their name.