Republican presidential candidate Ted Cruz says his failure to disclose to the FCC a loan from Goldman Sachs, his wife's employer, to help finance his 2012 U.S. Senate campaign was an "inadvertent filing error." (Reuters)

This New York Times story could not have come at a worse time for Sen. Ted Cruz (R-Tex.), who had already been knocked off-balance by Donald Trump, is falling in his must-win state of Iowa and is being attacked as a slick politician who won’t level with voters:

As Ted Cruz tells it, the story of how he financed his upstart campaign for the United States Senate four years ago is an endearing example of loyalty and shared sacrifice between a married couple.

“Sweetheart, I’d like us to liquidate our entire net worth, liquid net worth, and put it into the campaign,” he says he told his wife, Heidi, who readily agreed.

But the couple’s decision to pump more than $1 million into Mr. Cruz’s successful Tea Party-darling Senate bid in Texas was made easier by a large loan from Goldman Sachs, where Mrs. Cruz works. That loan was not disclosed in campaign finance reports.

Those reports show that in the critical weeks before the May 2012 Republican primary, Mr. Cruz — currently a leading contender for his party’s presidential nomination — put “personal funds” totaling $960,000 into his Senate campaign. Two months later, shortly before a scheduled runoff election, he added more, bringing the total to $1.2 million — “which is all we had saved,” as Mr. Cruz described it in an interview with The New York Times several years ago.

This is a big problem for any candidate, but a bigger one for Cruz than most. Here’s why:

1. He is still indebted to Goldman. (“As for the Goldman Sachs loan, it remains outstanding, though the balance has been reduced to between $50,000 and $100,000.”) Goldman, among other things, employs hundreds of workers on H-1B visas. Cruz used to advocate a huge increase in the number of H-1B visas, without, of course, saying he was on the hook to Goldman. Now, of course, Cruz wants to end H-1B visas. Maybe he should have taken out a loan from a bank that employed more Americans.

2. He didn’t simply “forget” to file the disclosure; he made up a self-reverential story to go with it. “Liquidate everything” really meant “get a honking-big loan from my wife’s company.” This will underscore his slipperiness on other issues, such as his stance on immigrant legalization. Can we take anything he says at face value?

3. He is going on stage tonight in a debate against several highly skilled candidates who don’t like him to begin with. They are likely practicing their barbs as you read this.

4. Trump is going to have a field day with this one, which is certainly a more solid reason than his birther hooey on which to disqualify Cruz. Cruz has been accusing Trump of embodying “New York values” — whatever those are. But if hiding a big loan from a Wall Street firm tied to the housing crisis isn’t the essence of “New York values,” I am not sure what is.

5. Cruz’s campaign is built on the populist, anti-establishment narrative. That is how he won his Senate race in the first place and why it was a good reason for him to conceal the loan at a critical time in that race. (“Mr. Cruz, a conservative former Texas solicitor general, was campaigning as a populist firebrand who criticized Wall Street bailouts and the influence of big banks in Washington. It is a theme he has carried into his bid for the Republican nomination for president.”) It would have highlighted his immense hypocrisy, in other words. He is still running on the theme of  battling influence-peddling and special favors for the rich (“[T]he problem that underlies all of this is the cronyism and corruption of Washington”). As a GOP Senate staffer put it, “It’s amazing that this guy can rail against crony capitalism when he is one of its biggest beneficiaries.”

6. It is hard to say this is an oversight. Cruz, he never tires of telling us, is a crack lawyer. The law is crystal-clear (Chapter 6). Voters can surely draw the inference that he wanted to hide the loan. As the Times report noted, “Other campaigns have been investigated and fined for failing to make such disclosures, which are intended to inform voters and prevent candidates from receiving special treatment from lenders.” Saying this all got reported later when his seat was won is hardly an excuse. It’s evidence that Cruz was hiding the ball when it mattered to his election.

7. This is precisely the sort of slick, dishonest conduct he accuses professional politicians of undertaking. Recall his answer in the debate in November when asked about bailing out banks: “The truth is, the rich do great with big government. They get in bed with big government. The big banks get bigger and bigger and bigger under Dodd-Frank and community banks are going out of business. And, by the way, the consequence of that is small businesses can’t get business loans, and it is that fundamental corruption that is why six of the 10 wealthiest counties in America are in and around Washington, D.C.” But Cruz got his loan, thanks to the sort of special access he decries. This exchange was telling:

NEIL CAVUTO: . . . I just want to be clear, if you don’t mind, that millions of depositors would be on the line with that decision. And I just want to be clear. If it were to happen again, for whatever the reason, you would let it go, you would let a Bank of America go? 

CRUZ: So let me be clear. I would not bail them out, but instead of adjusting monetary policy according to whims and getting it wrong over and over again and causing booms and busts, what the Fed should be doing is, number one, keeping our money tied to a stable level of gold, and, number two, serving as a lender of last resort.

That’s the essence of cronyism — Cruz gets his money when he is in a pinch, but ordinary employees, customers and shareholders will get no help from him.

8. Oh, it was not just Goldman. The Times report says that “in the first half of 2012, Ted and Heidi Cruz obtained the low-interest loan from Goldman Sachs, as well as another one from Citibank. The loans totaled as much as $750,000 and eventually increased to a maximum of $1 million before being paid down later that year. There is no explanation of their purpose.” Citibank was another Wall Street firm tied up in the housing disaster.

9. This all feeds into Trump’s argument that he is not beholden to anyone, unlike greedy politicians.

10. Cruz is going to spend more news cycles defending himself when he wanted to be firing up his troops and attacking others.

The GOP is lucky to find this out now. Imagine what would happen if the party nominated someone with this to go up against the Clinton attack machine. It’s one more reason not to nominate someone with such a thin public record who has never been thoroughly vetted.