The Federal Election Commission has fined the 2012 Senate campaign of Sen. Ted Cruz (R-Tex.) $35,000 for inaccurately reporting the source of more than $1 million in loans that came from Goldman Sachs and Citibank, according to records made public Friday.
Cruz’s campaign committee had reported to the FEC that the candidate loaned himself just over $1 million in “personal funds.” But the funds actually came from Goldman Sachs — his wife’s employer — and Citibank, the FEC concluded, according to a legally binding conciliatory agreement.
Cruz obtained an $800,000 loan from Goldman Sachs and a $264,000 line of credit from Citibank, the agreement says.
Candidate loans financed by commercial lenders or a line of credit must be reported to the FEC, which regulates federal campaign activity. The candidate must report specific information about the loans, including the interest rate and any collateral or other sources of repayment that helped the candidate secure the loan.
The Cruz campaign disclosed the loan accurately in personal financial disclosures filed with the Senate. But campaign committees must file separately with the FEC, reporting where their money came from and where it was spent.
The Cruz campaign has maintained that the reporting inaccuracy was an inadvertent omission.
“As has repeatedly been reported, the loans were public at the time and fully disclosed on Senate ethics disclosures, but they weren’t reported correctly on the FEC forms,” Catherine Frazier, Cruz’s campaign spokeswoman, said Friday. “This agreed settlement resolves that filing mistake once and for all.”
In a 2013 interview with the New York Times, Cruz said he and his wife agreed to “liquidate” their “entire net worth” to help pay for his 2012 run for the Senate.
The Campaign Legal Center and Democracy 21, organizations that advocate for greater regulation of money in politics, filed a complaint against the Cruz campaign after the New York Times reported the discrepancy in a separate article in 2016.
Tara Malloy, senior director of appellate litigation and strategy at the Campaign Legal Center, said Friday that the FEC’s decision underscored the importance of disclosure laws and requirements for candidates to reveal sources of their campaign money to the public.
Cruz deprived voters of important information they may have wanted to know about the sources of his campaign funds, she said.
“The whole point of the disclosure laws is to require full and timely disclosure,” Malloy said. “The point of disclosure is not to allow the candidate to pick and choose what they disclose and when they disclose the sources of financing.”