Report: Ted Cruz Failed to Disclose Loans During Senate Campaign

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Ted Cruz allegedly took loans from Goldman Sachs and Citibank to help finance his 2012 run for Senate, according to a new report from The New York Times. Jonathan Ernst/Reuters

Ted Cruz allegedly took loans from Goldman Sachs and Citibank to help finance his 2012 run for Senate, according to a new report from The New York Times.

An investigation into Cruz’s person financial disclosures by Times reporter Mike McIntire found that Cruz and his wife, Heidi, took a loan and line of credit from the two major Wall Street institutions in early 2012, totaling between $750,000 and $1 million. Heidi Cruz works for Goldman Sachs as a managing director, though she is currently on leave.

There is nothing illegal about such loans but they are required to be reported to the Federal Election Commission, and Cruz's presidential campaign, through a spokesperson, told the Times that it would update its filings.

The loan may present a political problem for the Texas senator who has, at times, presented himself as an opponent of Wall Street, insisting that he opposed bailouts for the banking industry that followed the great recession.

The timing of the loan is particularly notable, the Times said: It came during the primary election season and allowed his campaign to spend $300,000 in television advertisements. Cruz went on to beat David Dewhurst and become a Tea Party senator from Texas, rising to political superstardom in the last four years.

Taking a loan also doesn’t jibe with past statements Cruz has made about risking it all to finance his longshot bid for the Senate in 2012. According to the Times, Cruz claimed he told his wife: “Sweetheart, I’d like us to liquidate our entire net worth, liquid net worth, and put it into the campaign.... What astonished me, then and now, was Heidi within 60 seconds said, ‘Absolutely,’ with no hesitation.”

Heidi Cruz has deviated from that narrative, describing the campaign financing process as using “common investment sense.” (Cruz, speaking with Politico in 2014, did not make note of loans or lines of credit, the Times said.)  

According to the Times, the loans were not included in Senate Committee filings to the Federal Election Commission, which monitors campaign fundraising.

“The law says if you get a loan for the purpose of funding a campaign, you have to show the original source of the loan, the terms of the loan and you even have to provide a copy of the loan document to the Federal Election Commission,” Kenneth A. Gross, a lawyer with expertise in campaign finance regulations, told the Times.

A spokeswoman for Cruz’s presidential campaign told the newspaper the unreported loan was an “inadvertent” situation. “These transactions have been reported in one way or another on his many public financial disclosures and the Senate campaign’s F.E.C. filings,” the spokeswoman added.

The bad news for Cruz is that the revelation comes hours before the next Republican debate, where opponents will be eager to take shots at him now that he is the frontrunner in the Iowa Caucuses. One source of comfort, though, is that even if the FEC were to take action against Cruz, and it’s not at all clear that it would, the commission’s sanctions process is usually quite slow and the penalties quite modest.