Pro-Ted Cruz group draws scrutiny for receiving money from his podcast’s company

A super PAC supporting Sen. Ted Cruz’s reelection campaign has received nearly $800,000 in receipts from the company that distributes the Texas Republican’s podcast, an arrangement that is attracting scrutiny from campaign finance experts and Democrats.

Federal law prohibits candidates from soliciting or directing money to super PACs, which can raise unlimited amounts of funds, including corporate money, as long as they do not coordinate with the candidate they are working to elect.

Some campaign finance watchdogs say it’s hard to believe that Cruz would not have been involved in any arrangement to route the funds from the company that distributes his podcast to the super PAC, known as Truth and Courage PAC.

“It just defies credulity that this is a normal business transaction,” said Brett Kappel, a campaign finance lawyer with no involvement in Cruz’s race. “Even if it were, the idea that a super PAC derives a substantial portion of its revenue … from a commercial business in which a sitting senator is a principal is completely unique and … raises all sorts of legal and ethical issues.”

Cruz’s campaign has emphasized he does not get paid personally to do the podcast, although critics say the arrangement raises other issues and requires investigation by the Federal Election Commission.

End Citizens United — a group whose political arm has endorsed Cruz’s Democratic opponent, Rep. Colin Allred (Tex.) — filed an FEC complaint in April alleging Cruz has run afoul of the ban on soliciting or directing money for a super PAC. The group was joined in the complaint by the Campaign Legal Center, a nonpartisan government watchdog group.

Allred, a congressman from Dallas, has made Cruz’s podcasting a major part of his campaign, accusing the senator of focusing more on being a media personality than serving Texans. Cruz has argued the podcast allows him to bypass traditional media to talk to his constituents about important issues.

“How convenient that the mainstream media and the cogs in the machine of the Biden-Pelosi Democrat Party want this to stop,” Cruz campaign spokesperson Macarena Martinez said in a statement for this article.

The statement reiterated that Cruz appears on the podcast “for free” but otherwise did not provide details about the arrangement. A spokesperson for the super PAC did not respond to a request for comment.

Truth and Courage PAC disclosed its latest revenue from iHeartMedia on Thursday, filing a monthly campaign finance report that showed it received $156,186 from a subsidiary of the company on May 15. That brought the total to $787,036, or 8 percent of all the money that has flowed into the super PAC since it was formed in December 2021.

On campaign finance reports, Truth and Courage PAC has described the money from the iHeartMedia subsidiary as “digital revenue” or “digital income.”

A spokesperson for another iHeartMedia subsidiary, Premiere Networks, said in an email that Premiere Networks sells advertising inventory for Cruz’s podcast and that the money that has gone to the super PAC is “associated with those advertising sales.”

Cruz started the podcast, “Verdict with Ted Cruz,” in January 2020 to offer his thoughts on President Donald Trump’s first impeachment trial at the time. IHeartMedia picked up the podcast in 2022, and it now releases episodes multiple times a week.

In November 2022, the Campaign Legal Center had asked the Senate Ethics Committee to investigate whether the podcast violated a ban on senators accepting gifts from lobbyists, noting that iHeartMedia is a registered lobbyist. A CLC spokesperson said the Ethics Committee dismissed the complaint without explaining why.

The FEC has a reputation for being to slow to act on complaints, and it has at least two members with ties to Cruz. The chair, Sean J. Cooksey, is a former deputy chief counsel in Cruz’s office, and another member, James E. “Trey” Trainor III, is a longtime GOP lawyer from Texas who drew scrutiny earlier this year for having a Cruz campaign yard sign in his lawn.

Saurav Ghosh, CLC’s director of federal campaign finance reform, said the situation is a prime candidate for an FEC probe.

“There is kind of an open question about the exact nature of Cruz’s involvement with the agreement, but I think that is really the kind of detail the FEC can and should investigate and find out,” Ghosh said. “Did Cruz actually have some role in directing this money to the super PAC? Because role-playing in this context is not something he’s legally allowed to do.”

Cruz has a history of testing the limits of campaign finance law.

The Supreme Court in 2022 struck down a law that capped the amount of campaign funds politicians could use to recoup personal loans to their campaigns after elections. The case was brought by Cruz, who loaned his campaign $260,000 — just $10,000 over the prior limit — in his 2018 reelection bid, seeming to lay the groundwork for the later legal challenge.

This post appeared first on The Washington Post

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