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After the Supreme Court's 2010 decision in Citizens United, there are few restrictions on spending money in federal elections. But Senator Ted Cruz (R-TX) may have violated one of the last legal guardrails to secure hundreds of thousands of dollars in support of his reelection campaign.
Citizens United resulted in the creation of Super PACs, which are entitled to raise and spend unlimited amounts of money on behalf of federal candidates — including cash directly from corporations. There is one major caveat, spelled out in 52 USC § 30125: federal candidates like Cruz cannot "solicit, receive, direct, transfer, or spend funds" for Super PACs.
If a federal candidate solicits, transfers, or directs funds for a PAC, it is no longer a Super PAC. It is a PAC connected to a candidate and must abide by the restrictions for such PACs. This includes a prohibition on receiving direct contributions from corporations and a maximum contribution of $5,000 from a corporate PAC.
In 2020, Cruz started a podcast, Verdict With Ted Cruz, to defend Trump during his impeachment trial. The podcast proved fairly popular, and in October 2022, Cruz struck a deal with iHeartRadio (iHeart) to syndicate the podcast on its 850 radio stations. During the announcement, Cruz's co-host bragged that iHeart would "fund production and dump a whole bunch of money into marketing." As part of the arrangement, Cruz agreed to increase the frequency of the podcast from once a week to three times per week, an aggressive schedule for someone with a day job as a United States Senator.
In a statement, the Cruz campaign said that Cruz hosts the podcast "for free," describing it as a volunteer position. But there appears to be quite a bit more to the relationship. Over the course of the last year, iHeart has paid $630,850 to the Truth and Courage PAC, a Super PAC devoted "to ensuring that Ted Cruz is re-elected to the United States Senate in 2024."
The payments to Truth and Courage PAC have steadily increased, from $48,798 in March 2023 to $214,753 in February 2024. iHeart confirmed that these payments were connected to Cruz's work for on the podcast. Rachel Nelson, a spokesperson for iHeart, said that the company sells advertisements on Cruz's show, and the payments are "associated with those advertising sales."
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What's clear from Nelson's answer is that, in exchange for producing a podcast for iHeart, Cruz or someone working on his behalf has directed iHeart to transfer a portion of the advertising revenue to Truth and Courage PAC. This is an apparent violation of campaign finance law. iHeart has not made any other payments to Super PACs this cycle.
iHeart spends millions of dollars lobbying Congress each year. Many of the issues targeted by iHeart fall under the purview of the Senate Commerce, Science, and Transportation Committee, where Cruz is the ranking member. In 2023, Cruz sponsored legislation prohibiting automakers from removing AM radios from some cars. iHeart owns more than 250 AM stations.
The money that Truth and Courage PAC has received from iHeart represents nearly one-third of all the money it raised this campaign cycle. Truth and Courage PAC is already running attack ads against Cruz's opponent, Congressman Colin Allred (D-TX), alleging Allred is personally responsible for various murders. The Executive Director of the Truth and Courage PAC is Christine Babcock, who spent years working for Cruz as his scheduler.
The race between Allred and Cruz is considered one of the few competitive Senate campaigns this year. In 2018, Cruz beat his Democratic opponent by just 2.6 percent.
Cruz attacks the media
Instead of explaining the hundreds of thousands of dollars that iHeart is transferring to a his Super PAC, Cruz attacked a member of the local media for raising the question. "It really is sad what’s happened to the media," Cruz told ABC 13 reporter Shannon Ryan. "The media exists right now seemingly to parrot left-wing Democrat attacks."
Cruz claimed that the Senate Ethics Committee investigated "these same issues" previously and "threw it out" because it had "no basis in law." That is false. In 2022, the Campaign Legal Center filed a complaint claiming that iHeart media's financing of the production and marketing of the podcast violated the prohibition against members of Congress receiving gifts from lobbyists. Cruz defended himself by emphasizing that he received "no financial benefit" from the podcast and his participation was no different than "appearing on a network television show, a cable news show, or a podcast airing on iHeartMedia." The Senate Ethics Committee has not considered the hundreds of thousands of dollars of payments from iHeart to Cruz, which began after the previous complaint was filed.
"So all the Democrats are left to do is make false personal attacks, but the media, alright, I get you're gonna carry their water, but my request to you is simply actually cover the issues," Cruz told Ryan.
Cruz's podcast misinforms listeners about critical issues. For example, Cruz recently claimed that Biden was spending taxpayer dollars to fly "illegal" immigrants to the United States. He slammed CNN for refusing to cover the "story." But Cruz's story is false. The parole program, which has been used by every president since the 1950s except Trump, allows migrants to legally come to the US if they pay for their own transportation.
At least one corporation that previously advertised on Cruz's podcast is not buying Cruz's claim that the arrangement with iHeart is unproblematic. BP America has requested that iHeart stop airing its advertisements during Cruz's show. "We purchase advertising on iHeart based on the potential audience and do not specify by podcasts," a BP spokesperson said. "We were never informed that media spend was going directly to a super PAC and have instructed iHeart to remove our messages from any podcasts that direct advertising revenue to campaigns, PACs or political parties."
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