Bombshell: Cruz Caught Hiding $1 Million Wall Street Loan To Pay For Campaign, FEC Investigating
Senator Ted Cruz (R-Tex), a first-term senator voted into Congress in what became a wave of obstructionist Tea Party candidates, was elected under the guise of reducing big-government spending. Cruz’s mission was to undermine President Barack Obama’s progressive agenda following his 2009 inauguration, when the president announced his intent to provide financial aid to bankrupt homeowners hard hit by Bush’s Great Recession. A worldwide period of economic downturn officially began in December 2007 – chiefly caused by tax-cuts for the wealthy, a deregulated Wall Street, and the cost of two off-the-books wars. Former President George W. Bush willingly bailed out Wall Street and the big banks, but did little to aid homeowners left in the lurch.
The New York Times is reporting that Cruz’s claim to have financed his fledgling campaign for Senate four years ago was built on a series of
inadvertent omissions lies. Cruz claims to have said to his wife Heidi:
“Sweetheart, I’d like us to liquidate our entire net worth, liquid net worth, and put it into the campaign, who readily agreed.”
As it turns out, the decision to pump more than a $1 million into Cruz’s successful Tea Party candidacy “was made easier by a large loan from Goldman Sachs, where Mrs. Cruz works. That loan was not disclosed in campaign finance reports.” Federal campaign finance regulations for congressional candidates are pretty straightforward – money coming from loans or lines of credit must be disclosed: “Bank loans to candidates and loans derived from advances on a candidate’s brokerage accounts, credit cards, home equity line of credit, or other lines of credit obtained for use in connection with his or her campaign must be reported by the committee.”
According to the Times, Cruz told them in an interview several years ago that:
“[Cruz] 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 the Times notes:
“A review of personal financial disclosures that Mr. Cruz filed later with the Senate does not find a liquidation of assets…What it does show, however, is 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 (my emphasis)”
While it is not uncommon for candidates to borrow money to finance campaigns, they are required to disclose those loans to provide transparency for voters. Cruz’s campaign has been hyperbolic about big-government waste, Wall Street bailouts, and the influence of big banks. It should be no surprise then that Cruz publicly said of Goldman Sachs: “like many other players on Wall Street and big business, they seek out and get special favors from government.” However, Mrs. Cruz was a managing director at that very firm at the time of the loan – Goldman Sachs.
Not surprisingly, Cruz’s campaign spokeswoman Catherine Frazier said the omission was an oversight on behalf of Senator Cruz:
“The failure to report the Goldman Sachs loan, for as much as $500,000, was inadvertent…there had been no attempt to hide anything…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.”
However, Kenneth A. Gross, a former election commission lawyer who specializes in campaign finance law, said: “that listing a bank loan in an annual Senate ethics report — which deals only with personal finances — would not satisfy the requirement that it be promptly disclosed to election officials during a campaign.”
The bottom line is that Republican hypocrisy is gobsmackingly breathtaking. Last month we reported on another US Senator who forgot to disclose millions of dollars in income. Now we have Ted Cruz, apparently violating campaign finance laws by not reporting loans, which clearly would have notified his constituency of the special treatment he received from a financial institution. The very same financial institution against which he built his campaign rhetoric – and for which his wife was a managing director. It should surprise no one that Cruz’s hometown newspaper, the Houston Chronicle, said in 2013 shortly after he was elected, that it regretted its endorsement because “he hasn’t lived up to expectations…Cruz has been part of the problem in specific situations…” – and this man is running for president.
that supports ONLY good Democratic candidates
Please consider supporting the fund. Thank you!
Opinion columnist and former editor-in-chief of Occupy Democrats. He graduated from Bennington College with a Bachelor's degree in history and political science. He now focuses on advancing the cause of social justice and equality in America.