Thursday, January 14, 2016

Ted Cruz Failed to Disclose $1 Million in Campaign Loans

The ever slimy (and in my view, highly dishonest) Ted Cruz has had another welcomed wrinkle thrown into his campaign: a $1 million Wall Street loan that was not disclosed as required by election laws.  Cruz is ludicrously claiming that the failure to disclose the loan was "inadvertent."   As if a $1 million dollars is so easily over looked.  Making the disclosure failure all the more suspect is the way in which Cruz has railed against Wall Street and big banks even as his wife holds a position as managing member of Goldman Sachs.  In short, the Cruz excuses lack any credibility and the goal seems to have been to hide Cruz's Wall Street ties.  Here are highlights from the New York Times:

As Ted Cruz tells it, the story of how he financed his upstart campaign for the United States Senate four years ago is an endearing example of loyalty and shared sacrifice between a married couple.
“Sweetheart, I’d like us to liquidate our entire net worth, liquid net worth, and put it into the campaign,” he says he told his wife, Heidi, who readily agreed.

But the couple’s decision to pump more than $1 million into Mr. Cruz’s successful Tea Party-darling Senate bid in Texas was made easier by a large loan from Goldman Sachs, where Mrs. Cruz works. That loan was not disclosed in campaign finance reports.
Those reports show that in the critical weeks before the May 2012 Republican primary, Mr. Cruz — currently a leading contender for his party’s presidential nomination — 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 Mr. Cruz described it in an interview with The New York Times several years ago.

A review of personal financial disclosures that Mr. Cruz filed later with the Senate does not find a liquidation of assets that would have accounted for all the money he spent on his campaign. 

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.

Neither loan appears in reports the Ted Cruz for Senate Committee filed with the Federal Election Commission, in which candidates are required to disclose the source of money they borrow to finance their campaigns.

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.

“They’re two different reporting regimes,” he said. “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.”

All told, the value of their cash and securities in 2012 saw a net increase of as much as $400,000 — even as the Cruzes were supposedly liquidating everything to finance Mr. Cruz’s Senate campaign.

The biggest change in the Cruzes’ finances in 2012 was the addition of the two bank loans, each valued at $250,000 to $500,000, during the first half of the year.

The federal guide to campaign finance reporting for congressional candidates makes it clear that if the original source of money for a candidate’s personal loan was a margin loan or a line of credit, it 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 guide.

I suspect that Donald Trump will rightly have a field day with this new disclosure of Cruz's seemingly deliberate dishonesty and failure to disclose his Wall Street loans.  

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