By Lawrence Hurley and Andrew Chung
(Reuters) -Conservative U.S. Supreme Court justices on Wednesday appeared sympathetic toward Republican Senator Ted Cruz's challenge to a provision of a major campaign finance law that caps the amount of money political candidates can be reimbursed after an election for personal loans to their own campaign organizations.
Cruz, backed by fellow Republicans, has argued that the $250,000 loan repayment cap violates the U.S. Constitution's First Amendment guarantee of freedom of speech by unjustifiably burdening political expression. The federal agency that enforces election laws has called the cap an anti-corruption measure.
The provision is part of a bipartisan 2002 law that already has been chipped away at by the Supreme Court including in a landmark 2010 ruling https://www.reuters.com/article/us-usa-court-politics/landmark-supreme-court-ruling-allows-corporate-political-cash-idUSTRE60K3SK20100121 that allowed unlimited independent spending by corporations and unions during elections as constitutionally protected free speech.
The court has a 6-3 conservative majority.
The justices heard about 90 minutes of oral arguments in an appeal by Democratic President Joe Biden's administration, acting on behalf of the Federal Election Commision (FEC), of a Washington-based three-judge panel's 2021 ruling unanimously striking down the provision on free speech grounds.
The only potential impediment to a Cruz victory appeared to be concerns by some justices, including conservative Chief Justice John Roberts, that the lower court should have tackled a separate challenge to a related regulation before addressing the constitutional question at issue.
The FEC has said the cap was enacted to deter corruption by preventing political donors from making contributions after an election that flow directly to a candidate.
Cruz, first elected to represent Texas in the Senate in 2012, sued the FEC after his successful 2018 re-election race against Democratic rival Beto O'Rourke. Cruz had lent his campaign organization $260,000 but was limited by the law to a $250,000 reimbursement from his campaign.
The FEC argued that Cruz lacked the proper legal standing to bring the challenge because he deliberately loaned his campaign more than the cap specifically in order to justify his lawsuit.
Conservative Justice Clarence Thomas appeared dismissive of that argument, noting that people challenging unconstitutional laws often use such tactics. Thomas cited Homer Plessy, a Black man who sat in a "whites only" car on a train in Louisiana so he could challenge racial segregation in the South. The Supreme Court later upheld segregation in the notorious 1896 Plessy v. Ferguson ruling that was overturned six decades later.
If Plessy wanted to avoid litigation, "all he has to do is go to another car," said Thomas, the court's only Black member.
Conservative Justice Brett Kavanaugh said the cap appears to impose "a chill on your ability to loan your campaign money," which would potentially violate free speech rights under court precedents.
Kavanaugh also questioned why corruption fears are triggered only after a loan reaches $250,000, noting that individual donors can give just $2,900 to a campaign during each election cycle. Loans above the cap can also be paid using money raised before the election.
Conservative Justice Amy Coney Barrett said there was no evidence of corruption concerning repayment of loans before the provision was enacted.
Liberal Justice Elena Kagan, who as a senior U.S. Justice Department lawyer represented the FEC in the Citizens United case, defended the provision, saying post-election contributions aimed at paying off a loan are a direct gift to a candidate.
The law does not impose any restrictions on a candidate's ability to spend his own money, it merely "limits the amount of speech a candidate can make on somebody else's dime," Kagan said.
The Supreme Court has struck down various provisions of the 2002 Bipartisan Campaign Reform Act (BCRA), often called the McCain-Feingold law in recognition of its main sponsors, former Senators John McCain and Russ Feingold.
Campaign finance watchdogs have said lifting the cap would increase expectations by political donors for official favors by letting people and corporations donate directly to a winning candidate after Election Day. Cruz's lawyers counter that the cap serves no anti-corruption purpose. Like a related provision struck down in 2008, they said, it was aimed to protect incumbents facing wealthy challengers.
Cruz unsuccessfully sought his party's 2016 presidential nomination, later becoming a prominent supporter of former President Donald Trump.