Ted Cruz faces complaint to feds about podcast raising money for his reelection

A pair of government watchdogs say the Texas Republican appears to be using his podcast's syndication deal to skirt federal campaign finance laws.

click to enlarge U.S. Senator Ted Cruz puts on a smug face at a 2021 conference presented by conservative group Turning Point USA in Phoenix, Arizona. - Wikimedia Commons / Gage Skidmore
Wikimedia Commons / Gage Skidmore
U.S. Senator Ted Cruz puts on a smug face at a 2021 conference presented by conservative group Turning Point USA in Phoenix, Arizona.
A pair of campaign finance watchdogs have asked federal regulators to investigate a deal between U.S. Sen. Ted Cruz and San Antonio-based radio group iHeartMedia that's funneled some $630,000 in ad revenue into a fundraising entity that lists its key goal as ensuring Cruz's reelection.

Made Tuesday with the Federal Election Commission, a filing by nonprofit groups Campaign Legal Center and End Citizens United argues the arrangement between the Republican senator and the media group violates federal election law.

Cruz's office has said he makes no money from a podcast called The Verdict With Ted Cruz that iHeartMedia syndicates to hundreds of radio stations. However, paperwork filed with the FEC indicates the media group has made substantial payments to the Truth and Courage super PAC, which describes its goal as "ensuring that Ted Cruz is re-elected to the United States Senate in 2024."

In a recent statement, an iHeartMedia spokeswoman said the payments to Truth and Courage are "associated with" sales of ad time the company sells on Cruz's podcast.

Under law, super PACs can raise unlimited amounts of cash to back federal candidates and accept direct corporate donations. However, federal candidates can't "solicit, receive, direct, transfer, or spend funds" on behalf of super PACs.

In their filing, Campaign Legal Center and End Citizens United argue the nature of the syndication deal strongly suggests Cruz directed iHeartMedia to pay corporate dollars into the Truth and Courage super PAC.

"The terms of iHeartMedia’s podcast agreement with Cruz are not public, and the company’s recent comments do not explain why it is sending money derived from ad sales associated with Cruz’s podcast to a super PAC supporting Cruz’s 2024 reelection campaign," the filing states. "The most reasonable and logical inference to be drawn from these circumstances, however, is that Cruz requested or directed, and iHeartMedia agreed, that iHeartMedia would transmit these funds to TCP, which then would use the funds to support Cruz’s candidacy."

Cruz's office and iHeartMedia officials were unavailable for immediate comment on the filing.

The watchdog groups urge the FEC to open an investigation and seek sanctions, including civil penalties, on participants in the deal that would be large enough to deter others from trying to skirt federal campaign finance laws.

"By soliciting or directing $630,850.09 of iHeartMedia’s corporate funds to or on behalf of TCP in connection with his 2024 election, Cruz appears to have brazenly violated these federal campaign finance laws, which are crucial to preventing real and apparent corruption in our federal elections, as well as promoting voters’ right to having a meaningful electoral voice through the democratic process," the filing states.

The complaint comes as Cruz, a two-term senator, faces what's likely to be tough reelection battle against U.S. Rep. Colin Allred, a North Texas Democrat who's already amassed an impressive war chest to take on the incumbent.

The money iHeartMedia has so far paid to Truth and Courage represents roughly a third of the cash it has raised in the current election cycle, according to news site Popular Information. The site also reports that Truth and Courage's executive director is Christine Babcock, who has worked as Cruz's administrative director for more than a decade.

In an emailed comment, Campaign Legal Center Senior Director of Campaign Finance Erin Chlopak said  "all available information" makes it look like Cruz and iHeartMedia struck a partnership to skirt federal laws preventing candidates from directly accessing unlimited corporate donations.

“This type of funding risks putting the priorities of wealthy special interests above everyone else and makes our political process more vulnerable to corruption,” Chlopak said. “Yet all available information makes it seem that a partnership between Texas Senator Ted Cruz and iHeartMedia has produced such an illegal transfer, with over $630,000 in ‘income’ from Cruz’s podcast moving to a super PAC supporting his reelection. To give Texas voters clarity, the Federal Election Commission must swiftly investigate this matter and determine whether Sen. Cruz played a role in directing this transfer.” 

End Citizens United President Tiffany Muller said in a written statement the senator's podcast deal raises serious ethical concerns.

“Ted Cruz is once again showing his hostility and total disregard for anti-corruption laws that are designed to prevent undue influence by corporations. By funneling over $630,000 of corporate cash into his super PAC, he’s brazenly attempting to skirt federal regulations — and it reeks of impropriety."

In comments to a TV station in his hometown of Houston, Cruz recently defended his deal with iHeartMedia, lashing out at "the media" for bias and arguing that the Senate Ethics Committee had given his distribution deal with iHeartMedia a clean bill of health.

However, that investigation didn't look into the money that's since flowed into the super PAC from Cruz's arrangement with iHeartMedia.

The FEC is unlikely to issue a ruling on the complaint until after the 2024 election. What's more, the commission — equally divided between Democrat and Republican members — tends to end up deadlocked on cases where there's not a glaring violation of the law, said Brett Kappel, a Washington, D.C.-based campaign finance lawyer who advises both parties.

Even so, Kappel said there's reason for the deal to raise an eyebrow among commissioners on both sides of the aisle. The question may be whether at least one Republican worries Democratic lawmakers could emulate the transaction and find a workaround for accessing unlimited corporate funds.

"It's definitely not routine," Kappel said. "The structure Cruz came up with is definitely something unprecedented."

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Sanford Nowlin

Sanford Nowlin is editor-in-chief of the San Antonio Current.

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