Here’s where the federal limits come into play. At the time, the maximum a person could give to the primary was $2500. That means you need 400 people to max out to get to $1 million, and you need 4000 people to max out to get to $10 million. That, frankly, is really, really hard.
If you’re an incumbent, it’s not all that difficult. You have an existing infrastructure, you have “bundlers” in place (people who work to get lots of others to max out), you have name ID. “The rich get richer” is certainly how the political racket usually operates. I was trying to break that cycle.
The only reason I had a prayer of raising what we needed was that I had spent the past year running for AG. We had built at least some of the infrastructure; without it, I would have had zero chance of winning.
Texas’s no-limits system is what had let an unknown candidate without personal wealth start from nothing and succeed. That’s the counter-intuitive part: the campaign-finance limits help incumbents and substantially hurt unknown challengers. That’s exactly what they’re designed to do.
Many people misunderstand the role campaign funding typically plays. In the 1990s, Eddie Murphy starred in a light comedy called The Distinguished Gentleman, where he played a shady local con man who managed to get elected to Congress. He was thoroughly corrupt and simply wanted to raise as much money as possible. In the movie, Murphy has the following conversation with a leading D.C. lobbyist:
Lobbyist: “I’d like to do more money for you. But first I’ve got to get your positions on a few issues. Where are you on sugar price supports?”
New Congressman (looking quizzical): “Sugar price supports… where should I be, Terry?”
Lobbyist: “… Makes no difference to me. If you’re for ‘em, I got money for you from my sugar producers in Louisiana and Hawaii; if you against ‘em, I got money for you from the candy manufacturers.”
New Congressman (grinning): “You pick.”
Although somewhat exaggerated, that comedy exchange is basically right. Most people in Congress pick their positions on a given issue and then raise money from those who already support that issue. Whether sugar subsidies (I’m against) or Second Amendment rights (I’m for), there are donors who care about those issues and support candidates who do too. But, if I were on the other side of those issues (or a thousand more), there are donors on the other side who will happily support campaigns as well.
What the Washington Swamp is biased towards is the status quo. Incumbents. Established power players (on both sides). That’s why massive new spending bills are typically a bipartisan extravaganza. And strict individual limits favor—and are designed to favor—those with institutional power.
Take an issue like an Internet sales tax—something I’m passionately against. The Swamp is overwhelmingly for it because the large brick-and-mortar retailers are for it, and the large Internet retailers are as well (because it hammers their rivals). The only losers are the small online retailers, the mom-and-pop internet sellers. And they don’t have lobbyists. That’s why 70–80 percent of the Senate, from both parties, support creating on online sales tax—because it’s an issue that unites all the D.C. lobbyists. For eight years, I’ve led the opposition because it’s terrible policy, especially for the little guy.
Let’s look more closely at my races. My AG race was viable because we raised enough to be taken seriously; Peter Thiel’s $250,000 was essential for that. When I ran for Senate, the rules were more complicated. Federal candidates are not allowed to solicit more than the federal limits (then $2500). But, the rules say, you are allowed to introduce a donor to a super PAC, so long as you don’t make any requests for money yourself and you don’t discuss non-public campaign strategy.
So I introduced Peter to the Club for Growth. I followed the rules meticulously, so I didn’t ask him anything, I just told him that the Club was really good and effective. Peter wanted to have an impact on the race, so he gave the Club for Growth $1 million.
Then, the Dewhurst campaign did something stupid. They planted a nasty article entitled “Cruz Mega-Donor is Gay, Pro-Pot Billionaire.” The article highlighted Peter’s libertarian positions and slammed Peter directly, with on-the-record quotes from Dewhurst’s campaign. I was embarrassed that my friend was being made a political target. I called Peter to tell him about the article. He read it and was, understandably, pissed. So he promptly gave the Club for Growth another $1 million.
Over the years, my campaigns have received millions of individual contributions. In the presidential race alone, we had a total of 1.8 million contributions. And, with almost all of them, they’ve never asked me for anything. Most of our supporters have not been D.C.-lobbyist types, but individuals and small business owners. They just want someone to keep his word and defend the Constitution.
Peter, for all his generous support, has never asked me for anything. I presume from the press coverage that we disagree on gay marriage, but we’ve never discussed it. We may also disagree on marijuana legalization (I’d leave it to each state to decide), but I don’t know because we haven’t discussed that either.
When we do talk, it’s mostly two old friends hanging out. Many of our conversations concern Big Tech censorship, and what can be done about it. Peter’s on the board of Facebook, and he knows Silicon Valley and the tech world extremely well. And he’s one of the few people in that world really concerned about tech’s growing power and aggressive censorship, so his insight and advice on those issues is helpful.
He was able to support my Senate campaign, but only through the ridiculous means of a super PAC. That meant I had no input on how the money was spent, no role in selecting the messages. All told, the Club for Growth raised and spent about $6 million on my Senate campaign, which, when added to the $9.5 million we raised directly for
