On Top of Everything Else, Ted Cruz Might Have Broken the Law

By Bess Levin, Vanity Fair

24 February 21

It sure sounds like the senator funneled political donations into his own pocket.

ed Cruz is currently in hot water for his decision to abandon Texas for Cancún in the middle of a state of emergency, for claiming the trip was his daughters’ idea, for getting caught in a web of lies over the origins of said trip, and for blaming the whole thing on both the media and the “assholes” who leaked his wife’s text messages which ultimately blew up Cruz’s spot. That’s kept him pretty busy for the time being, but it appears he may soon have to juggle multiple scandals, according to a new investigation concerning a shadow entity that the FEC may have cause to look into.

Salon’s Roger Sollenberger reports that in 2020, a leadership PAC attached to Cruz called Jobs, Freedom, and Security paid $1.2 million, or almost 80% of its entire operating budget, to a company called Reagan Investments LLC for “sponsorship advertising.” Per Sollenberger, “the only other committee to register any disbursements to that company was Trump Make America Great Again, for a fundraising promotion for Cruz’s books in December…However, the Trump group clearly marked the payment for ‘collateral: books.’” In other words, it’s possible Cruz may have bought his own books through this mystery company and then paid himself royalties, which would be illegal. Per Salon:

On Jan. 4, 2021…Cruz traveled to Georgia before the runoff elections, his leadership PAC reported a $240,000 expense for “sponsorship advertising” to Reagan Investments, which appears to correlate with another series of small-dollar donations that poured into the PAC over the next few days. It isn’t clear how much of the funds raised, if any, went to Republican runoff campaigns: Cruz’s PAC only spent a few thousand dollars in support of former Sen. Kelly Loeffler. In fact, most of the contributions rolled in after the runoffs were over and as the events surrounding the Jan. 6 insurrection were playing out, while Cruz joined a handful of Republican Senators to object to the counting of Electoral College votes.

Legal experts tell Salon that if the money was for promotional book sales, as the filings may suggest, then the leadership PAC could be using Reagan Investments as a pass-through to allow Cruz to keep the royalties, which are generally between 10% and 15% for hardcover books, and about half that for paperbacks. Political candidates are not allowed to do that through their campaign committees. But the identity of Reagan Investments itself poses a mystery.

According to Cruz’s PAC’s filings, Reagan Investments LLC is located in an Austin office building and matches the address listed for a consulting firm founded by Jeff Roe, who managed Cruz’s 2016 presidential bid and 2018 reelection campaign against Beto O’Rourke. There’s also this:

[Regan Investments LLC] does not appear in Texas business registries. OpenCorporates records, however, show that a company by that name was organized in Missouri on Jan. 23, 2020—two days after the PAC reported its first-ever payment to the company, of about $57,000. The agent on that registration, James Thomas III, was involved with a scheme that unlawfully funneled dark money from a conservative nonprofit to a political committee, resulting in a $350,000 FEC fine in 2018. In a phone interview, Thomas claimed he was simply the organizing agent and could not immediately recall who operated the company, or its purpose.

Roe was also connected to the dark money scheme, and although the FEC did not cite Roe for a violation, Thomas told investigators that he “primarily took direction” from Roe.

Brendan Fischer, director of federal reform at the Campaign Legal Center, told Salon: “I don’t know that we can conclude that Reagan Investments LLC is a pass-through for book purchases. Trump MAGA described its payments to Reagan Investments as ‘collateral: books,’ whereas Cruz’s leadership PAC described every payment to Reagan Investments LLC as ‘sponsorship advertising.’ Just because Trump’s payments were for a specific purpose doesn’t mean we can conclude that Cruz’s payments were for that same purpose when the payments were reported differently. That said, I really don’t know what ‘sponsorship advertising’ means, and it looks like Cruz’s leadership PAC was the only political committee that reported payments for that purpose in the entire 2020 election cycle. Cruz’s failure to meaningfully disclose how his leadership PAC is spending its money means we can only guess about where the million-plus ultimately went.” If Reagan Investments does serve as a pass-through for book purchases, though, and allows Cruz to collect royalties, the Texas lawmaker, per Salon, “would appear to be converting donations to personal use and possibly filing false FEC reports.”

Unfortunately, Cruz’s campaign did not respond to Salon’s request for comment, leaving…a whole bunch of questions in need of answers!