Ted Cruz, gold standard populist, owes Goldman Sachs for his Senate seat

On the campaign trail, Ted Cruz is a diehard populist. He thinks the Wall Street bailout was a bad idea. He co-sponsored a bill to audit the Fed. He’s for a freaking gold standard.

But does anyone believe that a politician who owes Goldman Sachs for his very political existence is going to be tough on financial institutions as President?

From the New York Times:

Ted Cruz, via DonkeyHotey / Flickr

Ted Cruz, via DonkeyHotey / Flickr

[Campaign finance]  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.

Heidi Cruz just so happens to be a managing director at — drumroll — Goldman Sachs. She is currently on a leave of absence to help Ted on the campaign trail.

The loan is especially troubling given that, as Cruz himself tells it, his campaign was in dire financial straits, and needed an injection of cash in order to stay afloat in his primary challenge to the frontrunner in the race, David Dewhurst. Cruz tells the same story over and over — that he and his wife liquidated all of their assets and spent all of their savings out of a deep-seated belief that winning that Senate seat was the most important thing they could do with the money. That story has now been shown to be bogus.

As the Times points out, had Cruz disclosed the loan to the FEC in 2012, there’d have been nothing legally wrong with it. However, had he properly disclosed the loan when it was issued, it could have seriously undercut his Senate campaign.

Just as it could undercut his presidential campaign now.

Because while a clear conflict of interest with a major financial institution might not be all that surprising for a politician, Ted Cruz has built his campaign around the idea that he’s different. The “Washington cartel” hates him because he isn’t one of them, he says, and so voters can trust him when he says that he’ll stand up to the big banks and the special interests. So when it turns out that he’s really just like everyone else after all, that hurts him more than it hurts, say, John Kasich, the ex-Lehman Brothers executive who no one thought was interested in reforming the financial industry to begin with.

Now Donald Trump has to decide whether to focus on this, or whether to stick to Cruz’s Canadian roots, at tonight’s debate. It’s a tough call, but I think he’ll stick with the birtherism.

Jon Green graduated from Kenyon College with a B.A. in Political Science and high honors in Political Cognition. He worked as a field organizer for Congressman Tom Perriello in 2010 and a Regional Field Director for President Obama's re-election campaign in 2012. Jon writes on a number of topics, but pays especially close attention to elections, religion and political cognition. Follow him on Twitter at @_Jon_Green, and on Google+. .

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  • It’s Fox Business News. They’ll ask Cruz to trot out his Mr. Burns impression again because that’s as serious as they can muster.

  • I still see McCarthy every time I see Cruz.

  • Trump’s demagoguery only includes a few notes, because that’s as many ideas as his supporters can process at any given time. Like a child managing to peck out Mary Had a Little Lamb on a piano. Oh, they’re masters at DoubleThink — fervently believing in multiple contradictory ideas at once — but complex rational thought? Forget it.

    With this, it’ll be, “Wait whut? A loan from his wife’s company? Illegal cuz he didn’t disclose it? No no — Cruz’s ass hit Canadian soil first and he has a Hispanic-sounding name, so that’s why he can’t be prezdint!”

    Again, like a child who can’t present a reasoned argument as to why something is a bad idea, such as climbing a stack of pots to get a cookie jar atop the refrigerator but only because “It’s not allooooowed!. The Founding Daddies said so!”

    The real problem is the FEC, which has been hamstrung by the Republicans. (Surprise!? Not.) They are almost completely non-functional this point, so that even if faced with evidence of electoral law-breaking behavior and stuff on par with what resulted in criminal charges in years past, nothing is going to happen now. They could have video evidence of GOPer candidates receiving briefcases full of cash from foreign governments and nothing would happen.

    And the thing is, most of the politicians now know that without any means of enforcement or prosecution, there really isn’t anything they can do which will draw criminal charges. Just PR problems.

  • The_Fixer

    I am with you, Jon, he’ll stick to the birtherism. It’s what will surely rile up his true believers. After all, he’s gotten them on board for his immigrant wall, it’s a short step to fold that into their xenophobia.

    The big question though, is why do Republicans fall for the most obvious of frauds? Cruz could not be more “Snidely Whiplash” in his rhetoric and demeanor. Even looking at him, all he needs is a mustache and a top hat and he’d be a dead ringer for the cartoon character.

    I can only conclude that it’s because Cruz, and people like him, feed their already existing fears and confirm what biases they already have. When a politician does this, it’s instant validation of their misguided thinking. Being authority junkies, having someone who puts himself in the class of Presidential candidates who confirms their most deeply held fears makes them feel better.

  • gratuitous

    Not to mention that the Goldman Sachs loan was made against the value of Mrs. Cruz’s portfolio. All through 2012, Candidate Cruz was sounding the tocsin that the ruinous economic policies of the Obama Administration were going to reduce us all to living in cardboard boxes on steam grates. We were going to be the next Greece.

    But by taking out the loan under the terms the Cruzes did, they were betting that the stock market was not only stable, but likely to remain strong. If Cruz actually believed what he was saying, he never would have taken the loan, because he’d have been subject to a margin call. So why was he campaigning on doom and gloom while conducting his personal and professional affairs on continued and increasing prosperity?

    I wonder if any of the financial gurus at Fox Business will think to ask Sen. Cruz about this at tonight’s debate?

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