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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