have delved into the legal questions about a super PAC generating hundreds of thousands of dollars in corporate revenue from a popular podcaster: Sen.
Additionally, The Daily Beast has uncovered new information, with campaign finance records showing tens of thousands of dollars in iHeart lobbyist contributions going to the Cruz campaign. Since the podcast deal was inked in late 2022, the Cruz campaign has received donations from at least seven lobbyists registered to represent iHeartMedia’s interests before the federal government, records show, raising even more questions about the nature of the deal.
Campaign finance experts told The Daily Beast that, even if Cruz isn’t breaking the law, he’s certainly testing the limits. Jordan Libowitz, communications director for Citizens for Responsibility and Ethics in Washington, said that while he’s never seen a political group try this, it looks like Cruz and the super PAC could get away with it.
“Neither federal election law nor the tax code contemplated income from a committee providing goods and services,” Kappel told The Daily Beast. “The conception is that committees received contributions and could invest that money, and then receive passive income from dividends and interest. No one contemplated that a PAC could be involved in a business and receive income from that.”
“Depending on the details of the podcast contract, Cruz may have violated the ban on federal candidates directing big money or corporate funds to a super PAC,” Fischer said.In response to The Daily Beast’s questions, an iHeart spokesperson reiterated that Cruz volunteers his time and is not compensated for the podcast, though his co-host Ben Ferguson gets a cut.
Fischer, along with every expert interviewed for this article, said it would also require serious suspension of disbelief to allow that Cruz was not involved in the decision to direct the money to the super PAC.
As the podcast developed, its scope expanded. Cruz tapped his rolodex for a wide range of special guests, including then-Attorney General Bill Barr, Hollywood star Jon Voight, and then-acting Deputy Secretary of Homeland Security Chad Wolf. He often released more than one episode a week, and today, four years later, he has recorded more than 400 episodes.
“Cruz has maintained that he doesn’t get paid from the podcast, but it’s not clear if that includes these appearances,” Caputo said. She singled out two potentially applicable ethics restrictions—the gift ban, and the prohibition on receiving speaking fees. “It would be hard to say that the podcast would fall under that,” Payne said, noting that podcasting appears similar to other exempted activities, like writing, transcribing, and—following a 1982 ruling—race car driving.
“The Senate Ethics Committee, in particular, is notorious for not doing anything at all to hold its own members accountable, even in the face of serious allegations,” he said. “In the interest of collegiality and the insular culture of the Senate, they just really don’t do anything—at all—ever.”from the Ethics Committee, for raising political cash in the U.S. Capitol complex. But the committee is notoriously lax.
“Was iHeartMedia considering its federal lobbying efforts when it entered into the Cruz deal?” Libowitz wondered.