Ron Johnson insists he won't pocket $8.4 million from donors. But thanks to Ted Cruz, he could legally do exactly that.

• Sen. Ron Johnson has retroactively declared that his campaign owes him $8.4 million.
• He could now raise money from donors and give it directly to himself — but he insists he won't do it.

Last May, Republican Sen. Ted Cruz of Texas successfully convinced the Supreme Court to strike down a federal campaign finance law that proponents argued was intended to prevent corruption.

Specifically, the 2002 Bipartisan Campaign Finance Reform Act placed a $250,000 cap on the amount of money that candidates could raise after their election to repay personal loans they had made to their campaign.

Any additional money was considered to be a campaign contribution, not eligible to be repaid.

Supporters of that limit argued that it prevented candidates from soliciting donations to ultimately repay themselves. Without it, candidates could raise money with the full knowledge that it would end up in their own bank accounts.

But Cruz told Insider at the Capitol on Tuesday that the law discouraged self-funding candidates from running.

"They wanted to disincentivize any challenger from taking the risk and loaning their own money to their campaign," said Cruz. "Incumbents usually can raise money much more easily than a challenger."

In 2019, Cruz sued the Federal Election Commission after loaning his campaign $260,000, an amount just over the repayment limit, in the final days of his 2018 re-election campaign — intentionally setting up a challenge to the law.

That case eventually made its way all the way to the Supreme Court, and in May 2022, the court voted 6-3 in the Texas senator's favor in Ted Cruz vs. FEC, eliminating the repayment limit.

Cruz later paid himself back more than half a million dollars in loans that he could now recoup from his campaign account.

Furthermore, the FEC clarified in an advisory opinion in August 2022 that candidates could revive old loans to their campaigns that had long been forgiven and converted into contributions.

"The whole system is now set up so that somebody who has loaned their campaign money last election cycle, 10 years ago, however many years back, could seek to bring that loan back," said Saurav Ghosh, the director of federal campaign finance reform at the Campaign Legal Center.

'I don't have any expectation to get paid back'

Enter Republican Sen. Ron Johnson of Wisconsin, the wealthy former CEO of a plastics manufacturing company who loaned millions of dollars to his campaign when he first ran for Senate in 2010.

While Johnson has been able to repay some of the nearly $9.4 million he's lent to his own campaigns over the last 13 years, $8.4 million of it was converted to contributions to his campaigns, never to be recouped.

But on Monday, Johnson declared on his 2022 financial disclosure that his campaign committee owes him millions of dollars.

"Based on the Supreme Courtʼs decision in Cruz v. FEC and the FECʼs [advisory opinion], all funds to prior campaigns have been deemed loans and suitable for repayment," wrote Johnson in the comments section of the disclosure form.

And months ago, in his campaign's October 2022 quarterly disclosures to the FEC, Johnson put a precise number on the amount of money that his campaign now owed him: $8,427,316.94, the sum of the remaining balance of 11 different loans he's made to his campaign, most of them in 2010.

"The committee is revoking the loan forgiveness and reinstating the loan," read a memo after each loan entry in the documents.

But Johnson's campaign doesn't have anywhere close to that much money.

According to his latest FEC disclosures, his campaign has just under $800,000 on hand.

That means that in order to repay himself the $8.4 million sum, Johnson would have to raise millions of dollars from donors for that purpose.

In a brief interview with Insider as he rode a subway car at the Capitol on Tuesday, Johnson insisted that would not attempt to recoup his old loans.

"I don't have any expectation to get paid back," said Johnson, saying he had simply been advised to change the way the money was reported on his financial disclosures.

"Now that that's the law, any amount you've contributed to your campaign, all of the sudden, is deemed to be debt," said Johnson. "It's just what I have to legally do on our financial disclosure."

The Wisconsin Republican added that he would have the money owed by his campaign listed as an asset on his financial disclosure "for the rest of time," despite his insistence that he never plans to cash in.

Pocketing money from a 'crap ton of people'

So far, Johnson has not repaid himself, according to his latest FEC disclosures.

But regardless of whether Johnson changes his mind and decides to cash in, his situation is a case study of what some warned would happen as a result of Cruz's challenge.

"Repaying a candidate's loan after he has won election cannot serve the usual purposes of a contribution: the money comes too late to aid in any of his campaign activities," wrote Supreme Court Associate Justice Elena Kagan in her dissenting opinion in the case. "All the money does is enrich the candidate personally at a time when he can return the favor—by a vote, a contract, an appointment."

Furthermore, the door is now open for other self-funding candidates to demand payback of campaign loans that they had previously forgiven.

Ghosh said that in the future, donors who contributed to Johnson — or any other politician whose campaigns now owe them lots of money — would be "doing so with the understanding that that's going to enrich him personally, or at least it could."

But Cruz argued that the potential for corruption was minimal, pointing to the FEC's current contribution limits; individuals can contribute up $3,300 to a campaign per cycle, while PACs can contribute $5,000.

"You want to talk about where corruption lies? It doesn't lie in $3,300 increments," said Cruz, noting that Johnson would have to recoup his $8.4 million sum from a "crap ton of people."

And prior to Johnson telling Insider that he wouldn't seek a loan repayment, Cruz vociferously defended the hypothetical repayment.

"If he wants to pay himself back, I think that's fantastic," said Cruz. "It's his own money. There's nothing corrupt.

"It is perfectly reasonable that Ron Johnson, after 10 years of making an interest-free loan to the American people, can pay back his own money," Cruz added.