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  1. #1
    Senior Member Judy's Avatar
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    Ted Cruz Didn’t Disclose Loan From Goldman Sachs for His First Senate Campaign

    Ted Cruz Didn’t Disclose Loan From Goldman Sachs for His First Senate Campaign

    By MIKE McINTIREJAN. 13, 2016

    As Ted Cruz tells it, the story of how he financed his upstart campaign for the United States Senate four years ago is an endearing example of loyalty and shared sacrifice between a married couple.

    “Sweetheart, I’d like us to liquidate our entire net worth, liquid net worth, and put it into the campaign,” he says he told his wife, Heidi, who readily agreed.

    But the couple’s decision to pump more than $1 million into Mr. Cruz’s successful Tea Party-darling Senate bid in Texas was made easier by a large loan from Goldman Sachs, where Mrs. Cruz works. That loan was not disclosed in campaign finance reports.

    Those 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.

    Neither loan appears in reports the Ted Cruz for Senate Committee filed with the Federal Election Commission, in which candidates are required to disclose the source of money they borrow to finance their campaigns. Other campaigns have been investigated and fined for failing to make such disclosures, which are intended to inform voters and prevent candidates from receiving special treatment from lenders. There is no evidence that the Cruzes got a break on their loans.

    A spokeswoman for Mr. Cruz’s presidential campaign, Catherine Frazier, acknowledged that the loan from Goldman Sachs, drawn against the value of the Cruzes’ brokerage account, was a source of money for the Senate race. Ms. Frazier added that Mr. Cruz also sold stocks and liquidated savings, but she did not address whether the Citibank loan was used.

    The failure to report the Goldman Sachs loan, for as much as $500,000, was “inadvertent,” she said, adding that the campaign would file corrected reports as necessary. Ms. Frazier said there had been no attempt to hide anything.

    “These transactions have been reported in one way or another on his many public financial disclosures and the Senate campaign’s F.E.C. filings,” she said.

    Kenneth A. Gross, a former election commission lawyer who specializes in campaign finance law, said that listing a bank loan in an annual Senate ethics report — which deals only with personal finances — would not satisfy the requirement that it be promptly disclosed to election officials during a campaign.

    “They’re two different reporting regimes,” he said. “The law says if you get a loan for the purpose of funding a campaign, you have to show the original source of the loan, the terms of the loan and you even have to provide a copy of the loan document to the Federal Election Commission.”

    There would have been nothing improper about Mr. Cruz obtaining bank loans for his campaign, as long as they were disclosed. But such a disclosure might have conveyed the wrong impression for his candidacy.

    Mr. Cruz, a conservative former Texas solicitor general, was campaigning as a populist firebrand who criticized Wall Street bailouts and the influence of big banks in Washington. It is a theme he has carried into his bid for the Republican nomination for president.

    Earlier this year, when asked about the political clout of Goldman Sachs in particular, he replied, “Like many other players on Wall Street and big business, they seek out and get special favors from government.”

    In recounting the decision to put all of their savings into the campaign, Mr. Cruz said in the 2013 Times interview that Mrs. Cruz immediately agreed to his proposal, even though he was trailing in the polls and still viewed as a long shot against Lt. Gov. David Dewhurst, who spent $24 million of his own money on the race.

    “What astonished me, then and now, was Heidi within 60 seconds said, ‘Absolutely,’ with no hesitation,” Mr. Cruz said.

    Mrs. Cruz, who is on leave as a managing director at Goldman Sachs, later suggested that the reality was more complicated. She told Politico in 2014 that she thought they should apply “common investment sense” and not use their own money for the campaign “unless it made the difference” in winning. The article did not mention anything about loans from banks.

    The money from the Cruzes allowed his campaign to keep running television ads in the period preceding the primary election, including a $300,000 ad buy that highlighted the story of Mr. Cruz’s father’s flight from Cuba in the 1950s after opposing the Batista regime. Mr. Cruz earned enough votes in the primary to qualify for a runoff, where he defeated Mr. Dewhurst and went on to win the general election.

    The ethics reports that candidates file with the Senate require them to list all assets they held at the close of the year or that generated income during the year. Assets are reported in broad categories of value, such as $1,001 to $15,000 and $100,001 to $250,000.

    Mr. Cruz’s filings show that at the close of 2011, he and his wife had cash and securities in bank, brokerage and retirement accounts worth $1.3 million to $3.4 million. They also had mortgages and a loan against Mr. Cruz’s partnership equity in his law firm. During 2012, they sold securities worth $82,000 to $355,000, and the value of other holdings was reduced by, at most, $155,000.

    However, they also added a money-market account with $250,000 to $500,000 in it, and the value of other holdings increased by as much as $435,000. All told, the value of their cash and securities in 2012 saw a net increase of as much as $400,000 — even as the Cruzes were supposedly liquidating everything to finance Mr. Cruz’s Senate campaign.

    The biggest change in the Cruzes’ finances in 2012 was the addition of the two bank loans, each valued at $250,000 to $500,000, during the first half of the year. One was a margin loan from Goldman Sachs. Margin loans, which are secured by holdings in a brokerage account, are often used to buy more stocks, but can be obtained for almost any purpose.

    The other loan was a line of credit from Citibank. Even if the Citibank loan did not go directly into the Senate campaign, it could have freed up other assets for that purpose. While the Cruzes were well paid — he made more than $1 million a year as a law partner, and she earned a six-figure income as an executive in Goldman Sachs’s Houston office — they also had big bills, including mortgage payments and full-time child care.

    Both loans had floating interest rates around 3 percent, according to Mr. Cruz’s Senate disclosures, which appear to be generally in line with rates available to wealthy borrowers at that time.

    During the remainder of 2012, the Cruz campaign repaid Mr. Cruz for about half of the money he lent. His Senate disclosures show that he and his wife paid off the Citibank loan that same year. As for the Goldman Sachs loan, it remains outstanding, though the balance has been reduced to between $50,000 and $100,000.

    The federal guide to campaign finance reporting for congressional candidates makes it clear that if the original source of money for a candidate’s personal loan was a margin loan or a line of credit, it must be disclosed.

    “Bank loans to candidates and loans derived from advances on a candidate’s brokerage accounts, credit cards, home equity line of credit, or other lines of credit obtained for use in connection with his or her campaign must be reported by the committee,” according to the guide.

    http://www.nytimes.com/2016/01/14/us...2012.html?_r=0
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  2. #2
    Senior Member Judy's Avatar
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    Cruz Campaign: 2012 Disclosure Should Have Noted Goldman Sachs Loan

    by Patrick Svitek Jan. 13, 2016

    DORCHESTER, S.C. — Responding to a news article that said he did not report a loan from his wife’s employer during his 2012 U.S. Senate campaign, GOP presidential candidate Ted Cruz called the issue a "technical and inadvertent filing error" that he will fix if necessary.

    The New York Times reported Wednesday that a loan from Goldman Sachs was not disclosed in campaign finance reports during Cruz’s successful 2012 campaign. Heidi Cruz, Ted Cruz's wife, is currently on leave from her job as a managing director at Goldman Sachs.

    According to the Times report, Cruz put $1.2 million in “personal funds” into his campaign. A Times review of the Cruzes' personal finance disclosures found that in the first half of 2012, they received low-interest loans from Goldman Sachs and Citibank. The loans would grow to a maximum of $1 million before they began being paid down.

    Neither loan appears in reports that Cruz’s campaign committee filed with the Federal Election Commission. Candidates must note sources of money they borrow for their campaigns.

    “It is an inadvertent filing question,” Cruz told reporters after a campaign event in South Carolina. “The facts of the underlying matter have been disclosed for many, many years.”

    Cruz added there was nothing that came up that wasn’t already public knowledge.

    “Those loans had been disclosed over and over again on multiple filings,” he said. “If it was the case that they were not filed exactly as the [Federal Election Commission] requires, then we’ll amend the filings.”

    Earlier Wednesday evening, a spokeswoman for the Cruz campaign acknowledged that the loan should have been disclosed in campaign finance reports.

    “Cruz wrote a personal check to his campaign for $1.4 million. Those funds came from a combination of his personal savings, selling some stock and taking a loan out against his assets. Because he took a loan out against his assets, that detail should’ve been in the FEC form,” said Catherine Frazier. “We’re reaching out to the FEC and asking them their recommendation on anything we need to do to update or amend that report.”

    Cruz defeated then-Lt. Gov. David Dewhurst in a 2012 GOP primary runoff before handily winning the Senate seat in the general election.

    http://www.texastribune.org/2016/01/...have-noted-go/
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  3. #3
    Senior Member Judy's Avatar
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    By Stephanie Condon, Alan He CBS News January 13, 2016, 9:01 PM
    Ted Cruz: Failure to disclose Goldman Sachs loan was "inadvertent"

    Sen. Ted Cruz says that his failure to properly disclose a low-interest loan he received from his wife's employer, Goldman Sachs, for his 2012 Senate campaign amounts to an "inadvertent filing error."

    Questions about the loan came up as Cruz was on the presidential campaign trail in Dorchester, South Carolina. While he was talking to voters there, the New York Times published a report revealing that Cruz received low-interest loans from Goldman Sachs and Citibank, for as much as $1 million total, while he was running to represent Texas in the Senate. He did not, however, report the loans to the Federal Election Commission (FEC), as required.

    When asked about the unreported loans on Wednesday, Cruz told reporters that he and his wife Heidi Cruz funded his 2012 campaign with a combination of savings, sold assets and borrowing against their brokerage account.

    "We had a brokerage account that has a standard margin loan like any brokerage account has, and we borrowed against the stocks and assets that we had under ordinary terms," he said. "And so those loans had been disclosed over and over and over again on multiple filings. If it was the case that they were not filed exactly as the FEC requires, then we'll amend the filings, but all of the information has been public and transparent for many years."

    When pressed on the matter, Cruz added, "Our finances are not complicated. We put in the entirety of our savings, we did so through a combination of savings accounts and selling assets and taking a margin loan against other assets, and those facts are clear and transparent. And a technical and inadvertent filing error does not change that at all."

    Cruz was an insurgent candidate in 2012, who with the support of anti-Wall Street tea partiers, beat the GOP establishment's Senate pick, then-Lt. Gov. David Dewhurst, in the Republican primary.

    Heidi Cruz is currently on leave from her position as a Goldman Sachs executive to help with her husband's presidential campaign.
    © 2016 CBS Interactive Inc. All Rights Reserved.

    http://www.cbsnews.com/news/ted-cruz...s-inadvertent/
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  4. #4
    Senior Member Judy's Avatar
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    Cruz was an insurgent candidate in 2012, who with the support of anti-Wall Street tea partiers, beat the GOP establishment's Senate pick, then-Lt. Gov. David Dewhurst, in the Republican primary.

    Heidi Cruz is currently on leave from her position as a Goldman Sachs executive to help with her husband's presidential campaign.
    Did the Tea Partiers know that both Cruz and his wife Heidi worked for the Bush Administration and Heidi walked straight out of the Bush Administration to this nice job with Goldman-Sachs? Did the Tea Parties know that their candidates campaign was being financed by Goldman-Sachs and CitiPigs? How can you be an anti-Wall Street candidate when you're borrowing money from the largest most disgusting player in the bail-out of 2008 to finance your Senate campaign and your wife works for them?

    I just can't imagine that the voters knew or that the Tea Parties knew or they would have never sent him to the US Senate to begin with. It makes no sense that they knew. And if anyone thinks 3% interest rates for this kind of retail loan in 2012 was a proper rate, then you better do more research.

    Also, what kind of person would jeopardize the welfare of his family and throw everything at a political race he lost on the first ballot? I can't see where that conforms to Family Values. I don't see that being a Conservative Value. That seems to me to be someone who wants it so bad he'll do and say anything to get it.
    Last edited by Judy; 01-14-2016 at 12:08 AM.
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    Senior Member Judy's Avatar
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    January 14, 2016, 08:34 am
    Trump: Cruz loan a ‘very big thing’

    By Bradford Richardson

    Republican presidential front-runner Donald Trump late Wednesday declined to attack rival Ted Cruz in the wake of news that the Texas senator misreported campaign finances, but he did acknowledge that it was a “very big thing.”

    “Well, I heard it’s a big thing. I know nothing about it. But I hear it’s a very big thing,” Trump said in an interview on Bloomberg News's “With All Due Respect.” “I hope he solves it. I think he’s a nice guy and I hope he gets it solved.”

    The New York Times reported Wednesday evening that Cruz did not disclose a loan from Goldman Sachs, where his wife works, to his 2012 Senate campaign.

    Trump has previously attacked GOP primary rivals for being beholden by big donors, flaunting his personal wealth as an aegis against the corrupting influence of money in politics.

    The billionaire businessman also responded to a Cruz attack that he “embodies New York values.”

    “When you want to knock New York, you’ve got to go through me,” Trump said. “New York is an amazing place with amazing people.”

    Trump said New York’s resilient spirit was never on greater display than in the wake of the 9/11 terrorist attacks.

    “We took a big hit with the World Trade Center — worst thing ever, worst attack ever in the United States, worse than Pearl Harbor because they attacked civilians, they attacked people having breakfast,” Trump said.

    “And, frankly, if you would’ve been there and if you would’ve lived through that like I did with New York people, the way they handled that attack was one of the most incredible things that anybody has ever seen,” he added.

    Trump also said that he and Cruz have a similarly “strong temperaments.”

    “Honestly, I don’t know. He’s had a very nice temperament,” he said of Cruz. “He has a lot of problems with a lot of people. I can say there’s a lot of people that probably don’t like him.”

    “They don’t want to be called, you know, liars on the Senate floor and, frankly, it’s pretty tough stuff. But at the same time, he’s very upset like I am.”

    http://thehill.com/blogs/ballot-box/...very-big-thing
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