NY Times: Cruz Took Out $1 Million In Loans, Which Were “Not Disclosed In Campaign Finance Reports.” On January 13 The New York Times reported that Ted Cruz allegedly failed to disclose “a large loan from Goldman Sachs, where Mrs. Cruz works,” as well as a second loan from Citibank. The two loans, which together “totaled as much as $750,000 and eventually increased to a maximum of $1 million,” were not included in campaign finance reports during his 2012 Senate campaign. The Times added that “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”:

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.

[...]

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. [The New York Times, 1/13/16]

In Republican Debate, Cruz Calls Non-Disclose Issue A “Paperwork Error”

Cruz: “Yes, I Made A Paperwork Error Disclosing” The Loan. In the January 14 Republican Presidential Debate, when asked about the loan and his failure to disclose it, Cruz wrote it off as “a paperwork error”:

MARIA BARTIROMO (MODERATOR): Senator Cruz, The New York Times is reporting that you failed to properly disclose $1 million in loans from Goldman Sachs and Citibank during your Senate race. Your campaign says it was inadvertent. A million dollars is inadvertent?

[...]

SEN. TED CRUZ: In terms of their really stunning hit piece, what they mentioned is when I was running for Senate, unlike Hillary Clinton, I don't have masses of money in the bank, hundreds of millions of dollars. When I was running for Senate, just about every lobbyist, just about all of the establishment, opposed me in the Senate race in Texas. And my opponent in that race was worth over $200 million. He put a $25 million check up from his own pocket to fund that campaign. And my wife Heidi and I, we ended up investing everything we owned. We took a loan against our assets to invest it in that campaign to defend ourselves against those attacks. And the entireNew York Times attack is that I disclosed that loan on one filing with the United States Senate, that was a public filing, but it was not on a second filing with the FEC. Both of those filings were public. And yes, I made a paperwork error disclosing it on one piece of paper instead of the other. But if that's the best hit The New York Times has got, they better go back to the well. [Fox Business, Republican Presidential Candidates Debate, 1/14/16]

Media Fact-Checkers Call Out Cruz For His Deceptive Answer

NY Times Fact Check: “Ted Cruz Is Conflating Two Types Of Financial Reports” In His Answer. In a January 14 fact check of the debate, The New York Times chided Ted Cruz for his explanation, writing that Cruz “conflat[ed] two types of financial reports” and “failed to disclose any bank loans he obtained to finance his Senate race” on forms a candidate must file with the Federal Election Commission. The Times explained that "[f]ederal election laws require candidates to disclose such loans, and failing to do so has led, in some cases, to investigations and fines":

Mr. Cruz said he disclosed bank loans that he obtained for his 2012 Senate campaign with the Senate, but his failure to disclose them to federal elections officials was just a paperwork error.

Not quite.

Senator Ted Cruz is conflating two types of financial reports. One is the annual personal disclosure in which members of Congress list their assets and income. On those reports, he listed the bank loans -- without indicating that they were used for his campaign.

But it is the other type of report, which campaigns must file with the Federal Election Commission, that is at issue. On those reports, Mr. Cruz failed to disclose any bank loans he obtained to finance his Senate race.

So, while it is true that Mr. Cruz listed the loans in his Senate reports, he has never disclosed in any report that they were used for his campaign. Federal election laws require candidates to disclose such loans, and failing to do so has led, in some case, to investigations and fines. [The New York Times, 1/14/16]

AP: By “Citing A Mere 'Paperwork Error'” Cruz “Glossed Over The Fact That The Law Requires Candidates To Make Such Reports To Election Regulators.” In a January 15 fact check, the Associated Press reported that Cruz's explanation that he “made a paperwork error” in his failure to disclose the loans “glossed over the fact that the law requires candidates to make such reports to the election regulators.” The Associated Press added that Cruz neglected to address the fact that “a large chunk of those loans came from Goldman Sachs, where his wife works as an executive”:

CRUZ, asked about loans from two large banks totaling as much as $1 million that fueled his 2012 Senate campaign, said he and his wife “ended up investing everything we owned.” He acknowledged his failure to disclose the loans to the Federal Election Commission, saying: “Yes I made a paperwork error.”

THE FACTS: Cruz did, as he asserted, eventually disclose the loans in personal financial forms filed with the Senate. But citing a mere “paperwork error” in failing to report the loans to the FEC glossed over the fact that the law requires candidates to make such reports to the election regulators.

He also did not address the fact that a large chunk of the loans came from Goldman Sachs, where his wife works as an executive, and whether that might have made the loan possible. [Associated Press, 1/15/16]

Politico: Cruz's Failure To Disclose Was “NOT Just A 'Paperwork Error.'” In a January 14 fact check, Politico pointed out “Ted Cruz tried to minimize the $1 million loan ... suggesting his campaign made a paperwork error,” but a political-law expert in the original Times story had already “reject[ed] that excuse.” Politico concluded that Cruz's mistake was "NOT just a 'paperwork error'':

Cruz's Goldman loan: NOT just a 'paperwork error'

Ted Cruz tried to minimize the $1 million loan from Goldman Sachs and Citigroup that the New York Times revealed he failed to disclose, suggesting his campaign made a paperwork error, but it's not significant because he disclosed it elsewhere. He's referring to the disclosures of his personal finances he made as a senator, as opposed to the disclosures his campaign has to make to the Federal Election Commission. But the Times story quoted a political-law expert rejecting that excuse: you still have to comply with the FEC rules. The fact is Cruz's campaign lied when it said the cash injection came from “personal funds.” [Politico, 1/14/16]