Presidential candidate Ted Cruz neglected to disclose a loan from investment bank Goldman Sachs used to finance his 2012 Senate campaign, an investigative report by The New York Times has found -- unwelcome news for a leading contender on the eve of the Iowa caucuses.
The Texan is known for relaying the origin story of that successful run: He claimed to have asked his wife, Heidi, to agree to cash in their savings to fund the campaign. "Sweetheart, I'd like us to liquidate our entire net worth, liquid net worth, and put it into the campaign," he says the story goes.
However, a Times review of financial disclosures filed with the Senate found no personal cash infusion from Cruz that matched the figure spent on the campaign, but did show two loans obtained by the Cruzes -- one from Goldman, where Heidi Cruz works (she's now on a leave of absence), and one from Citibank, with no explanation of their purpose.
Both loans were repaid later that year. Neither loan appeared in federal filings that require candidates to identify the source of borrowed campaign funds.
A Cruz spokeswoman called the omissions "inadvertent" and told the Times disclosures for both loans had been made "in one way or another" in the senator's many financial filings. She stressed that there has been no attempt by Cruz or the campaign to hide any information, and that correcting filings would be made.
The Times said there's no indication the Cruzes got a special deal on the loan, and noted that borrowing money to run for office is legal as long as it is disclosed.
However, loans from large investment banks don't easily jibe with the image Cruz had been projecting about the start of his campaign: a hardworking couple of self-starters with the grit to risk their life savings in pursuit of a dream.
Cruz has been steadily gaining support of Republicans and is poised to do very well in the Iowa caucuses Feb. 1. He's run a campaign on morality and Christian values, and has vehemently opposed big government.
Kenneth A. Gross, a former election commission lawyer who used to specialize in campaign finance law, told the Times merely listing a bank loan in a Senate ethics report would not constitute full disclosure.
"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."
The news could cost Cruz some ground in the campaign and affect his showing at the Iowa caucuses.
