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Cruz in Iowa Fuel Fight Over Ethanol Subsidies

Iowa's powerful ethanol lobby is going on the offensive against U.S. Sen. Ted Cruz over his opposition to a fuel standard important to the corn-growing state, but the presidential hopeful is shooting back.

U.S. Sen Ted Cruz gives a speech at the Iowa Freedom Summit in Des Moines, Iowa, on Jan. 24, 2015.

Editor's note: This story was updated Dec. 2 with a response from America's Renewable Future.

As U.S. Sen. Ted Cruz's stock rises in Iowa, he is increasingly finding himself in the crosshairs of one of the corn-growing state's most powerful lobbies: the ethanol industry.

And Cruz's campaign is aggressively pushing back, asking radio stations in the early voting state to take down an attack ad that labels him a "hypocrite" for his unapologetic opposition to an ethanol-friendly fuel standard.

The group behind the ad, America's Renewable Future, claims the Republican presidential candidate is favoring the oil industry — a major part of the economy in his home state of Texas — over farmers in the first-in-the-country caucus state. Cruz's campaign, however, says that is inaccurate because he supports getting rid of all energy subsidies, not just those for ethanol.

"It is blatantly false to suggest that Sen. Cruz wants to end the Renewable Fuel Standard while maintaining subsidies for oil," Cruz spokesman Rick Tyler said in a statement. “Cruz has repeatedly stated that he would end all energy-specific subsidies, both ethanol and oil, among others."

After the ad was released, the Cruz campaign sent a letter to Iowa radio stations requesting that they "immediately pull the advertisement from your rotation." The spot "makes a flatly false factual claim for which your station is ultimately responsible," Cruz general counsel Eric S. Brown wrote to station managers.

A spokeswoman for America's Renewable Future said Wednesday it "absolutely" has no plans to take down the ad. The spokeswoman, Majda Sarkic, provided a 12-page document that defends the accuracy of the spot.

The 60-second ad, set to air over the next three weeks, is part of an anti-Cruz offensive launched Tuesday by America's Renewable Future that includes digital advertising, direct mail and the creation of a group named Farmers Against Cruz. Sarkic described the campaign against Cruz as an initial "six-figure" investment to draw attention to his opposition to the Renewable Fuel Standard — a popular measure in the Hawkeye State — that sets a minimum amount of biofuels that must be blended into the gasoline supply.

"Politicians like Ted Cruz support subsidies for Big Oil but want to end support for ethanol," the ad says. "Cruz backs policies that threaten rural Iowa and thousands of jobs."

The group claims the senator is being influenced by "personal investments of up to $700,000 in oil" as well as $25 million in donations to his allied super PACs from oil interests. Cruz's most recent financial disclosure statement shows assets with oil companies such as Chevron and Exxon Mobil that are valued in the hundreds of thousands of dollars. Among the major donors to a cluster of pro-Cruz super PACs are West Texas fracking billionaires Dan and Farris Wilks.

"Cruz owes Iowans an explanation and the truth," Annette Sweeney, a farmer who co-chairs America's Renewable Future, said in a statement. “In the meantime, we have an obligation to the 50,000 caucus-goers who have pledged to caucus for a pro-RFS candidate to let them know that Ted Cruz is dangerous.”

Before asking the stations to yank the ad, Cruz’s campaign was flagging a speech he gave in June at the Heritage Foundation, a conservative think tank in Washington, D.C. “Big government energy mandates don’t stop with ethanol,” Cruz said, specifically citing enhanced oil recovery credits.

In the 12-page document, America's Renewable Future claims Cruz's campaign is misrepresenting the extent of his commitment to ending oil subsidies. For example, Cruz's campaign touts his support for the Energy Freedom and Economic Prosperity Act of 2014, but the legislation "does not target meaningful oil subsidies at all — it cherry-picks the two most inconsequential provisions that would save taxpayers nothing," the group says in the document.

Cruz criticized the Renewable Fuel Standard as recently as Monday night in Iowa, where he was wrapping up a three-day, 14-stop tour of the state. After a town hall in Bettendorf, Cruz denounced the Obama administration's move earlier in the day to increase the amount of ethanol in the American gasoline supply, reiterating his belief the government should not be "picking winners and losers."

Cruz has not shied from his stance on the mandate, which he has described as "corporate welfare." That stance was most evident during a forum this year in Iowa, where he bluntly stated his opposition to the standard, winning some applause from an audience largely made up of ethanol backers.

"Look, I recognize this is a gathering of a lot of folks who the answer you'd like me to give is, 'I'm for the RFS, darn it.' That'd be the easy thing to do," Cruz said at the Iowa Ag Summit in Des Moines. "But I'll tell you, people are pretty fed up, I think, with politicians that run around and tell one group one thing, tell one group another thing, and then they go to Washington and they don't do anything they said they would do."

Cruz regularly brings up the episode when asked about the mandate on the campaign trail in Iowa, saying it shows how he is willing to stick to his principles even in unfriendly settings. He has also used it to differentiate himself from his GOP rivals, claiming that every other Republican at the event embraced the mandate, including some who had previously opposed it.

"Yet when they were all on that stage, somehow they magically did a back flip and turned around and they were for it," Cruz said in October during a stop in Rockwell City, Iowa.

Cruz's campaign also took the opportunity Tuesday to ding opponent U.S. Sen. Marco Rubio of Florida, who has advocated keeping the Renewable Fuel Standard in place until 2022.

In the statement, Tyler said, "Rubio champions corporate giveaways like the RFS and sugar subsidies that pick winners and losers in order to enrich lobbyists at the expense of the American taxpayers." 

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