McCain Camp: We Can Ditch Public Financing

Response Comes After Democratic Party Calls On Campaign Finance Regulators To Investigate Effort To Withdraw From System

(AP)  Sen. John McCain's presidential campaign told federal regulators Monday that he does not need their approval to withdraw from the public finance system for the primaries.

The campaign, in a letter to Federal Election Commission Chairman David Mason, also said McCain did not encumber his potential share of public matching funds as collateral for a crucial $4 million loan he obtained late last year.

McCain lawyer Trevor Potter said the Supreme Court concluded that public financing for campaigns is constitutional because it is voluntary. "As a result, candidates have a constitutional right to withdraw from the program," Potter, a former FEC chairman, wrote Mason.

McCain's loan, from Fidelity & Trust Bank, has become a central issue in the Arizona senator's attempt to bypass the public financing system and the strict spending caps that come with it. Mason told McCain last week that the commission's approval was required and that he needed to explain the terms of his loan.

"The campaign did not use its federal matching fund certifications as security for the campaign's bank loan," Potter wrote.

Lawyers for the bank said in their own letter Monday that the loan agreement was carefully drafted to give McCain the opportunity to withdraw from public financing during the primary elections. They said the loan terms specifically excluded from the collateral any potential share of public matching funds McCain was entitled to receive.

Potter, a Republican appointee to the commission, submitted the bank lawyers' letter to Mason. One of those lawyers, Scott E. Thomas, is also a former FEC chairman and Democratic appointee to the panel.

The flurry of correspondence came the same day the Democratic Party filed a complaint against McCain, calling on the FEC to investigate whether the likely Republican presidential nominee can legally bypass public financing for the primary and the strict spending limits that come with it. The FEC also has asked McCain to explain the loan terms.

Staying in the public financing system could be devastating for McCain because he would have to live within spending limits that he is already on the verge of surpassing.

The FEC last year approved, or certified, McCain to receive up to $5.8 million in public matching funds. McCain did not collect any of the money. To withdraw once such funds have been certified, a candidate must not have received any of the money nor encumbered it as collateral for a loan.

"The bank does not now have, nor did it ever receive from (McCain's campaign) committee, a security interest in any certification of matching funds," Thomas and lawyer Matthew S. Bergman wrote to Potter. "Any finding or determination to the contrary would be wholly inconsistent with the language of the loan documents, the intent and understanding of the parties and basic principles of banking, security and uniform commercial code law."

The loan documents specifically state that the collateral did not include McCain's right to the public funds. But the agreement with Fidelity & Trust Bank of Bethesda, Md., required him to reapply for matching funds if he withdrew from public financing and lost early primary contests.

"It is our understanding that, to date, none of those events have occurred," the bank lawyers wrote.

But Mason, the FEC chairman, told McCain last week that he must show that he did not use the promise of future public funds to help secure the loan and asked McCain to explain three specific provisions in the loan agreement.

Mason also said McCain must receive approval from four members of the six-member commission before withdrawing from the system - an immediate obstacle because the commission has four vacancies and cannot convene a quorum.

Potter, in his letter, challenged Mason's interpretation, noting that federal law and agency regulations contain no requirement for a vote to exit the system. As a result, he said, McCain's notification to the FEC on Feb. 6 that he was withdrawing from public financing should stand.

"The legal effect of Sen. McCain's withdrawal - whether it is found to occur automatically via his letter of Feb. 6 or is later ratified by a vote of the new commissioners - will be the same: Sen. McCain will not be subject to the program's spending limitations after Feb. 6, 2008," Potter wrote.

The DNC's complaint is also hamstrung by the lack of an FEC quorum.

Upon receiving a complaint, FEC staffers must notify the target and request a response. They then make a confidential recommendation to the commissioners whether to continue with a full investigation or whether to dismiss the complaint. Without a quorum, the FEC will be unable to make that determination.

The vacancies have not been filled because of a partisan dispute in the Senate. Many Democrats oppose nominee Hans von Spakovsky, a former Justice Department official, and Senate Majority Leader Harry Reid has proposed holding separate, simple majority votes on each nominee. Republicans want all FEC nominees voted on as a package.

[taddles-2009]

"Doesn''''t make what Dean is doing any more correct though.

Posted by crusherking at 02:29 PM : Feb 25, 2008"

How is what Dean is doing incorrect? He is simply pointing out that McCain is trying to game the system. McCain can''t use the public funds as collateral so he uses a friend who runs a bank to float him a loan using what as collateral? McCains ability to fund raise.

Considering several former FEC officials have noted that this seems to be very questionable banking practices, and if not illegal are certainly unethical, I think Dean has every right to inquire if "Mr. Straight Talk" only talks straight when it''s in his best interest.

[taddles-2009]

"Show me the ''''facts'''' presented by the NYT article that show he had an affair with a lobbyist

Posted by crusherking at 02:25 PM : Feb 25, 2008"

That''s not what the NYT article was about. If you read it, it stated that they found no evidence of an affair only that his staffers were concerned that there might be an affair.

The article was about the fact that he had a close relationship with a lobbyist and it seemed that he was making decision and using his influence to further that lobbyists agenda. Most people call that influence peddling, your kind calls that business as usual.

[taddles-2009]

"Suprise, suprise! McCain''''s record is as clean as a whistle when it comes to lobbyists.

Posted by mudrose at 11:38 AM : Feb 27, 2008"

Uh huh...Keeting 5 doesn''t count then right?

[mudrose-2009]

surprise, surprise, another republican who is in bed with the lobbyists and their money... surprise, surprise, another republican hypocrite who says what is morally right and what people can or cannot do... and then does it himself !!!!!

Posted by tulcak

Are you a dork? Suprise, suprise? RamaLama and the Clintoid are in bed with lobbyists too. Suprise, surprise? Ask RamaLama where his $90 million worth of pork went to. Hillary like the Woodstock Museum. Suprise, suprise! McCain''s record is as clean as a whistle when it comes to lobbyists. So don''t believe everything you hear. Check the record dolt.

[tulcak]

surprise, surprise, another republican who is in bed with the lobbyists and their money... surprise, surprise, another republican hypocrite who says what is morally right and what people can or cannot do... and then does it himself !!!!!

[tulcak]

veteran71, you are an idiot and so is ron paul

[j-whitman]

crusherking,,,,, His affair is his association with the lobbyists --- That never changed

[crusherking]

Homespunlady,
My point is that THIS issue being brought by Dean was a dirty trick. I am not speaking to any other issue here. We can all bring up dirty tricks by either party all day and that gets us nowhere. Its not like Republicans invented dirty tricks.. Trust, I''ve been around long enough to see it on both sides. Doesn''t make what Dean is doing any more correct though.

[oladywho]

What attributes do you want from our next president? If you use words like %u201Cstrong leadership, intelligent, trustworthy, honest, compassionate, fair-minded, high-principled, unimpeachable ethics%u201D, you%u2019re out of luck. To fill those shoes, we%u2019d need to have a horse running for president. To hear the critics talk, all the all the candidates are horse%u2019s patoots; a label we stick on people we don%u2019t like. Humans are subject to the frailties of our species and some of those frailties tend to make us unpopular. Horses may not always like each other, but they know which horse is the best leader. They follow that horse, because it has demonstrated its ability to lead the herd out of trouble. Which candidate has all the attributes you listed? You could be describing your best friend, or your neighbor. Anybody can run for president. You just have to get enough people to %u201Clike you.%u201D Discrediting has become everyone%u2019s business when we don%u2019t particularly like a candidate. Since most of us don%u2019t personally know the candidates, we have to rely on their records and people who know and endorse each candidate. When someone has the majority of the popular vote, it is a good idea to get in line and stand united. All the negativity in the world will not change my opinion at this point in the process. Until horses can run for president, we%u2019ll be stuck with humans, with all their imperfections. Where is Mr. Ed when you need him?

[crusherking]

Well Jwhit, Show me the ''facts'' presented by the NYT article that show he had an affair with a lobbyist.. You can''t because there are none. Sure, they have other facts in there, but none that show he was having an affair with this anyone. And don''t act like this is not commonplace in the Dems party either. There is a long list of adulterers that are associated with the Socialist democratic party.

[j-whitman]

All FEC investigations should be done quickly with due dilligence inorder to prevent this country from electing another corrupt lying President. ---- That''s a no brainer

[homespunlady]

Gotta say The Group of Privilege accusing Dean of Dirty Tricks is Just HILARIOUS.

Hmm... maybe Dean studied EXAMPLES from the BEST dirty trickster that managed W''s takeover - KKKarl Rove.

[j-whitman]

crusherking,,,, I would recomend reading the article ---- Your GOP has made a mountain out of a mole hill & drew more attention to McCains association with lobbyists.

http://www.nytimes.com/2008/02/21/us/politics/21mccain.html?_r=2&hp=&adxnnl=1&oref=slogin&pagewanted=2&adxnnlx=1203966438-M4u5vwcS7aPqsgO61uGCDQ

[j-whitman]

crusherking,,,, I''ll bet you never read the NYT''s article --- The article was well written & listed many facts disclosed in previous years.... Most of it told how he has delt with those problems

. McCain denying any of it is lying to your face. McCain only makes it worst & so does the attacks on the NYT.

[homespunlady]

So, does McCain declare all that "free" lobbyist "expertise" that the Corporations they represent pay so much for as CAMPAIGN CONTRIBUTIONS?

Or is it like the PRIVATE CHARTERED JETS provided by the CORPORATE MEDIA MOGUL PACSON (MS. EISEMAN''S EMPLOYER) he rode in and "reimbursed" for by paying for a REGULAR PLANE TICKET?

[crusherking]

Jwhit, I don''t care if they investigate, honestly, go ahead. It will just further cement the fact that Dean is a lunatic and an idiot(YEEHAWWWW). The only real problem I have is that Dean knows full well there is not a full board in place right now to do the approval/investigation. So he knows that nothing will come of this when he starts it.. Politics? Yes, in fact I''d say dirty, partisan politics designed to distort truth and mislead voters honestly.

[crusherking]

Hahaa. Tao. Why are u still beating a dead horse. There is nothing to substantiate the claims in the NY Times. NOTHING. The lady in question denies it, McCain denies, and no one has offered any evidence to show that ANY affair ever occured. Besides, why post that here? The discussion is about campaign finance.

[b-easy63]

Forget this issue--find out how deep in bed McCain is with the lobbyists he runs with or runs interference for.

[j-whitman]

crusherking,,,,, What''s the problem with FCC investigations you are afraid of ??? -
--- They should all undergo constant investigations to keep them honest --

--- McCain the Flip-Flopper aslo since you don''t know where he stands from on day till the other.... His campaign & his Senate office are run by lobbyists.

[taotxzen]

On Meet the Press, Brooks suggested McCain "only wrote two letters" as Commerce chairman

Summary: On Meet the Press, discussing the New York Times article about Sen. John McCain''s relationship with a lobbyist, David Brooks said he "do[esn''t] really understand the case" involving McCain and the letters he wrote to the Federal Communications Commission about an issue involving Paxson Communications, then suggested that McCain "only wrote two letters" as chairman of the Senate Commerce Committee. But the Times reported that McCain sent a series of letters to the FCC in a separate case, including "an unusually blunt letter to the head of the Federal Communications Commission, warning that he would try to overhaul the agency if it closed a broadcast ownership loophole."