Loans Could Paint McCain Into Corner

Washington Post: John McCain's $4 Million Loan, Desire To Pull Out Of Public Financing Raises Questions

(WASHINGTONPOST.COM)  This story was written by Matthew Mosk.

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Sen. John McCain's campaign and a Bethesda bank strongly defended $4 million in loans yesterday, as Democrats questioned their legality and said that the way they were secured requires the Arizona Republican to abide by federal spending restrictions.

Trevor Potter, a former Federal Election Commission chairman who is McCain's lawyer, wrote in a letter to the nation's top election official yesterday that the loans were proper and that they should not prevent McCain from withdrawing from the presidential public financing system.

On Monday, the Democratic National Committee filed a complaint with the FEC arguing that the way the loans were structured -- by using the promise of federal matching funds as collateral -- requires McCain to remain in the system. McCain "secured a $4 million line of credit to keep his campaign afloat by using public financing as collateral. He should follow the law," said Howard Dean, the DNC chairman.

The dispute centers on some of the most esoteric aspects of campaign finance law, but the implications for McCain's presidential bid are potentially serious. McCain applied for public financing last year, when his campaign was faltering. In February, when his campaign had turned around, he wrote the FEC seeking to exit the system. But to do so, McCain needed to show he had not yet received any federal funds and had not used the promise of those funds as collateral to borrow money.

Should the FEC or a federal court force him to remain within the system, he would have to abide by a $54 million spending cap until September, when the primary season ends. His campaign had spent $49 million as of Jan. 31, reports show.

Potter gave the FEC a letter from the lawyers for Bethesda-based Fidelity & Trust Bank that said both parties were careful to avoid using the federal matching money as collateral. Barry C. Watkins, the bank's president, said in an interview yesterday that the loan was secured instead with McCain's promise to raise more money in the future.

"McCain has been raising money for a long period of time," Watkins said. "It was that long history that meant there was little risk."

Still, questions about the legality of the deal have turned the fine print of McCain's borrowing into a source of intense scrutiny among leading campaign lawyers. Several suggested McCain has landed in a legal bind: If McCain used the promise of public financing to secure the loan -- as Democrats suggest -- he faces strict spending limits. If public funds were not involved -- as Potter argues -- that poses other problems.

Potter said the campaign offered as collateral its assets, including McCain's massive fundraising lists and his willingness to keep raising from them. But that may not satisfy the FEC, which requires that politicians borrow using only terms that assure repayment.

"If the bank is saying they lent him money on the basis of future receipts, well, in presidential campaigns, their future receipts can be zero or millions," said Marc Elias, an election lawyer who arranged a loan in 2003 for the presidential bid of Sen. John F. Kerry (D-Mass.). "The idea that this would be a dependable source of collateral is preposterous."

Another question, Elias said, is whether McCain received special treatment in obtaining the loan. Watkins said McCain did not. But he noted that Fidelity's bankers had prior relationships with several top McCain advisers, including lobbyist Charles R. Black Jr. and campaign manager Rick Davis. Davis's consulting firm borrowed money from Fidelity bankers in the mid-1990s when they worked at Franklin National Bank, according to Watkins and public records. (Franklin National later merged with BB&T.)

Lawrence M. Noble, a former FEC general counsel, said he believes the commission, which currently lacks a quorum to consider the matter, would want to study the loans when they are at full strength.

"This is a very unusual loan, and at the very least it does look like they were trying to use loopholes to make it work," Noble said.

[smartprimate]

So many lawyers (including former FEC counsels) arguing the contractual equivalent of how many angels can dance on the head of a pin. The real decision must be adjudicated by a fully constituted FEC. One of the FEC republican nominations is being withheld from appointment by the junior Senator from Ill. In turn the republicans are holding up the Dems choice. Maybe it''s time for Obama and the others to release those FEC holdups... this is an upcoming critical election and we might need those FEC Commissioners.

[ontheleft]

McCain is breaking campaign finance laws but we all know he is going to weasel his way out of it. There''s no story here.

[homespunlady]

It both amazes and bores me how small and petty this political nitpicking has become.
If it''s illegal then he shouldn''t do it, if it''s legal then he can but either way the APPEARANCE of his actions is hypocrisy. You Can be legal and still a hypocrite.
Personally I have BIGGER things to worry about like Bernancke telling congress politely AGAIN that our national economy is MUCH LESS than stellar and WILL continue in that direction. Beyond that, there are several immediate threats to our nation OTHER THAN ginned up fake wars. We have a severe and growing infrastructure failure. there are several earthbound natural disasters that like Katrina we KNOW are coming but deny because we don''t have an EXACT date and time. Then there are the Stellar threats - near miss (between the earth and moon)by a meteor named Apothos in 2012 and a bigger and more serious problem a few years later we should be planning for.
Instead this nation has ABDICATED it''s scientific superiority and all I can hope for is China, Russia or another nation will take the leadership needed to face that challenge.

[homespunlady]

Posted by terrorislama at 04:49 PM : Feb 27, 2008

A long while back I brought up the Koolaid/Jim Jones thing when I was describing how mindlessly stupid unquestioning followers can be and the awful results that happen. Someone too the term and ran with it.

Jim Jones was a "Christian" preacher that went over the edge into megalomania. I believe he was a Republican politically before taking off to his South American gulag. Sort of like that nut case that did something similar in WACO - the town just down the road from the Bush "ranch".

Megalomania seems to be a trait of right-wing power hungry Fascists (Known as CORPORATIST in the ORIGINAL Italian definition) although I''m sure mindless followers will eventually believe ANYTHING they are told by the one they misplace their trust in.

With that in mind I recommend everyone to think for themselves and highly recommend learning about ALL sides of an issue.

[rushlimpdrug]

Posted by mudrose at 04:45 PM


Mudrose do us all a favor and go look for your daddy.

[andor3]

terrorislama: "look for yourself nancy"

He keeps posting things that back up my argument then acting like they are opposite. Almost as crazy and flip floppy as McCain. John... is that you? What year is it... how many fingers am I holding up... who did you take money from today?

[andor3]

"sorry champ,it refers to you..."

thanks for making my point so well! Show you how something works, and you say "sure but it would make me happier to continue to see it my own way, facts just confuse me and make me do uncomfortable things like think and analyze."

Well yes who are we liberals to interfere with your happy, flowery, moonbat, rightwing, koolaid drinker, fantasy reality world. Must be nice to be so ignorantly blissful...

[andor3]

"Koolaid Drinker--People who believe anything they are told. people who refuse to change there minds when confronted with facts."

Definition of republican supporter in other words [even with the misspellings]. Who is it who ignores scientific facts if they contradict favorite religious beliefs or business philosophy? Who is it who punishes people who tell the truth, when it is inconvenient or uncomfortable? who is it that smiles and claims success and mission accomplished while thousands of brave and innocent people are being killed and maimed? who is that claims we should thank Reagan for our rosy prosperity as Americans work harder than ever while their retirement savings dwindle, health care becomes unaffordable, and thousands lose their homes?"

that is why the republican rightwing moonbats smile while the ship sinks. Onward Captain McCain...

[andor3]

"It is about Campaign Finance you fool. "

Yes I understand: you McCain supporters need to minimize and bury this if you can. The issue is when McCain campaign was low on funds he wanted federal money--they deal is you get that if you agree not to take private money basically. He agreed, took the money, and a bank loaned him cash because he has those funds. Now he wants to change the rules and accept the special interest money being shoved at him.

Basically when he needed cash, he asked for it and got it under his own law, then used that money to turn his campaign around. Now he wants to pretend that that cash was not what got him here and change the rules. Sleazy for certain, illegal possibly. And all an indication of lack of character and integrity--playing by the convenient rules, not the right ones.

[mudrose-2009]

Terrorislama and mudhole %u2013 shouldn%u2019t you two go get a room? Then you can spew your %u201Cvenom%u201D on one another like good little ladies or *** or whatever else you pinheads think are derogatory terms.
Posted by nokoolaid

Aw, what''s the matter little girl. Somebody hurt your little feelings? Want us to make nice-nice and be polite. Tell me how do you manage to walk with your head always up your azz?

[mudrose-2009]

Good job--bringing us back to the story. You describe McCains actions well--take money from whoever is convenient, regardless of agreements, pretend a promise to the people can be revoked at any time for personal reasons. Essentially use whatever set of rules are best for yourself at the present--that is McCain/Bush?republicanism
Posted by andor3

You obviously don''t understand the issue and CBS never presents the issue in the light it''s supposed to be because they like to get a rise out of fools like you. It''s about Campaign Finance you fool. Something that McCain legislated. It''s about being able to move away from federal funding so like Obama, he can advance his campaign through private funding. The banks assured that he did not use federal funds as collateral and therefore there is no issue here. No scandal, no issue, no federal funds and therefore McCain can get his funding to keep his campaign running just like RamaLamaObama who collects a buck here and a buck there from all the little scabs who are deluded. Mr. Rhetoric would love to see McCain wrapped up in scandal just like all you little nubs. Sorry to spoil it for you. No issue, ladies. Just more CBS garbage.

[andor3]

oh so to be clear--mudrose called McCain a moonbat.

moonbat is now a term for the right wing dreamers and fantasy addicts. try to keep up.

[mudrose-2009]

Fascists/Communists.
Posted by mudrose at 04:27 PM : Feb 27, 2008

and wives and divorce lawyers,,, LOL

hahaha
Posted by terrorislama

Oh, I fogot and Socialists, too. Yeah, that''s the Herbert Marcuse crowd. Big Nanny Government Socialists. Everything''s gonna be okay as soon as we get our hands on everything you own. We have to share you see. What''s mine is mine and what''s yours is mine too. Just like wives and lawyers. Hahahaha.

[andor3]

mudrose said: "They don''''t care who they step on and they don''''t care what they take so long as it''''s accessible to them. What''''s theirs is theirs and what''''s yours is theirs too"

Good job--bringing us back to the story. You describe McCains actions well--take money from whoever is convenient, regardless of agreements, pretend a promise to the people can be revoked at any time for personal reasons. Essentially use whatever set of rules are best for yourself at the present--that is McCain/Bush?republicanism

[j-whitman]

mudnose,,,,, Either go get your nuts cut or go to a drug store & stock up on the abortion pill Bush put over the counter for you in 2006 ---- America would be safer

[j-whitman]

mudnose,,,,, Didn''t you say awhile ago you supported taxes ???

[mudrose-2009]

Moonbat (also "barking moonbat" and "moonbat crazy") is a term often used currently in U.S. politics as a political epithet referring to anyone that is liberal or on the left.

Posted by terrorislama

Actually they are Herbert Marcuse clones. They are the feel good anything goes crowd. They don''t care who they step on and they don''t care what they take so long as it''s accessible to them. What''s theirs is theirs and what''s yours is theirs too. Fascists/Communists.

[mudrose-2009]

thanks mudrose! will do... the liberals are being called in as we speak...

but now that you are a liberal, you will need some background: liberals do not tax excessively (that is a conservative strawman), they believe some things are better done for the common good and that unbridled financial competition does not always produce quality and well-being. It is all in the Constitution and the Declaration...
Posted by andor3

What''s in the constitution and the declaration. Are you deranged? The liberals do nothing to manipulate the constitution to suit their needs. Abortion is not a right, dolt, governement entitlements like medicare and medicaid are not a right. Nowhere is there anything in the constitution that says these entitlements are rights? The Founders wanted limited government, not big government entitlement programs. You are a crazed lunatic just like the rest of the left wing loons. Don''t explain you position to me as compassionate. You are communists and fascists. Nothing more, nothing less. Take you old european concepts and stick them up your azz. Witless and taddles will help you.

[andor3]

terrorislama said: "left wingnut moonbat alert"

moonbat is used for right wingers--they like living in a world of fantasy, flowers, herats, stars, and lucky clovers. Look where that got us. moonbat rightwingnuts.

[denn034]

If the DNC is right about using federal funds as collateral, then, McCain has to stay in the system. Like it or not, the DNC has this one right.