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How McCain's Public Financing Two-Step Helps Obama
June 22, 2008 3:33 PM
Defending his broken promise to aggressively pursue an agreement with Sen. John McCain, R-Ariz., to enter into the public financing system, Sen. Barack Obama, D-Ill., during his Friday press conference argued that McCain "was all over the map on public financing, right? At the beginning of this process, when I think they were projecting raising enormous amounts of money, he said he’d consider opting out of the system. Later when his campaign had collapsed for awhile, he said he was definitely in the public financing system."
What's the truth of that charge?
**
Obama here is talking about McCain taking financing during the primary season.
At the beginning of 2007, McCain suggested that he would be interested in entering into the public financing system for the general election. But for the primaries, he was planning on raising $100 million of private funds and opting out.
That became a problem last summer, when his campaign all but disintegrated and had very little money.
In August 2007, McCain's campaign prepared to enter into the public financing system -- which would have capped how much he could spend in each state. On Aug. 10, McCain asked the Federal Election Commission for the authority to receive matching funds, and the FEC said he was eligible for $5.8 million.
But McCain did not collect any of the money. As McCain campaign spokeswoman Jill Hazelbaker put it at the time: "We have not made a final decision, but we are doing what’s necessary should we decide to opt into the matching fund system."
Towards the end of 2007, McCain took out a $4 million line of credit with Fidelity & Trust Bank. The contingencies of loan, which carried an 8.5 percent interest rate, required McCain to take out a $4 million life insurance policy.
At the end of January 2008, as McCain's prospects grew brighter in the wake of victories in New Hampshire and South Carolina, his campaign began to reconsider taking the matching funds, along with the accompanying spending caps. As Politico reported at the time, "John McCain is considering backing out of public financing now that his presidential campaign is raking in the cash."
And he ultimately did so. Meanwhile he used $2,971,697 from his $4 million line of credit with Fidelity & Trust as his campaign struggled to regain its footing.
Democrats charged that McCain had used his ability to qualify for federal matching funds as collateral, but the bank and McCain's lawyers said that was not true. What was true was that the agreement did require McCain to reapply for federal matching funds if he withdrew from public financing and lost early primary contests. The agreement also held as collateral his list of contributors and a pledge by McCain to seek further cash from those donors to pay of the loan.
McCain's maneuvering seemed to irritate FEC Chairman David Mason, a Republican, who wrote a letter to McCain in February saying McCain could only withdraw from public financing if he received the permission of the FEC and answered questions about the loan.
"The Commission made clear that a candidate enters into a binding contract with the Commission when he executes the Candidate Agreements and Certification," Mason wrote. "The Commission stated that it would withdraw a candidate's certifications upon written request, thus agreeing to rescind the contract, so long as the candidate: 1) had not received Matching Payment Program funds, and 2) had not pledged the certification of Matching Payment Program funds as 'security for private financing.'"
The McCain campaign at the end of February told the FEC it did not need the commission's approval to withdraw from the public financing system.
McCain lawyer Trevor Potter, a former FEC Chairman himself, told Mason that since the Supreme Court had ruled that public financing for campaigns is constitutional precisely because it is voluntary, "(a)s a result, candidates have a constitutional right to withdraw from the program." Potter clarified that "the campaign did not use its federal matching fund certifications as security for the campaign's bank loan."
The six-member FEC only has two members; four nominees are awaiting Senate confirmation. Without a quorum, it cannot act.
So in addition to filing a complaint against McCain with the FEC, the Democratic National Committee filed a lawsuit against the FEC to force the commission to investigate whether McCain's withdrawal from public financing was kosher.
"He used the matching funds to get the money when he needed it," said DNC counsel Joe Sandler. "That's the reality of what happened here."
Republican National Committee chief counsel Sean Cairncross called the suit "meritless….Once again, the DNC has neither the law nor the facts on their side. It is a matter of public record that the U.S. Treasury never made any payments to the McCain campaign at any time during the primary.''
Incidentally, the Fidelity & Trust Bank loan has since been re-paid.
In April, a judge ruled against the DNC suit, calling it premature since the FEC has 120 days to act on a complaint. Those 120 days expire Tuesday.
The DNC and Sandler will file the suit again on Tuesday asking a U.S. District Court to compel the FEC to act on its original complaint.
**
I cannot find any record of McCain saying "he was definitely in the public financing system," as Obama charged.
But while the loan appears to have been drafted to exclude as collateral the public matching funds, the fact that the bank would have required McCain to have reapplied for them if certain conditions had been met looks at the very least like a way to have those funds be a sort of theoretical, possible collateral while not fitting the legal definition of collateral.
Which is to say this messiness may be a big help for Obama in his attempt to make it look like neither he nor McCain were married purely to the public financing system.
- jpt
June 22, 2008 | Permalink | Share | User Comments (151)
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Mary: What do you think the voting age should be?
Posted by: 1percenter | Jun 22, 2008 11:57:32 PM
--GOP are thieves.----Does that mean that if the candidate is 35 years old and a natural born citizen but a convicted rapist or murderer, you would vote for him???? If so, this country is in trouble. LOL
Posted by: Mary | Jun 22, 2008 11:52:07 PM
GOP are Thieves--Please read my post correctly. I did not say a word about Obama being too young or under 35 years old or that he was not born in USA. I was referring to many of his YOUNG supporters.
Posted by: Mary | Jun 22, 2008 10:58:26 PM
---------------
Mary, I read your post. My point is he meets the requirements set forth by the constitution. That's all that's necessary for voters validate if he meets the voters requirements.
Posted by: GOP are thieves | Jun 22, 2008 11:21:39 PM
cincyr: We'll want our money back!
Posted by: 1percenter | Jun 22, 2008 11:14:36 PM
The McCain Victory '08 fund has been set up so that individuals can donate up to $70,000 to his campaign. It takes advantage of a loophole (drum roll please) in the McCain-Feingold campaign finance law. His campaign calls it a "hybrid legal structure".
Here's the breakdown of how the funds are distributed:
-$2,300 for general election
-$28,500 to the RNC
-Remaining funds, up to $10,000 each, go to what McCain's campaign has determined battleground states.
Et voilà! What will the people signing $70,000 checks over to McCain want in return?
Posted by: cincyr | Jun 22, 2008 11:07:03 PM
--GOP are Thieves--Please read my post correctly. I did not say a word about Obama being too young or under 35 years old or that he was not born in USA. I was referring to many of his YOUNG supporters.
Posted by: Mary | Jun 22, 2008 10:58:26 PM
--Seah-- I agree with you about Senator Obama. So many of his followers are young people who have not been "out in the real world" and simply believes everything the man says as the truth. He does have charisma and makes wonderful speeches when he is reading a prepared speech from a teleprompter. But certainly that does not qualify him to be the President. He lacks intergity, intelligence, experience and judgment. His policies on energy, the war, economy, etc. are not defined enough and he keeps changing his mind.
Posted by: Mary | Jun 22, 2008 8:31:46 PM
Mary here's a news flash for you.
The minimum age is 35. Here is the clause that defines this age and other requirements:
No person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty-five Years, and been fourteen Years a Resident within the United States.
Posted by: GOP are thieves | Jun 22, 2008 10:38:00 PM
tim: It seems that conservatives are faced with two democrats this election cycle. I await their VP choices to see which one is more 'right'.
Posted by: 1percenter | Jun 22, 2008 10:15:39 PM
Yes Seah,
You figured it out! Obama supporters are under mind control. That's it. It's a deliberate and well exucted movement based on mind control. We are all gulible and weak.
Glad YOU are too smart to fall for it though. Perhaps you can save the rest of us with your multiple blog postings every day. Glad there's smart folks like you out there to help show us the light.
It's amazing how much I've learned about my fellow Americans in the last six months. There's WAY too many people wrapped up in conspiracy theories based on inuendo, conjecture, and flat-out lies (like Obama won't face the flag or was sworn in on the Koran for example). Worse yet, is people like Seah will believe that crap.
Too many people think if it's on the internet, is must be true.
We need to improve our educational system and raise the standard for critical thinking in the USA.
It's definitely time for a change!
OBAMA 08!
Posted by: I'm a Mindless Zomby | Jun 22, 2008 9:59:39 PM
Obama's followers haven't been in the real world? Oh please. The people behind McCain can be broken down into three general groups, the super rich OLD MONEY, many of whom have had lives so devoid of hard work, they think the only purpose for gloves are to help you with your grip on a golf club.
The second are middle and low level white collar workers who think they are capitalists by being wage slaves for someone else. These are the people who listen to Rush Limbaugh and agree with everything he says while also believing they are rugged individualists. They've never done anything to stand out from the flock of sheep they're a part of, beyond being exceptional examples of sheep.
The last class is the white working class in southern and southern minded states. These are the highest quality people among McCain supporters and they know what a hard day's work is. Unfortunately, large segments of this group believe that Obama is a muslim, going to lead a revolution against white people, etc... because they trust what their dumbass friends say too much, without verifying things for themselves.
Myself, I've been successfully self employed for going on 6 years. I built my businesses from nothing but an idea and hard work. I know what hard work is, but more than that, I know what capitalism is because I don't just listen to some loud mouth on TV or radio extol the virtues of it, I live it every day, taking risks, failing, succeeding, and reinvesting.
I guarantee you the people saying crap about Obama supporters lacking "real world experience" have wage slave jobs working for someone else and know only how to be a good little follower. Their "real world" is taking marching orders from others. Like McCain. He's a good little follower, which is why he doesn't stand for hardly anything he stood for just a year ago, because he's following what the leaders of the RNC have to say. Contrast to Obama, he's a mover and shaker, a real leader, the DNC is following what he has to say, not vice versa.
Those of who actually compete in the real free market every day and make a living at it, rather than the wage slaves who are content taking their marching orders from others, we know leadership when we see it, and Obama has it and McCain does not. It's really that simple.
Posted by: Benjamin | Jun 22, 2008 9:58:39 PM
The republicans only care about this because, for once, the democrats are better financed then they are.
make no mistake about it, Obama IS PUBLICLY financed... it's just directly from the middle and lower class via his web site. ...the majority of his fund raising is coming directly from the middle and lower class public with donations under 100 dollars. People like me, I personally donated 25 dollars three times. (hey look, it's a grass roots movement like the ones republicans love to talk about so much!)
Posted by: Scott | Jun 22, 2008 9:42:24 PM
heather, Vero Possomus,
Obama is a blank slate, put together by the Axelrod machine (the new Karl Rove) to make you believe whatever you personally need to believe to give him your vote. All the other words you are hearing to rationalize anything about him or McCain, pure make-believe.
========================================
Obama, let's not bother to vet, please!
========================================
We're all just weary possums!
========================================
Posted by: WestCoastMessenger | Jun 22, 2008 9:22:20 PM
As one of these young voters 'who have not been "out in the real world"', I only have what I see and hear to make my choices on. What Obama is saying aligns with what I am experiencing, and what McCain is saying does not.
My parents are supporters of McCain. They have always voted Republican, and will again. No discussion, no reason, they just always have. Myself, I'm listening to what the candidates are saying, and Obama fits my experiences better.
Posted by: heather | Jun 22, 2008 9:06:34 PM
--Seah-- I agree with you about Senator Obama. So many of his followers are young people who have not been "out in the real world" and simply believes everything the man says as the truth. He does have charisma and makes wonderful speeches when he is reading a prepared speech from a teleprompter. But certainly that does not qualify him to be the President. He lacks intergity, intelligence, experience and judgment. His policies on energy, the war, economy, etc. are not defined enough and he keeps changing his mind.
Posted by: Mary | Jun 22, 2008 8:31:46 PM
seah said:
It is called mind conditioning, mind manipulation. Same techniques that Hitler used on the German people.
The techniques are more refined with all the studies done on the techniques since then.
********
Seriously! I dont hate John McCain. I dont thin he is the devil and I dont hink he has cloved hooves or horns.
Obama is just more in line with my ideals. Period.
You call it "mind control", I call it an informed voter.
Posted by: Vero Possumus | Jun 22, 2008 8:19:36 PM
Mr Obama Controls their minds. He has them thinking he is All good and the only one who can help them. That everyone else is evil and trying to get him. That no one cares about them but him.
It is called mind conditioning, mind manipulation. Same techniques that Hitler used on the German people.
The techniques are more refined with all the studies done on the techniques since then.
The Obama followers have no clue What has happened to them or that they are a part of it all. Just like the German people were not that dumb, they were just sucked into the vacuum with out them knowing it was happening.
Posted by: seah | Jun 22, 2008 8:09:30 PM
heather..
lol i just happen to be a lone conservative it seems in here.. odd huh?! im just trying to talk about facts and issues.. im not being rude to anyone.. he was backing the global warming debate, and i was just asking him why? is that unfair to ask?!
Posted by: tim | Jun 22, 2008 8:05:59 PM
larry..
yes! mccain is falling for it !!! thats my whole point. im voting for mccain, i didnt say i liked him.. lol anyone who has done any research on global warming and not just lisetened to al gore or all the liberal media on this subject, know that its not a real big issue. well let me rephrase that.. its an issue, but not an emergency. getting rid of pollution and emmisions is always a good thing. but,look at the climate change that has occured since we have started recording it(which is merely a blip on the screen as far as time goes) do you realize how minimal it has increased?! and do you realize how much of that is man made?! and how its cyclical? then they want to tell you the polar bears are dying because of it??!! are you kidding me?!! the earths climate has decreased since 1998? i mean, i realize that that is just ten years, but its the point that its not a man made issue!! its mother nature, and for these democrats (and select republicans, who just happen to be running for president.. coincidence?!) to try to "scare" us into believing this for political purposes?! its the same thing yours truly did with the war!!! its called fearmongering!! but you dont see it when its "your side" doing the fear mongering.. lol
Posted by: tim | Jun 22, 2008 8:03:05 PM
new york times?! time?! newsweek?! you have a few decent ones in there, but jeesh... no wonder you believe the polar bears are all dying.. lol
Posted by: tim | Jun 22, 2008 7:51:50 PM
********
Aactually, I would blame that on the Discovery Channel, LOL!
Posted by: Vero Possumus | Jun 22, 2008 7:55:30 PM
tim said:
vero... you're the one i wanted the reply from!! you were the one when asked if global warming was "for real" said go ask the polar bears!!!
******
Oops, sorry, I thoguht the question was directed at Melissa and I was just chiming in about the polar bears to be contrary!
Actually, I do beleive that it is a bit overblown, but not completely. But then again the world has a history of wiping all forms of life and scientists believe we are about 7,000 years overdue. So it is probably a natural progession of things.
We had ice ages and mini-ice ages thousands of years before man, so it only stands to reason that pattern will continue. Are we accelerating the process? Maybe, but I believe it's inevitable.
Hope that was the answer your were looking for.
Jeanne in MI
Posted by: Vero Possumus | Jun 22, 2008 7:53:32 PM
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