Lots more money is involved (millions, as opposed to tens of thousands), but no sexytime lobbyists in this McCain story: Is he improperly pulling out of the primary season public financing?
I’ll defer to Karen’s greater expertise on campaign financing as to tease out whether anyone is behaving badly here — or how bad the behavior is — but the question seems to rest on McCain tacitly using FEC certification as de facto, theoretical collateral for his $4m loan:
At issue is the fine print in the loan agreement between McCain and Fidelity Bank & Trust. McCain secured the loan using his list of contributors, his promise to use that list to raise money to pay off the loan and by taking out a life insurance policy.
But the agreement also said that if McCain were to withdraw from the public financing system before the end of 2007 and then were to lose the New Hampshire primary by more than 10 percentage points, he would have had to reapply to the FEC for public matching funds and provide the bank additional collateral for the loan.
In his letter to McCain, Mason said the commission would allow a candidate to withdraw from the public finance system as long as he had not received any public funds and had not pledged the certification of such funds “as security for private financing.”
It sounds to me like he was using the promise of re-applying for matching funs as a way of guaranteeing solvency should everything turn to crap in New Hampshire. It’s not really using the matching funds a collateral DIRECTLY, but it is involving the FEC in a private loan, albeit tangentially. I’m sure there are lawyers that could hash out the legality of the move, but the thing is they might not get a chance to:
Potter said McCain will continue with his campaign and not adhere to the public financing system’s limits on spending. Without a full commission, Mason has little enforcement power. Likewise, without an FEC, McCain has no way to appeal Mason’s conclusion.
Obviously, this DOES mean that he is definitely not pure, when it comes to, you know, purity. But he also did not have sex with Mason. Sort of a wash.
UPDATE: All sarcasm aside, the real impact of this FEC story is what Swampland commenters have been agitating about for awhile: If there is something shady about his decision not to accept public financing for the primary, it may make it more difficult for him to hammer on Obama’s reneging on public financing for the general.
UPDATER: Paul (one of them, at least, can’t keep you guys straight!) has some good links for the obsessive:
If you read the actual loan agreement (the first link I posted above), or Mark Schmitt’s description of it and what it means (the second link I posted above), you’ll see that he is doing much more than just involving the FEC “tangentially”. He fundamentally promised to allow the bank to force him to stay in the campaign and to re-apply for the public funds if he was doing poorly in the primary campaign. While this may not be technically using the certification as collateral, it has the exact same effect. While this may (or maybe not if you see the AP story today) not legally violate the letter of the law, it certainly violates the spirit of the law through legal technicalities.
Not to take a shot at the various McCain swooners in the media, but does that really fit the media’s “straight talk” narrative, or is it more akin to the semantic legalism that Bill Clinton was accused of?
I’ll take a look at these in a bit — thanks for providing. I’ll also attempt to get an answer from McCainworld on the issue. As for the “straight talk narrative”… Geez. While it’s cleverly framed as a yes or no question, it’s also something I could spend a long time on, time I don’t have at the second. A short version of a semi-thoughtful answer might point out that there are several versions of the “straight talk” narrative, and it does violate some of them. Further, that there are several versions of the “straight talk” narrative is, in itself, a problem for that narrative. I would still stop short of calling McCain Clintonsque, if only that definition seems to be shifting ever downward all the time… But I also promise to think more about this question and to try to come up with something coherent.