 John McCain and his friends in the mainstream media are having a field day criticizing Barack Obama for opting out of the public financing system, something I continue to believe the public cares nothing about. But the media obsession with it this week all-but guarantees that McCain will be successful in keeping this alive as an issue, at least until Michelle Obama wears another really spectacular dress, or Cindy McCain poaches another cookie recipe. What the televised media has so far failed to do, is delve much into John McCain's history on this same issue. So far, only "Countdown" on MSNBC has cared much about it, but if we're going to whack Obama, and be forced to watch McCain moan about Barack " breaking his word," shouldn't we at least know what McCain has been up to?
Well while Johnny Mac calls Obama's decision a " big deal," (we'll get to his actual quote later in the post,) his team (and Brian Williams, sitting on on today's "Meet the Press") fail constantly, to remind the public about McCain's own public financing "big deal." From TPM Muckraker back in Feburary: McCain Campaign Banked on Taxpayer-Funded Bailout By Paul Kiel -
February 18, 2008, 5:15PM As The Washington Post reported on Saturday, John McCain's campaign struck a canny deal with a bank in December. If his campaign tanked, public funds would be there to bail him out. But if he emerged as the nominee, there'd be no need for public financing, since the contributions would come flowing. It's an arrangement that no one has ever tried before. And it appears that McCain, who has built his reputation on campaign finance reform, was gaming the system. Or as a campaign finance expert who preferred to remain anonymous told me, referring to the prominent role that lobbyists have as advisers to his campaign, "This places
McCain’s grandstanding on public financing in a new light. True reformers believe public financing is a way to replace the lobbyists’ influence, not a slush fund that the lobbyists use to pay off campaign debts." Here's the back story. As of December, McCain was still enrolled in the public financing system, but had yet to actually receive any public matching funds. The Federal Election Commission had certified that the campaign would be receiving $5.8 million in public funds. But they wouldn't get that money for a couple more months. In need of even more cash beyond the $3 million loan he'd already secured from a
Maryland bank (he'd taken out a life insurance policy as collateral), the McCain campaign was stuck in a bind. They needed more money, but the bank needed collateral.The promise of those public matching funds (to the tune of more than $5 million) was the only collateral the campaign could offer. But there was a problem with that. Using that promised money as collateral would have bound McCain to the public financing system, according to FEC rules. And the McCain camp wanted to avoid that, because the system limits campaigns to spending $54 million in the primary (through August). That would mean McCain would get seriously outspent by the Democratic nominee through the summer. (McCain has separately pledged to enroll in the system for the general election; that would give him $85 million in taxpayer funds for use after the party convention through Election Day but bar
other contributions.) So here's what the McCain campaign did. They struck a deal with the bank that simultaneously allowed his campaign to secure public funds if necessary, but did not compel his campaign to stay in the public system if fundraising went well (i.e. if he won the nomination). As McCain's lawyer told the Post, "We very carefully did not do that." He was not promising to remain in the system -- he was promising to drop out of the system, and then opt back in if things went poorly. In that event, the $5.8 million would still be waiting for him. And he'd just hang around to collect it, even if he'd gotten drubbed in New Hampshire and the following states. You can see the agreement here. The relevant paragraph is on page two.
McCain's bank deal stunk so much, the Democratic National Committee actually sued them. The suit was thrown out last month, but in doing so, the judge never addressed the substance of the claim. Instead, the dismissal was all about timing: Judge John Bates wrote in a five-page decision that the case is the FEC's to decide, and even though the commission has been unable to obtain a quorum for several months, the matter still remains in their jurisdiction. Federal law requires a party to file a complaint with the FEC and then wait 120 days before filing suit, Bates, an appointee of President Bush, pointed out in his ruling. The DNC complaint, which asks for investigation of a bank loan agreement the McCain campaign entered into with Fidelity and Trust Bank of Bethesda, was filed in April. Before the FEC's quorum troubles, the panel asked the McCain campaign to explain the agreement. Meaning that the FEC, if it can get a quorum, could yet decide that John McCain violated campaign finance laws that have his name on them -- somethng that would truly be unprecedented in American history, even in Bush-era politics.
The larger point here is that right up until the moment Barack Obama opted out of public financing, the McCain campaign has been trying in every way possible, legal and possibly "extra-legal," to get out of public financing as well. The difference is, Obama did so straight up, while Camp McCain has been trying to have it both ways -- in the system for the purposes of securing a loan -- out of the system once they thought the money was about to roll in.
Now, let's have Johnny Mac's quote from this past week, which you can now consider in context: “This election is about a lot of things but it’s also about trust. It’s also about whether you can take people’s word,” At least he didn't add, "and then take it to the bank."
UPDATE: Signs last week seemed to indicate that Team Obama would begin taking the gloves off if McCain continues to try and peddle public financing as a campaign issue (though inexplicably, they didn't prep Joe Biden to do so on "MTP" this morning.) The Politico reported early last week: that the Obama communications director, Bill Burton, was circulating the Washington Post story in an email with the subject line, "McCain Got Loan by Pledging to Seek Federal Funds." Burton wrote: The below Washington Post story outlines how John McCain substituted a special deal for straight talk, telling the voters one thing and his bank another. The bank wanted to be sure it would get paid: the taxpayers were used as the guarantee while he was publicly denying that he had taken their money. He didn't say anything about the current back-and-forth, but that seems to be where this is going. [Emphasis added]
Well it's not going that way yet, but we'll see if it does going forward. Labels: 2008 election, Barack Obama, campaign financing, John McCain, money and politics, presidential candidates |
