His real problem (or at least one of them) is this.
McCain applied to be certified for federal matching money last year, when his campaign was running on fumes. But unlike former North Carolina senator John Edwards, McCain never actually took the federal funds. He was merely preserving that option. Once his campaign started to take off, he wrote to the FEC requesting to withdraw from the program.Here's the response from the FEC. They said no. He can't withdraw. Which means he's tied into all the spending limitations he agreed to.
The Washington Post first reported last Saturday what the maverick Straight-Talk-Express man was trying to do. The Post begins:
A little later:
John McCain's cash-strapped campaign borrowed $1 million from a Bethesda bank two weeks before the New Hampshire primary by pledging to enter the public financing system if his bid for the presidency faltered, newly disclosed records show.
McCain had already taken a $3 million bank loan in November to keep his campaign afloat, and he sought from the same bank $1 million more shortly before this month's Super Tuesday contests, this time pledging incoming but unprocessed contributions as collateral. He never used the funds of the most recent loan, because his win in the South Carolina primary helped him raise enough money to compete in Florida, his campaign aides said last night.
Under the agreement, McCain promised that if his campaign began to falter, he would commit to keeping his campaign alive and to entering the federal financing system so the money he had raised could be used to gain an infusion of matching funds. Had that happened, he would have been forced to abide by strict federal spending caps before the Republican National Convention in September.Paul Kiel at Talking Points Memo puts it another way:
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.But things got complicated. Here's Josh Marshall from Talking Points Memo:
And this was the guy lecturing Senator Obama on campaign finance ethics.
Back in August McCain opted into the public financing system for the primaries. Then in December he needed to come up with some cash quickly. Well, no problem. He was already guaranteed over $5 million from the feds. So all he needed to do was put that guarantee down as collateral for the loan.
Only McCain didn't want to do that because once he formally made the federally-guaranteed money collateral then he gave up his right to later opt back out of the system.
But, he really, really needed the money. So McCain, along with his campaign finance lawyer Trevor Potter (whom I've met and is a very sharp guy) came up with a workaround. It went like this. McCain wouldn't make the guarantee collateral. But he promised that if his campaign tanked he would opt out of the system and then opt back in. This would mean remaining a candidate even after he knew he wasn't really in the race in order to a) get back the public money to pay his creditors and b) assure he could sign the original loan note with the de facto collateral while nonetheless maintaining his ability to once again opt out of the public financing system at any one of many possible future junctures at which his campaign might pop back from life support and it would be in his interest to go back to raising money from donors.
Of course, McCain's campaign did come off the mat. And since he now wants to raise and spend as much as possible before the end of the summer, earlier this month he did actually opt back out. The FEC, the outfit that enforces the campaign finance laws, says McCain's not allowed to opt out. But whatever, he opted out anyway.
I guess Senator McCain was in favor of public financing before he was against it.