Today’s Must ReadThis John McCain does not need.
While he’s busy this morning responding to this morning’s New York Times story, the AP reports that the head of the Federal Elections Commission is questioning whether McCain will be allowed to drop out of the public financing system.
The reason, of course, stems from McCain’s too-clever-by-half $4 million bank loan in December. We outlined the deal on Monday.
To review briefly: in December, McCain, who’d earlier opted in to the public financing system, needed cash. The FEC had already certified that he was owed $5.8 million in public matching funds — but he wouldn’t be getting that money until March. And he didn’t want to absolutely commit yet to using that system, because it would limit his campaign to spending only $54 million through the end of August. And FEC rules say that using public matching funds as collateral locks a candidate into the system.
So McCain struck a deal with the bank: he promised to only commit to using the system if he lost the primary. If he won, he would opt out of the program, and he’d be more than able to pay the bank back, because the funds would come flowing. McCain’s lawyers were evidently very pleased with the canniness of this arrangement.
If you’re confused by this, don’t worry: so, apparently, is FEC Chairman David Mason. McCain officially notified the FEC earlier this month that he was no longer in the public financing system for the primary. Now Mason has responded with a letter saying essentially, not so fast. It looks like you used the public matching funds as collateral.
Update: You can read the letter here.
If the FEC ultimately decided that McCain could not opt out of the system, the consequences would be severe for him. He’d be limited to spending $54 million through August — meaning that the Democratic nominee would be able to outspend him several times over.
But there’s a major catch, of course. The FEC can’t take any official action, because it’s still shut down over the deadlock in the Senate. The FEC needs four commissioners to act; it currently only has two.
So all the FEC can do for now is send inquiries. But if by some miracle the impasse in the Senate were broken, it could mean trouble for McCain.
