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McCain Hits Snag in Campaign Finance Plans

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McCain Hits Snag in Campaign Finance Plans

Election 2008

McCain Hits Snag in Campaign Finance Plans

McCain Hits Snag in Campaign Finance Plans

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A letter to John McCain from the Federal Election Commission told him he could not opt out of the public financing system for the primaries just by saying he wants out. He needs a vote of the FEC, which has so many vacancies, it can't muster a quorum.

ROBERT SIEGEL, host:

The Republican nominee in waiting, John McCain, faced two problems today. First, the New York Times ran a story alleging that he had become too close to a corporate lobbyist and done favors for her clients a few years ago.

And if that wasn't enough, the chairman of the Federal Election Commission raised potentially serious questions about the future funding of the McCain campaign.

NPR's Peter Overby has more on that.

PETER OVERBY: In the presidential campaigns of 2000 and 2008, John McCain, more than any other Republican contender, has hung his hat on his reputation for straight talk and integrity. So when the story broke about the lobbyist, he immediately called a press conference. He said the lobbyist was a friend - no more than that - and he has plenty of other friends who are lobbyists.

But even as McCain was tending to that fire, another one broke out. The chairman of the Federal Election Commission, David Mason, sent a letter, questioning whether McCain has crossed the line in campaign finance law.

It has to do with his in-again, out-again approach to public financing. McCain was asked about it today.

Senator JOHN McCAIN (Republican, Arizona; Presidential Candidate): We think it's perfectly legal. We have - one of our advisers is a former chairman of the Federal Elections Commission, and we are confident that it is an appropriate thing to do.

OVERBY: Here is what happened. Last year, McCain applied for public matching funds. The FEC approved McCain for federal fund, but instead of taking them, he got a line of credit from a bank. He's drawn on it for $4 million since then.

He told the FEC he didn't want public financing anymore. But Mason's letters says the commission, not McCain, decides if he has taken any action that commits him to the system, for instance, using the prospect of federal financing to negotiate the loan.

McCain's lawyer, former FEC chairman Trevor Potter said earlier this week that McCain didn't do that, and he explains the situation this way.

Mr. TREVOR POTTER (Former FEC Chairman): The campaign was very careful not to use the federal matching certifications that it had for collateral because that would raise the question of whether you had used the federal funds, which you shouldn't if you're going to then withdraw from the system.

OVERBY: But then, there is this. After McCain rejected public financing, he went back to the bank to borrow more money. The new revised agreement said that if he lost in New Hampshire - and lost badly - he would reapply for matching funds to use his loan collateral.

Campaign finance lawyer Jan Baran says it's up to the Federal Election Commission.

Mr. JAN BARAN (Lawyer): If they conclude that the loan agreement pledged future public funding, then presumably the candidate will not be permitted to withdraw, will have to participate in the system.

OVERBY: That would put McCain under a spending cap of roughly $50 million between now and September. That number is a little squishy, but the amount he has spent already is pretty firm: 49.65 million as of January 31st. In short, a $50 million cap would cripple McCain's presidential bid for the next six months.

Baran considers the alternative.

Mr. BARAN: Well, if the campaign decides it wants to spend as much money as it wants to, they do so at their own risk.

OVERBY: One solution would be to have the commission vote on all this, but it can't because right now there are only two commissioners and four vacancies. McCain and his colleagues in the Senate could confirm a working majority for the commission, but the nominations have been deadlocked since last fall.

Peter Overby, NPR News, Washington.

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