The Double Talk Express: McCain is a Fraud on Campaign Finance Reform

Posted by: AzBlueMeanie

This past Tuesday, John McCain pandered to the GOP conservative base by vowing to appoint conservative activist judges like John Roberts, Jr. and Samuel Alito to the Supreme Court.  McCain praised the justices as role models for the judges he would appoint to the court.

Apparently everyone has kissed and made up over the Roberts’ Court striking down a big chunk of the McCain-Feingold Bipartisan Campaign Reform Act (BCRA).

Or maybe McCain never really cared all that much about campaign finance reform in the first place.  McCain’s commitment to public financing questioned – The Boston Globe  His reputation as a campaign finance reformer is largely a media myth created by what McCain affectionately calls “his base.” 

Last year McCain carved out a loophole in the law to exempt aircraft owned by a candidate or his family or by privately held company they control.  This loophole allowed McCain to use his millionaire heiress wife’s private corporate jet at a substantial savings to his campaign.  McCain Frequently Used Wife’s Jet for Little Cost – New York Times  “Last summer, just before starting to use his wife’s plane, Mr. McCain was quoted in a newspaper report as saying that he did not plan to tap her substantial wealth to keep his bid for the Republican presidential nomination going.”  But boss, what about “Zee plane!  Zee plane!”

Last November when the McCain campaign had been declared dead by his media base (where’s the love?), McCain managed to negotiate a sweetheart deal with the Fidelity & Trust Bank in Maryland for a life saving loan to his campaign.  The $3 million line of credit was secured by his fundraising list and the highly unusual requirement that he take out a life insurance policy in case he did not survive the campaign.  With Crucial Loan, McCain Put His Bid Back in the Black – washingtonpost.com

Cleta Mitchell, a Republican campaign finance lawyer, said she believes the arrangement raises serious questions. "Did they base this loan on the fact that, even if he lost, he would still be a sitting senator and able to raise money?" she asked. "In my mind, that raises questions about whether he complied with Senate ethics rules," which bar members from using their position to negotiate financial terms that an average citizen could not.

Shortly before the New Hampshire primary, McCain returned to the bank to request an additional $1 million.  The bank wanted more than his campaign assets as collateral.  McCain promised that if his campaign faltered, he would commit to keeping his campaign alive and to reapply to the federal financing system so the money he 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.  McCain Got Loan by Pledging to Seek Federal Funds – washingtonpost.com 

According to the loan documents filed with the FEC, McCain agreed that if he did not win New Hampshire or place within ten percent, he would stay in the race for 30 days to reapply for public matching funds, and use that public money to pay off his private loan.  (This is your tax dollars at work).  McCain also agreed to stay within the spending limits to remain eligible for public matching funds, and he would not “break the limits without asking the bank first.”

McCain pledged his certificate of eligibility for public financing as security for this loan.  He also used his certificate of eligibility to gain automatic access to the ballot in several primary states including Ohio, and bypass the time consuming process and expense of gathering petition signatures to qualify for the ballot, as his GOP primary opponents did.  McCain thus materially benefited from his certificate of eligibility for public financing.

After winning New Hampshire, McCain was able to raise campaign cash and did not need to tap into the public financing.  After having gamed the system, McCain’s campaign notified the FEC that it would withdraw from public financing.  Not so fast.  It’s not that simple.

FEC Chairman David M. Mason (a Republican appointee) notified the McCain campaign that the FEC must approve a candidate’s withdrawal from public financing.  The FEC had questions it wanted answered about McCain’s sweetheart loan.  But the FEC currently only has two members and does not have a quorum to conduct official business.  FEC Warns McCain on Campaign Spending  The McCain campaign response was essentially “we don’t need no stinkin’ FEC permission,” and ignored the FEC, vowing it would continue to raise and spend money without limitation.

By signing up for the matching funds, McCain had agreed to adhere to strict state-by-state spending limits and an overall limit on spending of $54 million for the primary season, which lasts until the party’s nominating convention in September.  McCain has since blown past the primary spending limit.  Every dime he spends is a violation of the spending limit.

The Democratic Party filed a complaint in February with the FEC, alleging McCain materially benefited from his certificate of eligibility for public financing and he would exceed the primary spending limits. The Democratic Party | DNC to File Complaint Against McCain Campaign for Ignoring FEC Law ; The Democratic Party | Democratic Party Files Complaint Against McCain for Ignoring FEC Law.  Like McCain’s letter of withdrawal to the FEC, however, the FEC lacked a quorum to act upon the complaint. 

Because of the FEC impasse, the Democratic Party filed a lawsuit on April 14, 2008, asking the U.S. District Court to review whether McCain’s attempt to withdraw from public financing violated the law. DNC Files Lawsuit Against McCain Over Public Financing – Politics on The Huffington Post  The FEC has 60 days to respond to the lawsuit.

Now McCain’s “best friend for life” George Bush is attempting to stack the FEC with commissioners who will resolve this dispute in his favor.  Bush is seeking to purge FEC Chairman David M. Mason for being responsible enough to question the funding machinations of McCain’s campaign. In F.E.C. Moves, Some See Effort to Aid McCain – New York Times  Bush proposes to replace him with Donald McGahn, formerly an RNC campaign counsel and the ethics lawyer for Tom DeLay. 

As Bob Bauer points out at the Campaign Finance Law Guide Campaign Finance Law Guide: More Soft Money Hard Law (Bob Bauer) :

“For this maneuver to have been arranged for the benefit of Senator McCain, of all people — the John McCain who has regularly, severely criticized the FEC as a "corrupt" agency — is a remarkable turn in his career as a reformer.  A Commissioner who acted to enforce the law, to just raise an important question of enforcement, has been stripped of his post.  This was clearly in Senator McCain’s interest, this raw power play.  It is also in his interest to have the FEC, back in business minus Mason, arrange for his money for the fall campaign.”

McCain has a pecuniary interest in restoring the FEC.  Without official action by the commission, McCain cannot receive his $85 million in public financing for the general election.  Without a functioning FEC he would need either a court order or an act of Congress to amend the statute so he could receive the money.   In F.E.C. Moves, Some See Effort to Aid McCain – New York Times 

McCain has been cynically baiting Barack Obama about agreeing to accept public financing for the general election, but without a functioning FEC there would be no public financing of the general election.  McCain’s anemic fundraising to date will be obliterated by the Obama campaign’s far superior fundraising capability on a ratio of 3-1, perhaps even 4-1.  So now McCain desperately needs a functioning FEC stacked in his favor.

“In this one move, the White House ended McCain’s accountability for his use or abuse of the primary public financing system while putting him in position to take money for the general,” said Bob Bauer.

McCain is also attempting to skirt the $2,300 maximum contribution limit set by campaign finance laws with his new “McCain Victory ‘08” fund.  The joint entity combines the McCain campaign, the RNC, and four state entities (Wisconsin, Minnesota, Colorado and New Mexico so far), in a “hybrid legal structure.”  Washington Wire – WSJ.com : New McCain Fund Gets Around Donation Limits  The new structure allows up to $70,000 in individual contributions by channeling the money into different McCain-centric funds.  So a handful of his super-wealthy friends intend to make up for McCain’s lack of popular support among small donors?  Isn’t this the kind of influence that campaign finance reform was meant to eliminate?

Finally, Judicial Watch has filed a complaint with the FEC accusing McCain of improperly accepting donations from the Rothschild family at a recent fundraising luncheon at London’s Spencer House to benefit McCain’s presidential campaign.  U.S. political campaigns are prohibited from accepting contributions from foreign nationals.  McCain accused of accepting improper donations from Rothschilds | World news | guardian.co.uk ; Judicial Watch Calls on FEC to Investigate McCain Presidential Fundraising Luncheon Held in London | Judicial Watch   Where are the usual suspects on the right howling about foreigners influencing our elections, i.e., Buddhist Temple fundraiser, Norman Hsu, etc.?  Billionaire Brits are still foreigners under the law.

So there you have it.  The truth is that “Mr. Campaign Finance Reform” is a fraud.   May this media myth be laid to rest forever.