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DNC Pushes FEC on McCain Loans

Updated 1:29 p.m.
By Matthew Mosk
The Democratic National Committee is preparing a vigorous legal challenge to try and stop the Federal Election Commission from voting Thursday on Sen. John McCain's brief flirtation with the public financing system.

The DNC's lawyers have prepared a letter to the FEC contending that the commissioners cannot vote to formally release McCain from the primary matching program because he never submitted a request to be released. They also argue that the FEC has not adequately investigated whether McCain's unilateral decision to exit the public funding system broke the law.

"It's our view that, in blowing off the requirements, McCain violated the law," said Joseph E. Sandler, the DNC's lawyer.

Lawyers for McCain and the Republican National Committee are calling these latest legal maneuvers "politically motivated and meritless."

The dispute over McCain's handling of the public financing system has been roiling for months. McCain applied to enter the matching program in late 2007 when his struggling campaign was starved for cash. Under the rules, if he takes any of the public funds, or borrows money using the promise of federal funds as collateral, he is required to stick with the program. That would mean adhering to debilitating spending constraints that would have paralyzed his campaign.

The DNC has argued that once McCain borrowed money using the promise of public funds as collateral, he was locked into the system. The McCain camp has disputed that notion, noting that the loan payments were not predicated on matching funds, but on other campaign assets, like e-mail lists. McCain's lawyer, Trevor Potter, has also argued that the primary matching program is voluntary, and that McCain had every right to withdraw when he determined he didn't want to participate.

"We believe the FEC staff recommendation was correct, and regret that the DNC would attempt to politicize what should be a straightforward legal question," said Trevor Potter, McCain's lawyer.

Sean Cairncross, the RNC's chief counsel agreed: "The DNC's letter only underscores how politically motivated and meritless their claim really is. At this point, it is clear their challenge is not worth the paper it is written on."

The FEC's lawyers have recommended the commissioners side with McCain on this dispute when the panel convenes Thursday.

The DNC's new, somewhat esoteric legal maneuver is unlikely to do anything at this stage to hamper McCain's efforts -- he's already been operating as if he was free from the spending limits anyway.

But Sandler argued that the effort is "not academic."

"It's real in the sense that they should hold him accountable," Sandler said. "There's not going to be any impact on what he can spend before he's nominated. But we'd like to see this issue resolved one way or another before Election Day. We think it would be good for voters to know whether he has violated the law. Especially one he's so well known for promoting."

By Web Politics Editor  |  August 20, 2008; 10:14 AM ET
Categories:  John McCain , The Green Zone  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Conservative Group Finds Networks Positive on Obama
Next: Lieberman to Speak at GOP Convention


On a funnier note, the comedy website 236 has a great feature on the convention:

Posted by: Taylor Lee | August 21, 2008 10:38 PM | Report abuse

Heather Dawn:

Current, up-to-date mailing lists are ALWAYS a hot commodity for political campaigns.


No, I was thinking of Joseph P. Kennedy, Sr. In 1938, as our Ambassador to Great Britain, Kennedy rejected the warnings of Winston Churchill that compromise with Nazi Germany was impossible; instead he supported Prime Minister Neville Chamberlain's policy of appeasement. Throughout 1938, as the Nazi persecution of Jews intensified, Kennedy attempted to obtain an audience with Adolf Hitler.

Shortly before the Nazi aerial bombing of British cities began in September 1940, Kennedy again sought a personal meeting with Hitler, again without State Department approval, "to bring about a better understanding between the United States and Germany."


Kennedy had a close friendship with Nancy Astor; the correspondence between them is reportedly replete with anti-Semitic tropes. As Edward Renehan notes:

"As fiercely anti-Communist as they were anti-Semitic, Kennedy and Astor looked upon Adolf Hitler as a welcome solution to both of these "world problems" (Nancy's phrase).... Kennedy replied that he expected the "Jew media" in the United States to become a problem, that "Jewish pundits in New York and Los Angeles" were already making noises contrived to "set a match to the fuse of the world."
By August 1940, Kennedy worried that a third term for Roosevelt meant war; as Leamer reports, "Joe believed that Roosevelt, Churchill, the Jews and their allies would manipulate America into approaching Armageddon." Nevertheless, Kennedy supported Roosevelt's third term in return for Roosevelt's support of Joseph Kennedy Jr. for Governor of Massachusetts in 1942. Even during the height of the conflict, however, Kennedy remained "more wary of" prominent American Jews such as Felix Frankfurter than he was of Hitler."

Posted by: JakeD | August 20, 2008 4:26 PM | Report abuse

If you are a history buff, here's a classic bbc expose of how Prescott Bush and the right wing planned a coup against FDR. Interesting insights on the intersection of big business, politics and media control.

The media is sneaky. They appear liberal, but they are owned by media moguls who have big business interests- and by big businesses themselves.

Posted by: Corruption Anon | August 20, 2008 4:08 PM | Report abuse


When the mainstream media gives as much coverage to the fact that McCain married into an organized crime family as it gave to snippets of two of Obama's ex-Pastor's speeches then you'll know that the media is of the people and for the people. But they were bought and sold a long time ago.
"“McCain’s personal fortune traces back to organized crime in Arizona.”

Posted by: Corruption Anon | August 20, 2008 4:03 PM | Report abuse

"noting that the loan payments were not predicated on matching funds, but on other campaign assets, like e-mail lists"

An email list is collateral for a loan?!?!


Posted by: Heather Dawn | August 20, 2008 3:47 PM | Report abuse

One thing I can agree with McCain's campaign about is that Obama does get more coverage. McCain breaking the law, or at least cheating the system should be (and should have been all along) bigger news. McCain should be covered more in general including his "gaffes" which are much more serious than the word gaffe implies and his "temper" which is a very relevant subject given the power he could hold to release his pent up anger in much bigger ways then he has in the past. Come on MSM, I know he is OLD and not pretty to look at but please give us some coverage of this guy.

Posted by: PJ | August 20, 2008 3:25 PM | Report abuse

Facts > Rumors.

Read my posts below.

Posted by: Tim | August 20, 2008 3:20 PM | Report abuse

Under Obama's Plan The Middle Of The Middle Class Would See Taxes Cut By $1,042 A Year; McCain's Tax Plan Would Give Them Only A $319 Tax Cut. According to the non partisan Tax Policy Center's computations, "under Mr. Obama's plan, the middle of the middle class, or those earning $37,595 to $66,354, would see taxes cut by $1,042 a year. Under Mr. McCain's plan, taxes for people in that category would also fall, but by $319; the largest chunk of the benefits would go to those making $2.8 million a year or more." [New York Times, 6/13/08]

Posted by: Tim | August 20, 2008 3:14 PM | Report abuse

Boston Globe: "McCain's Budget Figures Don't Add Up." Scot Lehigh wrote, "Fiction may require a willing suspension of disbelief, but presidential campaigns shouldn't. Yet here's the fanciful proposition John McCain wants us to swallow: that he can extend the Bush tax cuts, pile other tax breaks and revenue reductions atop them - and still balance the federal budget in four years... "I don't think there is any there there," declares Bob Bixby, executive director of the nonpartisan Concord Coalition, who says that in his attempt to portray himself as both a tax cutter and a deficit hawk, the Republican candidate is using "very vague numbers."..."It's preposterous," says Jim Horney, director of federal fiscal policy for the liberal Center on Budget and Policy Priorities. As a round-number illustration of the difficulty, Horney notes that $400 billion would be more than 80 percent of the amount projected for fiscal year 2013 domestic discretionary spending." [Scot Lehigh Op-Ed, Boston Globe, 7/11/08]

Posted by: Tim | August 20, 2008 3:12 PM | Report abuse

New York Times: McCain's Budget Will Add $150 to $250 Billion More To The Deficit Per Year Than the Obama Plan. "The Obama campaign claims it can pay for all this, and even reduce the deficit, through tax increases and spending cuts. I think a more skeptical look at its budget leaves you worried it may add something like $50 billion a year to the deficit. But applying the same arched brow to Mr. McCain's stated plans leaves you worried that he will add $200 billion or $300 billion or, depending on his voluntary tax system, even more." [New York Times, 6/18/08]

Posted by: Tim | August 20, 2008 3:10 PM | Report abuse

Politifact: McCain's Statement That Obama's Tax Plan Would Raise Taxes Is "False." Politifact reported, "So calling it a tax increase might not be considered fair. There's no disputing that taxes will rise, but the question of who's responsible for that tax increase is another matter entirely. At PolitiFact, we've concluded, as have others, that it's unfair to call Obama's plan a tax increase merely because it doesn't change existing tax law to keep rates low. We think about it this way: The reason taxes will increase is because of tax policy signed into law not by Obama, but by somebody else... the more recent data -- combined with the fact that Obama's proposal does not constitute a tax increase in the traditional sense, since some taxes would be lower under his plan than they would under current law -- persuades us to classify McCain's statement as False." [Politifact, 6/11/08]

Posted by: Tim | August 20, 2008 3:10 PM | Report abuse

Under Obama's Plan The Middle Of The Middle Class Would See Taxes Cut By $1,042 A Year; McCain's Tax Plan Would Give Them Only A $319 Tax Cut. According to the non partisan Tax Policy Center's computations, "under Mr. Obama's plan, the middle of the middle class, or those earning $37,595 to $66,354, would see taxes cut by $1,042 a year. Under Mr. McCain's plan, taxes for people in that category would also fall, but by $319; the largest chunk of the benefits would go to those making $2.8 million a year or more." [New York Times, 6/13/08]

Posted by: Tim | August 20, 2008 3:09 PM | Report abuse

Obama? I like him, my kind of man!



Posted by: Anonymous | August 20, 2008 2:26 PM | Report abuse


Posted by: JakeD | August 20, 2008 2:22 PM | Report abuse

Obama? I like him, my kind of man!

Posted by: Nikita Khrushchev | August 20, 2008 1:53 PM | Report abuse

LOL! I thought that Kennedy's father was Hitler's kind of man?

Posted by: JakeD | August 20, 2008 1:20 PM

That's Bush's grandpa you're thinking of.

"In 1933, Marine Corps Maj.-Gen. Smedley Butler was approached by a wealthy and secretive group of industrialists and bankers, including Prescott BUSH the current President's grandfather, who asked him to command a 500,000 strong rogue army of veterans that would help stage a coup to topple then President Franklin Delano Roosevelt."

Posted by: Anonymous | August 20, 2008 1:51 PM | Report abuse

Republicans have us at war in two countries as a result of Republican lies and deceptions, and we might be in two more wars--Iran and Pakistan--by November. We have alienated the entire Muslim world and most of the rest.

The dollar has lost 60% of its value against the euro, and the once mighty dollar is losing its reserve currency role.

The Republicans' policies have driven up the price of both oil and gold by 400%.

Inflation is in double digits. Employment is falling.

The Republican economy in the 21st century has been unable to create net new jobs for Americans except for low wage domestic services such as waitresses, bartenders, retail clerks and hospital orderlies.

Republican deregulation brought about fraud in mortgage lending and dangerous financial instruments which have collapsed the housing market, leaving a million or more homeowners facing foreclosure. The financial system is in disarray and might collapse from insolvency.

The trade and budget deficits have exploded. The US trade deficit is larger than the combined trade deficits of every deficit country in the world.

The US can no longer finance its wars or its own government and relies on foreign loans to function day to day. To pay for its consumption, the US sells its existing assets--companies, real estate, toll roads, whatever it can offer--to foreigners.

Republicans have run roughshod over the US Constitution, Congress, the courts and civil liberties. Republicans have made it perfectly clear that they believe that our civil liberties make us unsafe--precisely the opposite view of our Founding Fathers. Yet, Republicans regard themselves as the Patriotic Party.

The Republicans have violated the Nuremberg prohibitions against war crimes, and they have violated the Geneva Conventions against torture and abuse of prisoners. Republican disregard for human rights ranks with that of history's great tyrants.

The Republicans have put in place the foundation for a police state, which they have no problem using against fellow citizens!

We must get the Republicans totally out of power, or we will have no country left for any of us!

Posted by: Franky | August 20, 2008 1:49 PM | Report abuse

I will continue to support B. Husein Obama. I can tell you, you don't need to know nothin' to be in charge of stuff.

Posted by: Kwame Kirkpatrick (Indicted Mayor of Detroit) | August 20, 2008 1:38 PM | Report abuse

LOL! I thought that Kennedy's father was Hitler's kind of man?

Posted by: JakeD | August 20, 2008 1:20 PM | Report abuse

McCain? I like kind of man.

Posted by: Adolf Hitler | August 20, 2008 1:18 PM | Report abuse

The Republican's crime spree must be ended with the needed punishments.

Posted by: Anonymous | August 20, 2008 1:17 PM | Report abuse


I am an evangelical voter, and I will vote McCain-Romney.


David Mason indeed questioned the loan, but the matter will be decided by all the Commissioners, not just one. Also, the former chairman of the FEC, Michael Toner, opined that the McCain loan did not violate the law.

Posted by: JakeD | August 20, 2008 12:57 PM | Report abuse

I continue to support B. Husein Obama!

Posted by: Reverend Wright | August 20, 2008 12:43 PM | Report abuse

Posted by: Corruption Anon | August 20, 2008 12:36 PM | Report abuse

I continue to support B. Husein Obama!!!

Posted by: Ludicrous | August 20, 2008 12:31 PM | Report abuse


The time for action was in February, to make people aware of the issue and to put pressure on the situation, and then again last month to close the deal, when the FEC reconvened.

The mainstream media are either cowards or they have been bought off on this issue. Perhaps there is another explanation, but that's how I see it right now.

The media is in the tank for McCain on this huge issue, and because they are favoring Obama on a bunch of smaller things it creates the appearance that they are liberal and progressive and whatnot.

I bet if you follow the money from McCain's extended crime family - Hensley to Marley to Lansky to Bronfman - you'll find bigwigs in the MSM. Google those names.

Posted by: Corruption Anon | August 20, 2008 12:15 PM | Report abuse


The language of the loan was very clear: If he didn't raise enough money to pay back the loan, he would use federal matching funds to do so.

How is that not using the federal program to borrow money?

The guy cheated and the FEC and the MSM are standing by letting him get away with it. Gotta love this country...NOT!

Posted by: pedestrian | August 20, 2008 12:02 PM | Report abuse

Hey Mike,

Howard Dean has been making that point (ballot access) to anyone who'll listen but the FEC is political and the mainstream media appears to be too afraid (or too something) to bring this to the people in any sort of meaningful way.

Posted by: Corruption Anon | August 20, 2008 11:52 AM | Report abuse

McCain also used the promise of accepting federal money to qualify for the Ohio ballot. Other candidates who did not accept the public money had to obtain a sufficient number of signatures to qualify them for a ballot line, at a considerable cost. This does not come up in the DNC complaint to the FEC since Ohio law was violated, not federal law. But it should still be relevant to the discussion about a candidate who is willing to break campaign finance laws when it suits his needs.

Posted by: Mike | August 20, 2008 11:46 AM | Report abuse

Article found on the Washington Independent Website...
By Matthew Blake 06/03/2008
Throughout this presidential primary season, the Federal Election Commission, which polices spending on campaigns for Congress and the presidency, has been dormant. This has created a dilemma for Sen. John McCain (R-Ariz.), the presumed Republican nominee for president.

David Mason, the chairman of the FEC and a Republican, had questioned whether McCain could opt out of public funding for the presidential primary after using the promise of public money to get a loan. Mason, though, is but one of two current commissioners for a federal government panel that's supposed to have six members-- three Democrats and three Republicans-- and requires the approval of four commissioners to issue rulings or allot money to candidates. Without a commission ruling, McCain has proceeded to spend $80 million -- about $30 million more than allowed for candidates on public money.

McCain has a second FEC issue. While he opted out of federal financing for the primary season, he is expecting to take advantage of public funding for the general election. So he needs a working commission to sign off on providing his general election money.

A flurry of FEC-related activity in the past two weeks now suggests that McCain's dilemma is about to be solved. President George W. Bush has nominated enough commissioners to get create a working six-member FEC. But Mason is not one of them.

The president replaced him with three Republican nominees -- none of whom have questioned McCain's loan. One is the ethics lawyer of former House Majority Leader Tom Delay, who faced indictment while in office. Another is a former Republican National Committee lawyer. The third is a staffer on the Senate rules committee, the very committee that approves FEC commissioners.

One might expect Democrats to complain about three Republican nominees that together could provide a tidy solution to McCain's campaign finance problems. But the Senate majority leaders aren't raising objections. "Don't worry about David Mason, that's in the past," Jim Manley, spokesman for Sen. Harry Reid (D-Nev.), the Senate majority leader, told The Washington Independent. "We're working hard to get the FEC up and running."

Democrat's satisfaction with the White House's nominees may be because the two Democrat nominees look equally disinclined to investigate one of their own. One, in fact, was Reid's personal lawyer.

So if the FEC does return to business, the government watchdog will continue its tradition of commissioners with strongly partisan ties. The president, with Congress, seem to have again ensured that during an election year the FEC probably won't bite McCain, or any politician.

"The nominees coming in are very closely aligned with either the Democrats or Republicans," said Scott Thomas, a Democratic FEC commissioner between 1986-2006. "Their decision-making may focus more on party interests."

Many experts say that Congress appointing commissioners who won't cross party lines is the nature of the FEC. "It's a pretty much unchallenged idea that each of the parties gets to pick its nominees," said Rick Hasen, a law professor at Loyola University in Los Angeles, who specializes in election law. Three Democrats and three Republicans, Hasen says, ensures that "there will be deadlocks when things are controversial."

But the FEC has been unable to make any rulings since December. That's when Bush's recess appointments expired, leaving the agency with only two commissioners -- Mason and a Democrat, Ellen Weintraub, a legal ethics expert. Lacking a quorum, the panel has been unable to act throughout this election season. "We've taken a step back and looked at long-term projects," Weintraub told The Washington Independent. "But it's been awkward."

Appointing the commissioners needed for a quorum was held up by the White House's nomination of Hans von Spakovsky, a Georgia Republican. Senate Democrats refused to confirm von Spakovsky. His nomination was stopped not because of his record on campaign finance, but because of his work at the Justice Dept., where labor and civil rights groups accused him of seeking to disenfranchise minority, poor and elderly voters.

So when Bush nominated three FEC commissioners in early May, it wasn't considered notable. After all, Sen. Mitch McConnell (R-Ky.), the top Senate Republican, had said he would only vote on commission nominees as a package -- following the White House lead to get von Spakovsky's appointment through as part of a group. Reid, however, vowed that Senate Democrats would not consider any nominee package that included von Spakovsky.

But the calculus changed a week later, when von Spakovsky suddenly withdrew. Before the Memorial Day recess, the Senate rules committees approved Bush's three nominees -- Democrat Cynthia L. Bauerly of Minnesota and two Republicans, Caroline C. Hunter of Florida and Donald F. McGahn from Washington. The full Senate will now consider the three nominees, plus Steven Walther, a Nevada Democrat whom the rules committee had already approved.

Bauerly is the legislative director for Sen. Charles Schumer (D-N.Y.), who served as head of the Senatorial Campaign Committee, where he helped orchestrate the Democratic take-over of the Senate in 2006. Hunter, meanwhile, was former deputy counsel of the Republican National Committee from 2001-2005.

McGahn was the ethics lawyer of former House Majority Leader Tom DeLay (R-Tx.), who resigned in an ethics scandal. Walther has served as Reid's private attorney.

Weintraub defends the highly partisan make-up of the four nominees who may join her at FEC. "If you're looking for people with the most experience in election law," she said, "you're going to find them defending these high-profile clients."

The nominees, however, will not be joining David Mason. FEC commissioners serve seven-year terms and Mason's was set to expire. Bush had originally re-nominated Mason. But when the president's nominations for Republican FEC commissioners were announced in May, Mason had suddenly been replaced by Hunter and McGahn.

Following von Spakovsky's withdrawal, the president again had an opportunity to re-nominate Mason as the third Republican. But right before the Memorial Day recess he chose as the sixth, and final commissioner, Matthew Peterson, a Republican staffer on the Senate rules committee. Peterson's nomination will now come before that very committee. "When you pick someone from a Senate staff," said Hasen, the Loyola law professor who keeps an election law blog. "It's a courtesy that they'll be approved."

So Mason looks to be out after 10 years as an FEC commissioner. He arrived at the FEC in 1998 with a partisan history himself, having worked for former Senate Majority Leader Trent Lott (R-Ms.), when Lott was House minority whip. But Mason soon started taking actions not in line with the normally partisan commissioners.

"Mason strayed from the reservation one times too many," said Hasen. "The McCain letter was the straw that broke the camel's back."

Mason wrote a letter to McCain in February, saying that a candidate can't use the public funds program as "security for private financing." Mason's inquiry was related to the fund-raising travails last year of McCain's presidential campaign. In December, the McCain campaign, reportedly used the promise of public financing as collateral for a million-dollar loan. McCain then opted out of public funds after a series of victories, that, under the GOP's winner-take-all primary rules, virtually guaranteed him the nomination.

"It's a reasonable claim that McCain trapped himself in the public financing system," said Bradley Smith, a Republican commissioner on the FEC between 2000-2004.

Mason declined a request for an interview. Trevor Potter, counsel for McCain and a former FEC chairman himself, posted on Hasen's election law blog that Mason writing a letter to McCain is not tantamount to accusing him of violating campaign finance laws.

Weintraub described as a Mason as a highly respected colleague. She declined to comment on his departure.

A reconstituted FEC is not likely to find McCain in violation of campaign finance law. But they are expected to give the candidate an $84 million dollar grant for entering the public finance system in the general election. McCain, co-sponsor with Sen. Russ Feingold (D-Wis.) of the 2002 Campaign Finance Reform Act and a longtime advocate of publicly financed campaigns, has made a point of saying he will use public money in the general election. He has even pressured Sen. Barack Obama (D-Il.), the likely Democratic nominee who has raised three times more money than McCain, to honor a campaign pledge and also apply for public funds.

"No FEC would have been awkward situation for McCain," said Smith, now a law professor at Capital University in Ohio. "Now they'll be able to release the money."

Neither party seems inclined to have the FEC do much rule-making -- beyond providing money for McCain and other national candidates seeking public funds. "It's unconscionable that we've had no FEC during the presidential election process," says Kenneth Gross, a campaign finance lawyer with Skadden, Arps. "It's been a clear signal to the regulatory community what Congress and the president think about the commission."

" the candidate does not speak for the camapign"...

Posted by: AlexP1 | August 20, 2008 11:31 AM | Report abuse

It is just typical that the mainstream media has not weighed in on this issue. McCain is guilty as sin on this one. And the Republican lawyers at the FEC, and Tom DeLay's boy who chairs the FEC, have has old miserable back.

McCain also used the matching system to get on the ballot in various states. He used it, then kicked it to the curb, violating the agreement. A familiar pattern with McCain.

Editorials and Opinion pieces at the NYT and WaPo have been written about MUCH less.

Why not weigh in on it? Afraid to speak up for what's right? Worried that history will judge you cowards if you go on the record as endorsing McCain's dodgy move?

This issue has had a material impact on the election, and you people have been virtually silent. What is up with that?

Posted by: Corruption Anon | August 20, 2008 11:20 AM | Report abuse

If McCain picks Romney watch that little lead he has disappear. Romney will Hurt McCain the evengelicals and christian base of the Party will turn and Run. Put Huckabee on the ticket and get the Base excited all ready, Then you can win this thing.
No one is going to "Not" vote for McCain if he picks Huckabee., If he Picks Romney There will be a ton of People that Wont Vote for McCain. Whats really going on is Romney belongs to the RNC. The RNC wants to make sure that they stay in power. By putting bush 4 in office ie (Romney) after McCains term is over. The RNC dont like Huckabee because he is more for the working class. That is blasphemy in the GOP. Y McCain will lose if he picks Romney I guess someone is making a movie about Obama's teenage years.

Posted by: Peter | August 20, 2008 10:51 AM | Report abuse

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