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Today's Must Read
This 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.
Josh
Zachary
At the end of this NY Times article:
"Mr. McCain said that the relationship was not romantic and that he never showed favoritism to Ms. Iseman or her clients. "I have never betrayed the public trust by doing anything like that," he said. He made the statements in a call to Bill Keller, the executive editor of The New York Times, to complain about the paper’s inquiries... "
How much did he beg Keller not to run the story? I would have loved to hear that conversation; not to mention that this too has to be a ridiculous ethical breach.
http://www.nytimes.com/2008/02/21/us/politics/21mccain.html?pagewanted=1&_r=2&hp&adxnnlx=1203559231-sx0ZzFtC7tXTqAuqXxp%20tw
"
February 21, 2008 10:12 AM | Reply | Permalink
Here is the gist of it from the American Prospect:
Full article:
http://www.prospect.org/csnc/blogs/tapped_archive?month=02&year=2008&base_name=the_pete_rose_of_politics
February 21, 2008 10:38 AM | Reply | Permalink
Like a gift from a lover: In a tidy little package with a tiny little bow!
Although I guess the distinguished gentleman from Arizona might blanche at me comparing this to a gift from a lover...
February 21, 2008 10:47 AM | Reply | Permalink
Too funny. The straight talk express keeps chugging along.
February 21, 2008 11:05 AM | Reply | Permalink
The only downside for McCain in this deal was publicity. And it's probably not clear enough to resonate with folks for long.
February 21, 2008 11:25 AM | Reply | Permalink
How opportune that McCain borrowed money by signing up for public funding as collateral; it’s a win/win for the campaign. The FEC is effectively shut down and if by some miracle the Senate approves Bush’s nominees, they’d ok the deal. So McCain will opt out of pubic funding with no consequences or worst case a slap on the wrist.
February 21, 2008 11:41 AM | Reply | Permalink
This may be the obvious comment, but isn't it a bit sleazy that McCain was willing to continue campaigning "actively" on the government's dime even if his campaign was effectively over? Yes, maybe he feels that Obama is "ingenuine", but this seems a worse offense. This sounds to me like backing a loan on a house with "If I can't get a job, I'll apply for welfare, unemployment, and food stamps to pay the mortgage." That sounds a bit contrary to being Republican, right?
February 21, 2008 12:18 PM | Reply | Permalink
If this financing scheme works for a US Senator from Arizona, it should work for an average Joe. I think this a great way to finance things. How about if I apply for a big mortgage, and promise to pay with my winnings from the lottery, if I win? If I don't win the lottery, I still get to keep the money. The Lincoln Savings and Loan Association might be a good place to apply. I heard its President, Charles H. Keating Jr.m is nice guy and knows John McCain personally.
February 21, 2008 1:33 PM | Reply | Permalink
I think McCain is already past the 54 million cap.
As of Jan 31, he had spent:
49,650,185.36
He spent over 10 million of that in January so the odds of him not already spending 4 million this month are slim to none.
I'm sure the politics and usual atmosphere in Washington will let McCain weasel past the law as easily as he has in the Indiana">http://www.dailykos.com/storyonly/2008/2/21/02516/2731>Indiana Ballot Fiasco
February 21, 2008 2:09 PM | Reply | Permalink
Clearly I screwed up in my HTML tags in that last post. This site needs a preview button!!
Let's try again:
I think McCain is already past the 54 million cap.
As of Jan 31, he had spent:
49,650,185.36
He spent over 10 million of that in January so the odds of him not already spending 4 million this month are slim to none.
I'm sure the politics and usual atmosphere in Washington will let McCain weasel past the law as easily as he has in the Indiana Ballot Fiasco
February 21, 2008 2:18 PM | Reply | Permalink
If this gets out into the MSM, McCain will never be able to use the public financing angle against Obama (and it's questionable whether that would have worked anyway - they already reported that Obama's agreement in March 2007 was only to INVESTIGATE the legality of such an agreement).
But it'll do worse. It'll point directly to McCain's credibility, and EVERYTHING he says against Obama will be suspect.
Oh, how I bet he wishes he didn't take that loan now..
February 21, 2008 2:42 PM | Reply | Permalink
OK, I give up. TPM sucks at putting in more than one hyperlink tag.
So maybe just typing in the URLs will work.
http://query.nictusa.com/cgi-bin/dcdev/forms/C00430470/323451/
http://www.dailykos.com/storyonly/2008/2/21/02516/2731
February 21, 2008 3:19 PM | Reply | Permalink
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.
Wait, not so fast. What about this, from the letter?
"Accordingly, we consider your letter as a request that the Commission withdraw its previous certifications. Just as 2 USC 437c(c) required an affirmative vote of four Commissioners to make these certifications, it requires an affirmative vote of four commissioners to withdraw them. Therefore, the Commission will consider your request at such time as it has a quorum."
...does this mean that until the FEC meets again, McCain is still in the public financing system?
February 21, 2008 4:53 PM | Reply | Permalink
To try to get a perspective on it, it looks like he didn't have an affair with Iseman, even if he seemed closer to her personally than a senator should to a lobbyist, or a married man to another woman. It looks his aides headed off such a relationship. It odes look like he did a favor for her employer's client, and it's troubling that a senator will take that much trouble for the commercial interests of one company, especially when it has nothing to do with his state. One the one hand it's inappropriate, but on the other hand it isn't quite Don Young territory unless he did more of these kinds of favors.
February 21, 2008 4:53 PM | Reply | Permalink
Forget about the details, they're revealing but too dense to make an impact. Best to stick with an "opt-in/opt-out" flip flop arguement.
It's difficult for Obama to follow McCain's rules when they seem to change so frequently.
February 21, 2008 4:56 PM | Reply | Permalink
We need John McCain and one campaign staffer (presumably female) …
For a special appearance before the Federal Elections Commission.
February 21, 2008 5:21 PM | Reply | Permalink
He was against torture until he was for it. He was for campaign finance rules before he was against them.
I do hope Obama is cataloguing the video tapes of McCain's contradictions, by topic. They will make such compelling ads. They could title them "Straight Talk, McCain Style".
February 21, 2008 6:41 PM | Reply | Permalink
The Big Question:
Why did McCain risk violating public finance laws for a measly $4 million dollars?
Measly? Yes, to Cindy McCain $4 million is measly. As best I can gather, McCain's wife is worth at least 100 million dollars, probably a lot more.
She was the sole heir to her parent's fortune and is now the controlling share holder of the 3rd largest Anheuser-Busch distributor in the US, privately held Hensley & Company.. A company that did more than 160 million dollars worth of business in 2002, and has been doing over 100 million per year since the '80s. And since the company has been in business since the 1950's, they probably have significant real-estate holdings. What's the company worth? My wild-ass guess, one quarter to one half billion dollars.
So if his wife is worth hundreds of millions, why the heck was McCain playing risky financial games for measly 4 mil?
Had Cindy lost faith in John's presidential aspirations? Were they having a tough time personally?
It would be interesting to see the Senator's answer to this question.
http://www.azcentral.com/news/election/special3/articles/0123biz-hensley.html?&wired
http://www.referenceforbusiness.com/history2/87/Hensley-Company.html
February 22, 2008 2:44 AM | Reply | Permalink
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February 22, 2008 9:10 PM | Reply | Permalink