• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

That Straight talking McCain

fff

Well-known member
BETTING THE SPREAD.

We now have the exact language of John McCain's "second loan," and it is a legal masterpiece, albeit an ethical travesty. Based on the Washington Post report, I inferred that McCain had not excluded public matching funds from the collateral for his additional loan. But it's much more complex than that. The second loan, for $1 million, was actually a modification of the first, and so it continued to exclude the certification for matching funds from the loan's collateral. But it included this remarkable addition (which I'm going to quote in full just so no one thinks I used an ellipsis to distort the meaning):

Additional Requirement. Borrower and lender agree that if Borrower [McCain's campaign commitee] withdraws from the public matching funds program, but John McCain then does not win the next primary or caucus in which he is active (which can be any primary or caucus held the same day) or does not place at least within 10 percentage points of the winner of that primary or caucus, Borrower will cause John McCain to remain an active political candidate and Borrower will, within thirty (3) days of said primary or caucus (i) reapply for public matching funds, (ii) grant to Lender, as additional collateral for the Loan, a first priority perfected security interest in and to all Borrower's right, title and interest in and to the public matching funds program, and (iii) execute and deliver to Lender such documents, instruments and agreements as Lender may require with respect to the foregoing.

(Here's the document: http://query.nictusa.com/cgi-bin/fecimg/?_28039612468+0. From this link, you can read the document by page or produce a pdf. Much of it is blurry and boilerplate, until you get to the loan modification agreement starting page 21, which is legible.)

What does this mean? It means that rather than pledge his existing certification for matching funds as collateral for the loan, which would bind him to the system and thus the spending limits, McCain carefully pledged to seek to re-enter the system later, and to use a non-existent future certification as collateral. And while the system is "voluntary," McCain essentially traded away for cash his right to choose whether to participate in the system, and even his right to drop out of the presidential race, allowing the bank to force McCain "to remain an active candidate" in order to reapply for and qualify for funds. He was betting the spread (10 points) on his own primary performance! I don't think it's an exaggeration to say this is a promise to perpetuate a fraud on the American taxpayers: if he no longer intended to seek the presidency, he made a legally-binding promise to pretend to remain in the race just long enough to collect public money to repay the loan.

Is this illegal? Who knows. Note that it took several days of discussion among top lawyers and former FEC commissioners to figure out whether it was even possible to opt out of the public financing system after opting in and qualifying for funds. No one's ever done that. And therefore, no one's ever opted back in, after opting out, after opting in. And therefore, no one's ever borrowed on the basis of a promise to opt back in, after opting out, after opting in. Is your head exploding yet?

What we know is that McCain found a way to use the public funds as an insurance policy: If he did poorly, he would use public funds to pay off his loans. If he did well, he would have the advantage of unlimited spending.

There's a reason no one's ever done anything like this. It makes a travesty of the choice inherent in voluntary public financing, between public funds and unlimited spending. I've said it before, and I'll say it again: Legal or not, it should bring to an end whatever tiny thread of credibility John McCain still has as a straight-talker or reformer of the political process.

-- Mark Schmitt

http://www.prospect.org/csnc/blogs/tapped_archive?month=02&year=2008&base_name=the_pete_rose_of_politics
 

Mike

Well-known member
Obama Camp Hedges On Taking Public Funds
Democrat Has Said He Would Accept Federal Money If GOP Opponent Does, Despite Fundraising Prowess
DAYTON, Ohio, Feb. 15, 2008

(AP) If Sen. Barack Obama becomes the Democratic nominee, he faces a financial dilemma: Use his vaunted fundraising operation for the general election or limit himself by accepting public funds.

Last year, Obama indicated he would accept public funds if his Republican opponent did as well. On Thursday, however, his spokesman hedged, and campaign finance watchdog groups are ready to pounce.

Based on past statements, Obama and Republican presidential candidate John McCain have indicated that if each was nominated, a spending and fundraising armistice was possible.

"If Senator Obama is the nominee, he will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election," Obama spokesman Bill Burton said last March. Obama affirmed the position in a questionnaire last November.

Similarly, then McCain campaign manager Terry Nelson said at the time: "Should John McCain win the Republican nomination, we will agree to accept public financing in the general election if the Democratic nominee agrees to do the same."

Those conditional commitments came after Obama asked the Federal Election Commission whether he could raise general election money during 2007 but return it if he chose to accept the public funds.

The issue resurfaced this month when McCain emerged as the likely Republican nominee and as Obama and Hillary Rodham Clinton jostled for the lead in the Democratic contest.

McCain advisers have said in recent days that he would abide by his proposal.

But on Thursday, Burton said any speculation about what Obama will do is premature.

"This is a question we will focus on directly if he is the nominee," he said. "It was something that we pursued with the FEC and it was an option that we wanted on the table and is on the table."

Asked if the campaign's earlier position amounted to a pledge, Burton said: "No, there is no pledge."

McCain admonished Obama for hedging on whether he would accept public funding.

"I made the commitment to the American people that if I were the nominee of my party, I would accept public financing," McCain said Friday in Oshkosh, Wis. "I expect Senator Obama to keep his word to the American people as well. This is all about a commitment that we made to the American people.

"I am going to keep my commitment," he said. "The American people have every reason to expect him to keep his commitment."

McCain said that if Obama becomes the nominee and decides against taking public money, he might do the same.

"If Senator Obama goes back on his commitment to the American people, then obviously we'd have to rethink our position," McCain said. "Our whole agreement was that we would take public financing if he made that commitment as well. And he signed a piece of paper, I'm told, that made that commitment."

Fred Wertheimer, president of the advocacy group Democracy 21, said he and others who want to curtail the role of money in politics intend to step up their pressure on Obama to accept public money if he is the Democratic nominee.

"We expect Senator Obama to meet the public commitment he made and to agree to use public financing in the general election if he is nominated and his major party opponent agrees to do the same," Wertheimer said.


In response to a questionnaire in November from the Midwest Democracy Network, a group of nonpartisan government oversight groups, Obama said: "Senator John McCain has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."

Candidates who accept public funds would be eligible for about $85 million in public money. The funds come from a presidential financing program paid for with a $3 checkoff on tax returns.

While presidential candidates have rejected public financing in primaries, no major party candidate has bypassed the system in the general election since the program was created in the wake of the Watergate scandal in the 1970s.

This time, however, McCain, Obama and Clinton have raised money for the general election. Clinton has raised the most, $19.5 million, and has made no commitment to take public financing.

Obama has raised $6.1 million and McCain has raised $2.2 million for the general. If they take public funds, they would have to return the money they raised.

If McCain and Obama agree to take the federal money and forgo fundraising, McCain would be a clear beneficiary since Obama has proven himself as a multimillion-dollar fundraiser. His campaign raised a whopping $32 million for the primary in January alone.

Still, the national parties and outside groups are also gearing up to play a role in the fall campaign.


© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
 

fff

Well-known member
Obama never said he'd take public financing. He never actually applied and was approved for it as was John McCain. Old straight talking McCain, reformist that he is, applied, was approved, then said he'd withdraw from public financing (there's no mechanism in the public financing law that McCain helped write for withdrawing after one has opted in).

In this case, McCain has promised his creditors that if he lost the primaries and knew he wouldn't be elected, he would stay in the race at the taxpayer's expense to pay back his loans. My, my, who'd ever have thunk it? Those Republicans! :lol: :lol:
 

Latest posts

Top