FEC Impasse Threatens To Undermine McCain & Obama

26 Feb 2008 // A fight over whether Sen. John McCain, R-Ariz., can reject federal funds for his presidential campaign has thrown new attention on a stalemate hamstringing the Federal Election Commission and given unexpected attention to the role of McCain's possible election opponent, Sen. Barack Obama, D-Ill., in that impasse.

The situation presents problems for both McCain, whom Democrats are accusing of defying the same campaign finance regulations he has championed, and Obama, who is seeing a hold he placed on an FEC nominee used in a bid to undermine his claims of working in a bipartisan manner.

McCain's problem, meanwhile, is generating calls for the White House or Senate Democrats to blink in their battle over FEC nominees.

"When you talk about the FEC, people's eyes glaze over.... But there will be increasing public pressure to do something as more and more people understand" the situation, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. Her group called Friday for Republicans to compromise to end the standoff.

Struggling with his fundraising last year, McCain applied for federal campaign matching funds. Under the program, the FEC matches individual contributions up to $250, but the candidate must commit to a spending limit -- $54 million this year -- until the his party's national convention.

But after his fortunes reversed, McCain -- now the presumptive Republican candidate for the White House -- told the FEC he would opt out of public funding, citing rules letting candidates pull out before they receive any payments.

In a letter last Thursday, FEC Chairman David Mason said he interpreted McCain's letter as a request. And Mason said the agency could not act until it learns more about whether McCain used the expectation of federal funding as collateral for a $1 million loan for his campaign -- action that would commit McCain to the spending cap.

Mason also cited a statute that says candidates certified for matching funds can only withdraw from the program with the "vote of four commissioners" on the six-member panel.

The FEC now has just two members due to a standoff begun when Obama and Sen. Russell Feingold, D-Wis., put holds on the nomination of Commissioner Hans von Spakovsky due to concerns about von Spakovsky's voting rights record while he was at the Justice Department.

With Senate Majority Leader Harry Reid not allowing a vote on von Spakovsky -- whose recess appointment already has expired -- Minority Leader Mitch McConnell has blocked votes on other commissioners. President Bush has refused to withdraw the nomination.

The impasse has left the FEC unable to vote or issue anything more than guidance this year.

Under Mason's interpretation, McCain would be unable to opt out of public financing until the FEC returns to full strength. That gives McCain the choice of running at a financial disadvantage to the Democratic candidates or opting out and risking fines from the FEC and possible damage to his reputation.

McCain has said he can opt out because he regards the FEC letter as nonbinding.

Analysts said McCain is sure to push ahead. "Regardless of all the legal maneuvering, the bottom line is that Sen. McCain is going to blow through the spending limits and take his chances with the FEC down the road," former FEC Chairman Bradley Smith wrote in an analysis distributed Sunday by the Center for Competitive Politics. "To do otherwise would ... be electoral suicide."

But the move has political consequences for McCain due to his long association with the campaign finance reform laws he co-authored with Feingold. On Monday, the Democratic National Committee filed a complaint against McCain with the FEC and blasted him for hypocrisy.

Obama, meanwhile, also faces pressure. Smith noted Obama "can be accused of using his Senate position to lock up the FEC to the detriment of his likely general election opponent."

In an editorial Monday, the Wall Street Journal observed that if Obama is "promising to end partisanship in Washington... here's a place to start: He could stop playing politics with the [FEC] in a way that could hamper John McCain's campaign against, well, Mr. Obama."

Obama's Senate office did not respond to calls for comment Monday.