Democrats: McCain financing questionable

April 13, 2008 7:41:55 PM PDT
Democratic Party officials want a federal judge to order an investigation into whether Sen. John McCain violated election laws by withdrawing from public financing, saying federal regulators are too weak to act on their own. A lawsuit against the Federal Election Commission, to be filed Monday in U.S. District Court, questions the agency's ability to enforce the law and review McCain's decision to opt out of the system. The Republican presidential candidate, who had been entitled to $5.8 million in federal funds for the primary campaign, decided earlier this year to give up that money so he could avoid strict spending limits between now and the GOP's national convention in September.

During a conference call with reporters Sunday, DNC officials said the FEC is unable to act because four of its six seats are vacant. They want a judge to either order the FEC to begin an immediate review, or allow the Democratic Party to file a lawsuit against McCain's campaign challenging his decision.

Tom McMahon, the party's executive director, said "there is a compelling public interest in determining whether Senator McCain agreed to participate in the matching funds program so he could get a loan for his campaign, then violated the terms of that agreement so he could ignore the spending cap and raise unlimited money from lobbyists and special interests."

The DNC is seeking civil fines or an order barring McCain from exceeding spending limits, said DNC general counsel Joe Sandler.

The Republican National Committee described the lawsuit as "total nonsense."

"It is now clear that the trial-lawyer Democrats' idea of campaigning for president is to hire lawyers and file frivolous lawsuits," said spokesman Alex Conant.

Democrats filed an initial complaint with the FEC in February, asking it to investigate. Under federal rules, the party typically must wait 120 days before filing a lawsuit. But party officials said they were taking action before the deadline given the FEC's weakened status. The FEC has 60 days to respond to the lawsuit.

"It has only been 49 days since the DNC's initial meritless complaint to the commission was filed, and thus we expect this lawsuit to be thrown out at the first opportunity," Conant said.

Part of the dispute centers on a $4 million loan McCain obtained late last year. The loan was not directly secured by his potential access to public funds. But his agreement with the bank required him to reapply for public funds if he lost early primary contests and to use that money as collateral.

FEC Chairman David Mason has said McCain can only withdraw from public financing if he answers questions about the loan and gets the agency's permission. But the FEC has no quorum, in part due to disagreement between President Bush and the Democratic-controlled Senate over possible nominees.

McCain's lawyer, former FEC Chairman Trevor Potter, has said McCain did not encumber any money he would have received from the federal treasury. McCain and Potter have said he was entitled to withdraw without FEC approval and have cited as examples Democrat Howard Dean - now the party chairman - who withdrew from public financing during the 2004 presidential primaries.

DNC officials have said Dean, unlike McCain, did not have a loan that raised questions about his use of potential public funds.


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