I can't get too bothered about the Obama-borrowing-phrases-from-Gov. Deval Patrick scandal—I have this mental image of the Clinton campaign as an army running out of cannonballs, stuffing silverware into the guns and lighting them with their last box of tinder. But it seems like that controversy pushed aside the controversy of Obama reneging on a promise to take public financing if John McCain did the same.
It started a year ago when Robert Bauer—an Obama legal advisor who I interviewed last year—proposed this to the FEC, in a request to raise private funds for the general election while leaving open the public funding option.
Senator Obama, fully committed to competition on the same terms as all other candidates, has decided that, if he becomes a candidate, he will also instruct his campaign to proceed with active fundraising for the general election. But the Senator would not, if the law allows, rule out the possibility of a publicly funded campaign if both major parties' nominees eventually decide, or even agree, on this course. Should both major party nominees elect to receive public funding, this would preserve the public financing system, now in danger of collapse, and facilitate the conduct of campaigns freed from any dependence on private fundraising.
The intent was pretty clear: Stroke the FEC and hope the endorphins drifted over to newspaper editorial boards. And it worked! In April, McCain, not yet in meltdown but already underperforming financially, said he'd take public funds if Obama did. And of course, since then, Obama has been raking in Croeses-level riches while McCain spent a few months getting out-fundraised by better than two to one by Ron Paul. Obama's campaign started murmuring this month about not taking public campaign funds: McCain slammed him.
"We have a candidate who is quite serious about taking public funds if Obama does," Mark Salter, a senior adviser to Mr. McCain, said Thursday. "It's not a game to McCain." Mr. Obama, Mr. Salter said, "gave his word, and he either places value on that or he's just fooling voters."
But as liberal CFR guru Mark Schmitt shows, McCain reneged on public funds for the primary (saying he wouldn't take them, then saying he would) then actually taking out a loan with the promissary funds as collateral. (McCain never ended up taking the funds.) It's incredibly twisty.
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?
Both candidates were playing games: McCain's game-playing was, to my mind, even worse. Especially because he's relocated his inner saint and is calling for both him and Obama to plunge back into the public trough.