
There’s nothing like the Beltway Pontificators Society (aka corporate media) when it come to creating mountains out of political mole hills, and few examples could be more illustrative than the “flip-flop” narrative about Senator Barack Obama and publicly financed presidential campaigns. The story also illustrates how few reporters, not only in
Nevada but across the country, are willing to research original sources before drafting articles and posts.
The controversy appears to have its source in the Midwest Democracy Network’s 2007 survey sent to both Republican and Democratic Party candidates, and specifically refers to section one.
The so-called promise occurs in response to Question 1-B: If you are nominated for President in 2008 and your major opponents agree to forgo private funding in the general election campaign, will you participate in the presidential public financing system? Senator Clinton, Governor Huckabee, Senator McCain, and Representative Paul gave no responses.
Senator Obama, responded: “In February 2007, I proposed a novel way to preserve the strength of the public financing system in the 2008 election. My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election. My proposal followed announcements by some presidential candidates that they would forgo public financing so they could raise unlimited funds in the general election. The Federal Election Commission ruled the proposal legal, and Senator John McCain (R-AZ) 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.” (emphasis added)
There’s more than nuance here, what Senator Obama pledged to do was “pursue an agreement…to preserve a publicly financed election.” As in the case of the misinterpretation of Gertrude Stein’s comment about Oakland, CA “there is no there there,” Obama’s pledge to treat with the McCain campaign about public financing does not equate to a promise to accept the limitations of the system should Senator McCain opt out of it. Senator Obama amended this declaration to include an agreement with Senator McCain to damp down the activities of independent 527 organizations. [NYT] There were ample signals from the McCain campaign camp that the Arizona Senator had little intention of interfering with the 527s or of remaining in the public system if his campaign did well during the primaries.
One of the first signals came in the form of loans to the McCain Campaign from Fidelity and Trust Bank. McCain was engaged in securing loans carefully crafted to both use and possibly dismiss the public financing system. The terms of a second loan were remarkable:
“Borrower and lender [Fidelity & Trust Bank] agree that if Borrower [McCain's campaign committee] 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.” [AmPrpt] [original document]
Ezra Klein summarized the ramifications of this agreement: “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.” [AmPrpt] (emphasis added)
Paul Kiel’s summary was more succinct: “John McCain's campaign struck a canny deal with a bank in December. If his campaign tanked, public funds would be there to bail him out. But if he emerged as the nominee, there'd be no need for public financing, since the contributions would come flowing.” [TPM]
The second signal came during the primary campaign season, as the Seattle PI printed, “McCain and Obama both declined public financing in the primary contests, thus avoiding the spending limits that come with the money. McCain had initially applied for the money, however, and has been in a dispute with the Federal Election Commission over whether he needed its approval to decline the funds. The FEC insists that he does, but has not had a quorum to act because four of its six seats have been vacant pending Senate confirmation of presidential nominees. McCain lawyers have disputed the need for FEC approval.” In short, not only did the McCain campaign game the system with the Fidelity and Trust loan provisions, it forswore public financing during the primary season – doing so in part because there was no way the FEC could enforce the provisions.
Not too much analysis is required to deduce from this picture that the McCain campaign was all for public financing to bail out its operations in December 2007, and not above declining the public funds [original letter] during the primary season when fund-raising did, in fact pick up, and he could go forward without accepting them.
In order to claim that Senator Obama was the one to have flipped on the publicly funded campaign agreement, the McCain campaign must assert propositions that don’t hold under much scrutiny.
First, McCain had to declare that there had been a promise in the first place. Because few reporters referred back to the original survey declaration, this narrative was picked up – including commentary from progressive pundits like Bill Press, and reporters like ABC’s George Stephanopolos.
Secondly, McCain had to emphasize that he was “the reformer” who was going to accept public funding. If there were a reversal in this ruckus this was it – a candidate who had drafted a carefully worded loan to keep his efforts alive using public funds as collateral reversed his pledge during the primaries, only to re-assert it during the general election season. These actions make McCain’s commentary somewhat less than credible: “Senator Obama’s reversal on public financing is one of a number of reversals that he has taken,” Mr. McCain said in Columbus Junction, Iowa, where he had been touring the floods. “I’m especially disturbed by this decision of Senator Obama’s because he signed his name on a piece of paper, signed his name. This election is about a lot of things but it’s also about trust,” he said. “It’s also about whether you can take people’s word.” [NYT] McCain appears to be suggesting that we forget the part where he accepted public funding, opted out of it, and then opted back in again.
Thirdly, once apprised of the initial declaration in the Midwest Survey, the McCain campaign asserted the Obama camp had not “aggressively pursued” negotiations on the subject. This sounds rather like an argument predicated on “You said you’d call me first,” as opposed to a defense founded on any efforts by the McCain camp to initiate contact. The question why the Obama Campaign would “aggressively” or otherwise seek to negotiate on campaign funding sources with an opponent who had already opted out of the public funding system during the primaries remains unanswered.
The McCain Campaign made its announcement that it would accept public financing on June 19, 2008. [NYT] The Obama Campaign announced it was opting out on the same day. [NYT]
The tempest in the teapot continues. Those disinclined to support Senator Obama in the first place may see, if they wish, a reversal from supporting public financing. However, those in the McCain camp may wish to allow the issue to quiet down considerably before too many more people become aware of their candidate’s double-reverse back flip maneuver on the subject.