Sen. John McCain can expect a ruling on the legality of his decision to pull out of the public-financing system for the Republican presidential primaries, now that the Senate has broken a political logjam and confirmed a bipartisan slate of five nominees to the six-member Federal Election Commission.
The panel had been inactive since January because it lacked a quorum to vote on a thicket of cases, also including Mr. McCain’s request for $85 million in public financing for the presidential election. The confirmation vote late Tuesday puts three new Republicans and two new Democrats on the board that regulates and rules on all federal election and campaign finance laws.
“It means they will have to quickly get back to work on a very full agenda of a backlog of cases before them, from advisory opinion requests from candidates to whether Sen. Chris Dodd can use some of his presidential campaign money for his re-election,” election law attorney Jan Baran said Wednesday.
The FEC faces overdue rulemaking on the disclosure of fundraising “bundlers” under the new lobbying reforms signed by President Bush in September, which require campaigns to identify lobbyists who bundle together more than $15,000 in contributions to a candidate’s campaign.
The commission must also decide whether to appeal a U.S. Appeals Court decision that struck down regulations arising out of the 2002 McCain-Feingold campaign finance reforms that ban coordinated ads by special interest advocacy groups with the intent to influence a campaign for federal office in the months prior to an election.
“They will have to decide whether to appeal to the Supreme Court, or, if not, they will have to revise those regulations,” Mr. Baran said.
But the most politically sensitive and legally challenged issue awaiting the new FEC panel is the long overdue decision on Mr. McCain’s withdrawal from the public matching fund system amid related questions about a bank loan when his primary campaign was running low on money.
Earlier this year, he opted out of the public financing system in the primary campaign when he seemed assured of capturing the presidential nomination. But his effort was questioned by FEC Chairman David Mason, a Republican, who said the presumptive Republican nominee had to assure the regulatory agency that he had not used the promise of public money to secure a $4 million line of credit in November.
Then the Democratic National Committee (DNC) got into the act Feb. 25, filing a lawsuit to compel the FEC to conduct an investigation. It was rejected in U.S. District Court, which ruled the agency still had 120 days to fully consider the issue. That deadline expired Tuesday, though the FEC could not have acted until its vacancies had been filled.
The Senate was ready to vote last week on the FEC nominees, but in what Republicans saw as transparent political move, Senate Democratic Leader Harry Reid delayed the vote for a week until the deadline passed, clearing the way for the DNC to refile its lawsuit.
The DNC’s renewed suit charges that Mr. McCain had decided to “unilaterally withdraw from the FEC’s matching funds program despite using the program to financially benefit his campaign.”
“In order to receive matching funds, John McCain signed a binding agreement with the FEC to accept spending limits and to abide by the conditions of receiving those funds. The FEC requires that any request to withdraw from the agreement must be granted by the FEC,” the DNC said in a statement Tuesday.
The Republican National Committee dismissed the DNC’s claims Tuesday, saying “the same frivolous lawsuit was thrown out of court over a month ago.”
“The law states that a candidate must actually receive public funds to be subject to the primary campaign spending limit. The McCain campaign never received any primary matching funds, and the campaign’s lending bank has made clear that no entitlements to public funds were used as collateral to secure any loan,” RNC Chief Counsel Sean Cairncross said in a statement.
How the FEC will rule on the matter is unclear, but it is not likely to complete its consideration of the issue before the election, legal advisers have said.
“Either they say he could withdraw [from the primary system], or his actions were not valid and that he exceeded the spending limits that are imposed on a candidate participating in public funding,” Mr. Baran said. “Then months or years from now, after the fighting is over, he would have to pay a penalty.”
As for the $85 million Mr. McCain has applied for the general election, the FEC will have to vote on that once they have their quorum, “but I don’t think there is much suspense about it,” Mr. Baran said.
“They cannot withhold money for reasons that deal with compliance of other campaign finance laws. They are separate issues,” he said.
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