Democrats Seek FEC Probe of McCain

[February 25, 2008]  WASHINGTON (AP) -- The national Democratic party wants campaign finance regulators to investigate whether Sen. John McCain would violate money-in-politics laws by withdrawing from the primary election's public finance system.

McCain, who had been entitled to $5.8 million in federal funds for the primary, has decided to bypass the system so he can avoid spending limits between now and the GOP's national convention in September.

Federal Election Commission Chairman David Mason notified McCain last week that he can only withdraw from public financing if he answers questions about a campaign loan and obtains approval from four members of the six-member commission. Such approval is doubtful in the short term because the commission has four vacancies and cannot convene a quorum.

"John McCain poses as a reformer but seems to think reforms apply to everyone but him," Democratic National Committee Chairman Howard Dean said Sunday.

he DNC said it plans to formally seek an FEC investigation Monday.

Part of the issue centers on a loan McCain obtained late last year. The loan was not directly secured by McCain's 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.

McCain's lawyer, former FEC Chairman Trevor Potter, has said McCain did not encumber any money that 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 Dean and Democrat Dick Gephardt, both of whom withdrew from public financing during the 2004 presidential primary.

"Howard Dean's hypocrisy is breathtaking, given that in 2003 he withdrew from the matching funds system in exactly the same way John McCain is doing today," McCain spokesman Brian Rogers said Sunday.

DNC spokeswoman Stacie Paxton said Dean, unlike McCain, took out no loan that raised questions about his use of potential public funds.

If McCain were prohibited from withdrawing from public financing, he would be severely limited in his campaign spending for the next six months. Under campaign finance rules, he would be allowed to spend only $54 million; as of the end of January, his campaign had already spent nearly $50 million.

[Associated Press; By JIM KUHNHENN]

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