I think it's important to restate in plain English what John McCain did wrong when he held out public money to secure a private campaign loan.
Did McCain's loan deal break laws or FEC rules? Does it lock McCain into the public system until the primary? I'm going to leave those arguments to the lawyers.
I'm asking whether McCain's campaign finance scheme is consistent with the image of moral rectitude he so confidently projects.
McCain applied for public financing back when his campaign was struggling. When his fortunes improved and spending limits became inconvenient, McCain wanted out. Ironically, a champion of campaign finance reform couldn't live with his own system.
By this point, the FEC had already approved $5.8 million in matching funds for him, but the money hadn't changed hands yet. This is an important point because once a candidate accepts public money, s/he can no longer opt out of the program.
So, McCain still had time for a quasi-honorable bailout, if he had been willing to make a clean break and proceed at his own risk--but he wasn't willing to forgo the safety net.
If McCain refused matching funds, he would need big loans. Back in December, when the loan deal was hatched, it wasn't clear that McCain was going to win.
Banks aren't stupid. They won't lend you millions of dollars without some assurance that you'll pay them back. So, the bank had a legitimate concern: How would McCain pay back the loan if his primary campaign imploded?
Here's how the McCain team reassured the bank that they were good for the money:
The plan was to opt out and fund raise like hell. If that worked out, great. But if they started losing, they promised to opt back into the public system. Then, they'd take that $5.8 million the government had already promised them, and use it to repay the bank.
McCain's deal had very serious political and ethical implications. If worse had come to worst, he would have been contractually obliged to stay in a hopeless race, just to get his hands on those matching funds. An ethical candidate weighs many factors when deciding whether to stay in a losing race, including the best interests of country, party, and family. McCain was willing to give final say to the bank.
McCain was all for public financing when his campaign needed public assistance. When the attendant restrictions became inconvenient, he wanted out. That's a little embarrassing for a self-styled ethics crusader, but it's understandable given the exigencies of politics.
But instead of making a good faith decision to set out on his own, at his own risk, McCain fell back on the promise of government money to get a private loan.
He didn't risk his own house or any of his considerable personal wealth. No, he put up our money as security for his gamble.
John McCain got that loan by holding out the promise of a public bailout.
McCain was gambling with public money to secure debt he incurred when he decided to ditch public financing! How's that