DNC To File Complaint Against McCain Campaign For FEC Violations

Washington, DC - The Democratic National Committee today announced that it will file a suit with the U.S. District Court in D.C. next week to compel the Federal Election Commission (FEC) to investigate John McCain's decision to unilaterally withdraw from the FEC's matching funds program despite using the program to financially benefit his campaign, which is clearly against the law. While John McCain talks about transparency and running a different kind of campaign, his actions and rhetoric clearly don't square as he continues to skirt FEC law.

"John McCain poses as a reformer but when it comes to his own campaign, he thinks the rules apply to everyone but him," said Democratic National Committee Chairman Howard Dean. "Taxpayer dollars helped him secure a private loan to keep his campaign afloat, he got free ballot access which saved his campaign money and yet it's clear he doesn't think he needs to stick by the legally binding contract he signed. John McCain is breaking the law and doesn't seem to care. You can't say one thing on the campaign trail and then act as though the rules don't apply when they are inconvenient. That's not the kind of transparency the American people are looking for in their next president."

In February, the DNC filed a complaint with the FEC calling on the Commission to investigate whether the McCain campaign is breaking the law by ignoring spending limits in the primary. Despite the fact that his campaign materially benefited from the matching funds program, McCain's campaign has taken the unprecedented step of unilaterally withdrawing from the program without FEC approval. FEC Chair David Mason raised questions about whether loans McCain received last year were secured as a result of McCain qualifying for matching funds. McCain also used his qualification for matching funds to qualify for the ballot in several states. FEC filings show McCain has already exceeded the spending limits for the primaries.

Since the FEC lacks a quorum, it has not begun an investigation into the complaint the DNC filed against McCain on February 25, 2008.
Now that it appears that the Senate is on track to approve the needed FEC nominations, the DNC is making clear that this should be on the top of the FEC's agenda. If the FEC fails to act within 120 days, the law permits a complaining party to file a suit asking the Court to compel the Commission to act on the complaint. The DNC originally filed suit in April 2008, but the Court ruled that the DNC needed to wait for the 120 day time period to expire before it could pursue its case. Accordingly, if the FEC does not act by June 24, 2008, the DNC will file suit in U.S. District Court, asking the court to require the Commission to act on the original administrative complaint within 30 days.

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 makes clear that any request to withdraw from the agreement must be granted by the FEC. In other words, McCain can't just unilaterally withdraw. FEC Chairman David Mason made this clear in a letter to McCain advising him that the law requires the FEC to approve his request to withdraw from his contract. After Chairman Mason raised these questions, President Bush suddenly withdrew his longstanding nomination of Chairman Mason for another term on the Commission--thereby firing Mason for doing his duty by insisting that Senator McCain follow the law.

According to past Commission rulings, the McCain campaign would not be allowed to withdraw from matching funds because it already violated a key condition for being let out of the program - pledging matching funds as collateral for a private loan. McCain obtained a $4 million line of credit -- drew $2,971,697 from it - and documents make clear that the promise of public financing was used to secure his loan.

In the original complaint, the DNC said "the Commission should (1) find reason to believe, pursuant to 2 U.S.C. §437g(a)(2), that Senator John McCain and the McCain Campaign have committed, or are about to commit, a violation of Chapter 96 of Title 26 and of the Commission's rules, and should conduct an investigation; and (2) pursuant to 26 U.S.C. §9040(c), petition the appropriate U.S. District Court for injunctive relief to implement and enforce the provisions of Chapter 96 against Senator McCain and the McCain Campaign."