DNC - FEC Should Investigate McCain for Illegal Use of Taxpayer Dollars

Washington, DC -The Democratic National Committee today filed a lawsuit in U.S. District Court in D.C. 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 - just one of many McCain campaign improprieties. To view a copy of the DNC's lawsuit, please visit: http://www.democrats.org/page/-/pdf/DNCFECMcCain_062408.pdf.

John McCain talks about setting a new standard for "transparency and accountability" yet when it comes to his campaign, he doesn't seem to think the rules apply to him. First, he used taxpayer dollars to secure a loan to keep his campaign afloat in the primary, a move that's clearly against the law. Then the Wall Street Journal reported that McCain refused to pay for his campaign's use of a corporate jet - again against the law - and last week, his trip to Canada came under question for possible violations of federal law.

"Whether it's using a taxpayer funded loan to keep his campaign afloat, refusing to reimburse for his campaign's use of a corporate jet, or violating federal laws on a foreign campaign trip, John McCain has shown an increasingly troubling pattern of impropriety," said Democratic National Committee Chairman Howard Dean. "John McCain tries to brand himself as a reformer but how can the American people believe he'll change Washington when it's clear he thinks the rules apply to everyone but him? We had enough of that with the Bush Administration. We don't need it again with John McCain."

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. 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 - a move McCain ignored and cost Mason his job.

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.

On February 25, 2008, 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.The FEC has failed to act within 120 days, so the DNC is now asking the court to require the Commission to act on the original administrative complaint. Now that it appears that the Senate is on track to approve the needed FEC nominations, the DNC is also making clear that this should be on the top of the FEC's agenda.

A Troubling Pattern of Improprieties

First, McCain Illegally Used Taxpayer Dollars to Keep Campaign Afloat…

FEC Did Not Grant McCain Permission To Withdraw From Public Financing System in the Primary. According to the Washington Post, "The nation's top federal election official told Sen. John McCain yesterday that he cannot immediately withdraw from the presidential public financing system as he had requested, a decision that threatens to dramatically restrict his spending until the general election campaign begins in the fall… Mason notified McCain that the commission had not granted his Feb. 6 request to withdraw from the presidential public financing system." [Washington Post, 2/22/08]

FEC Raised Questions About A Loan the McCain Campaign Received. According to the Associated Press, "The government's top campaign finance regulator says John McCain can't drop out of the primary election's public financing system until he answers questions about a loan he obtained to kickstart his once faltering presidential campaign… Federal Election Commission Chairman David Mason, in a letter to McCain this week, said the all-but-certain Republican nominee needs to assure the commission that he did not use the promise of public money to help secure a $4 million line of credit he obtained in November." [AP/MSNBC, 2/21/08]

Then, McCain Refused to Reimburse for Use Of Corporate Jet…

Wall Street Journal: McCain Campaign Fails to Reimburse For Up To Four Campaign Flights. "She used the jet on several trips last year that included campaign-related activity but never got campaign reimbursement, according to flight-tracking records and campaign-finance reports verified by the McCain campaign. At the New York fund-raiser, she spoke on stage, warming up the audience for her husband. If the campaign had paid for Mrs. McCain's trip to New York and three others that appear to have included some campaign work, it would likely have cost a total of about $15,000, the equivalent of first-class fare for the trips combined." [Wall Street Journal , 6/18/08]

Republican Expert: McCain Should Have Paid for the Flights. "Jan Baran, a Republican campaign lawyer, said the campaign should have paid. 'I don't know why they want to fight it,' he said. 'The chutzpah is not that they're not paying for this trip, it's that they're using a corporate airplane at a highly discounted rate.'" [Wall Street Journal , 6/18/08]

New York Times: McCain Used Unresolved Loophole in His Own Reform Law to Get Discounted Flights. "Mr. McCain's campaign paid a total of $241,149 for the use of that plane from last August through February, records show. That amount is approximately the cost of chartering a similar jet for a month or two, according to industry estimates. The senator was able to fly so inexpensively because the law specifically exempts aircraft owned by a candidate or his family or by a privately held company they control. The Federal Election Commission adopted rules in December to close the loophole -- rules that would have required substantial payments by candidates using family-owned planes -- but the agency soon lost the requisite number of commissioners needed to complete the rule making. Because that exemption remains, Mr. McCain's campaign was able to use his wife's corporate plane like a charter jet while paying first-class rates, several campaign finance experts said. Several of those experts, however, added that his campaign's actions, while keeping with the letter of law, did not reflect its spirit." [New York Times , 4/27/08]

And Then More Legal, Ethical Problems Questioned in Canada…

Ambassador's Role in Organizing McCain Campaign Event Possible Hatch Act Violation. According to the Sun: "Wilkins had been contacted by the McCain campaign about a Canadian visit, and the ambassador wanted to know if some of d'Aquino's group of corporate chief executives might be interested in meeting the Republican presidential candidate. Almost instantly, d'Aquino jumped at the opportunity." The Hatch Act circumscribes political activity for government employees. According to the American Foreign Service Association Web site, the State Department's ethics office prohibits fundraising activities for its presidential appointees. The Web site for the association prints Cable No. 035610, the guidelines from the ethics division of the Department of State Legal Adviser's Office. "In particular, you may not sell tickets for or otherwise promote fundraising activities such as political dinners for a partisan candidate or political committee," the cable says. It adds that the rules are for anyone "on duty," and that "the legislative history suggests that ambassadors may be considered to be on duty twenty-four hours a day while they are at post." ["The Trail," WashingtonPost.com, 6/19/08]

McCain Campaign Claims Trip Wasn't Political Yet McCain "In a Cross-Border Political Attack" Criticized Barack Obama's Opposition to the North American Free Trade Agreement. "In a cross-border political attack, John McCain said Friday that Barack Obama's opposition to the North American Free Trade Agreement is 'nothing more than retreating behind protectionist walls.' The Republican presidential nominee-in-waiting said that if he wins the White House, the United States will "honor its international commitments." [AP , 6/21/08]

McCain Campaign Paid for the Trip to Canada, Used the Campaign Jet and Camapign Aides Staffed the Trip. According to the Washington Post, "one of McCain's top political advisers, Charles Black, watched him from a few feet away. Also from the Post, "A McCain spokesman said that while the campaign pays travel costs for the trip, the luncheon, held by the Economic Club of Canada, is not a fundraiser and not a campaign event. He said the $100-per-person ticket price for the event is to cover the cost of the lunch and will not benefit the campaign. ["The Trail," WashingtonPost.com, 6/20/08]