Public-private partnerships

Apparently, John McCain has found a creative way to finance his campaign:

As The Washington Post reported on Saturday, John McCain's campaign struck a canny deal with a bank in December. If his campaign tanked, public funds would be there to bail him out. But if he emerged as the nominee, there'd be no need for public financing, since the contributions would come flowing.

It's an arrangement that no one has ever tried before. And it appears that McCain, who has built his reputation on campaign finance reform, was gaming the system.

Federal funding of elections has suffered some body blows this season; first Obama went back on his pledge to accept public funding, and now John McCain has discovered that public funding can serve as a loan guarantee for the banks. I suspect this will not be the last time we see this sort of arrangement; public funding is becoming a fallback for losers, rather than a credible committment for front-runners.

Comments

IIRC, Obama did not actually pledge to accept public funds -- rather he said, (paraphrasing) 'If I get the nomination, I think we can work something out.' He probably wants assurances from McCain that he'll keep a short leash on the 527 swift-boating types.

Posted by Matt B | February 19, 2008 9:29 AM

When did Obama go back on his pledge? Hell, he's not even the nominee yet. Besides, why should Obama hamstring himself when you have groups out there like Freedom's Watch, that have pledged to spend obscene amounts of money to try and defeat the Democrats this year? And as you pointed out, McCain was trying to game the system, so don't tell me he was serious about public funding. He was just using it(the possibility of using funds) to keep his lousy campaign afloat.

Posted by Joe Klein's conscience | February 19, 2008 9:32 AM

Well... actually, he did so pledge.

But it was a long time ago, and his fundraising has increased exponentially since then.

It's a promise safely broken. (If he chooses to. He still might live up to it.)

Posted by Ben (The Tiger) | February 19, 2008 9:35 AM

Here's what Obama said:

If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.

Since Obama is not (yet) the Democratic nominee, I don't see how Megan can say he's gone back on his promise to negotiate.

On McCain's agreement, I think Mark Schmitt has it right:

I don't think it's an exaggeration to say this is a promise to perpetuate a fraud on the American taxpayers: if [McCain] no longer intended to seek the presidency, he made a legally-binding promise to pretend to remain in the race just long enough to collect public money to repay the loan.

Posted by southpaw | February 19, 2008 9:46 AM

Just a quick comment: public financing is proving difficult this presidential campaign, but there are some excellent state systems. In Maine we have a robust public financing system that currently supports the spectrum of our political community, winners and losers, left and right, well known and unknown.

Posted by Sefrankel | February 19, 2008 9:46 AM

"On McCain's agreement, I think Mark Schmitt has it right:

I don't think it's an exaggeration to say this is a promise to perpetuate a fraud on the American taxpayers: if [McCain] no longer intended to seek the presidency, he made a legally-binding promise to pretend to remain in the race just long enough to collect public money to repay the loan."

no doubt learned at the knee of Charles Keating..

http://clusty.com/search?v%3afile=viv_901%4032%3a9fo5Z9&v%3aframe=list&v%3astate=root%7cN510&id=N510&action=list&sw=%7cMcCain%7c&sec=1203435082&

Posted by MEH | February 19, 2008 10:33 AM

I suspect this will not be the last time we see this sort of arrangement; public funding is becoming a fallback for losers, rather than a credible committment for front-runners.

Becoming? This was true in 2004 as well, you know. Howard Dean also initially vowed to stick by public funding when he was an underdog fighting the Democratic establishment (March 2003), but shifted by November, even making a big deal out of polling his supporters on his website about the question. It's easy to support public funding when you're the underdog, but hard when you have the fundraising advantage. That the amount of funds available if one takes public funding has not increased nearly as rapidly as the ability to raise private funds exacerbates the problem.

IIRC, Obama did not actually pledge to accept public funds-- rather he said, (paraphrasing) 'If I get the nomination, I think we can work something out.' He probably wants assurances from McCain that he'll keep a short leash on the 527 swift-boating types.

It would be illegal under McCain-Feingold for McCain to "keep a short leash on the 527s," you know. Coordination with candidate campaigns is illegal; surely you're not suggesting that Obama wants to break the law? And surely Democratic 527s will be operating as well. It actually points to a repeatedly mentioned criticism with McCain-Feingold-- money will find a way, and pushing money out of the control of the campaigns is not necessarily a good thing.

He's as cynical about it as McCain. They're both playing the system. It's nothing new, of course. He would be throwing away an advantage anyway, one that is reflective of the depth and breadth of his support.

Posted by John Thacker | February 19, 2008 10:42 AM

John, I know that coördinating with 527s is illegal. I imagine that they would have some agreement to publicly denounce swiftboat-style attacks.

Posted by Matt B | February 19, 2008 11:06 AM

Let's get the full citation out there.

At greater length:

The question: "If you are nominated for President in 2008 and your major opponents agree to forgo private funding in the general election campaign, will you participate in the presidential public financing system?"

Obama's answer: "Yes. I have been a long-time advocate for public financing of campaigns
combined with free television and radio time as a way to reduce the influence of moneyed special interests. ... My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election. My proposal followed announcements by some presidential candidates that they would forgo public financing so they could raise unlimited funds in the general election. The Federal Election Commission ruled the proposal legal, and Senator John McCain (R- AZ) has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."

He might be stupid to choose to stand by the pledge, but the pledge was indeed made.

Posted by Ben (The Tiger) | February 19, 2008 11:56 AM

He might be stupid to choose to stand by the pledge, but the pledge was indeed made.

Right, Ben, Obama certainly promised to pursue an agreement with McCain once he's the nominee. That's all in the future.

As the question says: "If you are nominated for President in 2008 and your major opponents agree to forgo private funding in the general election campaign . . ."

As far as I know, Barack Obama has not received his party's nomination and John McCain (whatever he pledged) hasn't agreed to forego public financing, so judging whether Obama is sticking to his word seems waaay premature.

Posted by southpaw | February 19, 2008 1:06 PM

sorry, that should read: hasn't agreed to forego private financing,

Posted by southpaw | February 19, 2008 1:45 PM

That pledge of Obama's was based on a conditional question (that "and your major opponents agree to forgo private funding . . .). If McCain decides to use private funds, Obama would not be breaking a pledge by using private funds as well.

Posted by Half Canadian | February 19, 2008 2:34 PM

Your answers sound positively Clintonian, Obama fans. :-)

Anyway, I think that every successful politician learns when to break a promise. This one is one to break.

Posted by Ben (The Tiger) | February 19, 2008 6:33 PM