Obama to Reject Public Funds for Election

By Shailagh Murray and Perry Bacon Jr.
Washington Post Staff Writers
Friday, June 20, 2008

Sen. Barack Obama reversed his pledge to seek public financing in the general election yesterday, a move that drew criticism from adversaries and allies alike but could provide him with a significant spending advantage over Republican rival John McCain.

Obama will become the first major-party presidential nominee to reject the public funds, passing up nearly $85 million in taxpayer money and instead looking to the 1.5 million donors who contributed to his primary campaign. Given his groundbreaking success in raising money in the Democratic primaries, estimates of how much he could collect for the general-election run to $300 million or more, a sum that would allow the senator from Illinois to compete even in traditionally Republican states.

"It's not an easy decision, and especially because I support a robust system of public financing of elections," Obama said in a video message to supporters, circulated yesterday morning by his campaign. "But the public financing of presidential elections as it exists today is broken, and we face opponents who've become masters at gaming this broken system."

The announcement came as Obama's national finance committee was preparing to meet in Chicago, and on the same day he launched his first television ad of the general election.

In the hours after the announcement, McCain indicated he would consider forgoing public financing as well, but he later indicated that he will opt into the system. "We will take public financing," he said on the Straight Talk Express bus. Asked why, he said simply, "Because we decided to take public financing."

But earlier in the day the senator from Arizona lashed out at Obama. "This is a big, big deal," McCain told reporters while touring a flood-ravaged area in Columbus Junction, Iowa. "He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people."

Through the end of April, Obama had raised $272 million, and he is required to file a report covering his May activities today. McCain submitted his May filing yesterday, showing he had raised a total of about $122 million after bringing in $21 million last month.

Under the public financing system, which was established in the wake of the Watergate scandal, candidates are barred from raising private funds or spending their own money on their general-election bids. The lump sum they receive from the Treasury is the only money they can spend once they are officially declared their party's nominee.

A separate public funding system governs the presidential primaries, and Obama and McCain were among the contenders who shunned the federal money and the spending limits that come with it. With his bid for the GOP nomination foundering late last year, however, McCain used the promise of his ability to collect public funding as collateral for campaign loans. Both the Federal Election Commission, which governs the systems, and the Democratic National Committee have been highly critical of the maneuver.

Yesterday, government watchdog groups expressed disappointment with Obama's move. Public Citizen President Joan Claybrook called $85 million "plenty of money" and warned that private funding -- even in the mostly small sums that Obama relies on -- "comes with the expectations of special access or favors."

The presumptive Democratic nominee is one of three lead Senate sponsors of legislation to change the public financing system.

"Senator Obama knew the circumstances surrounding the presidential general election when he made his public pledge to use the system," said Fred Wertheimer, president of Democracy 21.

Sen. Russell Feingold (D-Wis.), a co-sponsor of the bill, called Obama's decision "a mistake" but added: "I look forward to working on this and a wide range of other reform issues with him when he becomes president."

Yesterday, McCain cleared his schedule to visit the scene of extensive Midwestern flooding, but his trip was overshadowed by Obama's announcement, which has the potential to change the shape of the race.

As if to underscore his financial advantage, Obama released his first national television ad yesterday, a 60-second spot that will run in potential swing states, including Missouri, Florida and Pennsylvania, as well as in Alaska, Montana and North Carolina -- states that McCain needs to carry to win.

McCain brushed aside the suggestion that Obama's potential money edge will hurt his prospects. "That doesn't worry me," he told reporters in Iowa.

Although campaign finance issues rank low on lists of voter concerns, the McCain team pounced on Obama's move, along with his rejection of the 10 town hall meetings that McCain has proposed, as evidence that his claim to represent a "new politics" is empty rhetoric. The campaign circulated Obama quotes praising public financing and accused him of breaking his pledge to negotiate the issue with the GOP nominee. McCain spokesman Brian Rogers dismissed an account by Obama aides of recent talks between the two camps on the issue, saying it was "flat-out false."

"He's broken his word," said Charles R. Black Jr., a top McCain adviser. "He said he believes in the new politics; to me it sounds like the old politics. If you're going to change politics in America, that's a step backward."

But Republicans conceded privately that Obama's decision puts them at a disadvantage. McCain has attended dozens of fundraisers since he clinched the nomination in March, averaging close to one event per day. He appeared in Chicago on Wednesday night at an event that raised more than $1 million, and he met with donors in Minneapolis yesterday. Next week's schedule includes two fundraisers in California, two in Ohio and one in Las Vegas. McCain's wife, Cindy, will join Henry A. Kissinger for an event with U.S. expatriates in London.

McCain's campaign is also bracing for a huge wave of spending from labor unions and other Democratic-aligned groups.

"I assume he's going to outspend us," Black said of Obama. "We don't have to spend as much as he does to win."

Obama's announcement was not unexpected. Months ago, he began to shift away from an early pledge to "pursue an agreement with the Republican nominee to preserve a publicly financed general election."

After securing the Democratic nomination this month, Obama moved quickly to impose his own stringent fundraising restrictions on the Democratic National Committee, ordering it to stop accepting donations from federal lobbyists and political action committees, and he has discouraged his donors from contributing to liberal independent political organizations, called 527 groups, that are expected to hammer McCain in the fall.

"John McCain's campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special interest PACs," Obama said in his message to supporters yesterday. "And we've already seen that he's not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations."

To date, no conservative 527 groups have materialized. But Obama portrayed his call as a preemptive strike.

"From the very beginning of this campaign, I have asked my supporters to avoid that kind of unregulated activity and join us in building a new kind of politics -- and you have," Obama said. ". . . I'm asking you to try to do something that's never been done before."

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