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McCain Able to Skirt Limits of Federal Financing

Thanks to loopholes in campaign financing and spending rules, Sen. John McCain may benefit from accepting federal funds instead of being limited by the decision.
Thanks to loopholes in campaign financing and spending rules, Sen. John McCain may benefit from accepting federal funds instead of being limited by the decision. (By Jeff Swensen -- Getty Images)

Trevor Potter, who is McCain's lawyer and a former FEC chairman, said the language soliciting for the victory fund was, in part, modeled on wording used by the 2004 Democratic nominee, Sen. John F. Kerry.

Potter objected to the assertion that money is being "earmarked" for McCain and his running mate, Alaska Gov. Sarah Palin, because the Web site clearly states that donations will go only to the RNC, the participating state parties and the compliance fund.

The campaign is also finding more latitude in how it can spend money during the final weeks. Under federal rules, the candidate can control only how his campaign's $84 million is used, and how $20 million in coordinated funds are spent in tandem with the RNC.

But McCain aides and the RNC are also working together on "hybrid" ads, which purport to advance the cause of his campaign and the fortunes of other Republicans. The RNC and the campaign split the cost of the ads, with the only requirement being that the ads mention, in some fashion, other elements of the GOP ticket.

Candidates from both parties first used such hybrid ads in 2004, and members of the FEC deadlocked over whether they should be allowed. Some lawyers considered the ads a way to bypass coordination rules and stretch the amount of money a presidential candidate could legally spend.

Fred Wertheimer, who heads the campaign finance reform group Democracy 21, called the use of the ads in 2004 "a scheme to evade the presidential public financing spending limits and the coordinated party spending limits," adding: "We urged the FEC in June 2007 to end this abuse, but they failed to take any action to do so."

David Mason, a former FEC chairman whose efforts to address the issue were derailed by a deadlocked commission, said, "There was a lot of discussion as to what standard should apply in terms of the content of the ad. Did you have to make an explicit appeal to the Republican ticket in a specific, identifiable way?"

The hybrid ads McCain and the RNC have aired to date offer quick, passing criticisms of Democrats such as Senate Majority Leader Harry M. Reid (Nev.), but there is little doubt they are intended to promote McCain, Mason said.

The hybrid ads and the use of joint fundraising committees are, in Noble's view, "the final distortion" of a presidential financing system that many have considered outdated for years. Because McCain has found other ways to both raise and spend money during the general-election race, Noble said, "it effectively means he is getting an $84 million subsidy for his campaign."

Obama advisers said this week that these efforts by McCain have only added pressure to the finance team to produce significant fundraising totals in upcoming weeks. "It's safe to say that is a fundraising record in Los Angeles," said Chad Griffin, a Hollywood political consultant. "This was billed as the last time Senator Obama was expected to be in Los Angeles before Election Day, so there was a tremendous amount of excitement."

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