This morning's post commented on a sweetheart loan deal between Sen. McCain's Presidential campaign and a Maryland bank in December. Because of the Senator's then-risky prospects, the bank required him to secure a $1 million loan with the promise of repayments from the publicly-financed Presidential Election Campaign Fund for primary candidates.
The "sweetheart" part of this was that the bank tried to word the agreement in a way that the Senator would not be committed to actually enter the public financing system unless his campaign tanked. Normally, using public financing as collateral is supposed to lock a candidate into the public system then and there.
The McCain campaign drew up certification papers to enter the public system. However, after its victory in the New Hampshire primary, the campaign decided to forego the loan and tried to withdraw those papers.
The Federal Election Commission (FEC) has now informed Sen. McCain that it might not allow him to withdraw those certification papers. The FEC gives two reasons. First, the FEC cannot form a quorum to decide on the withdrawal. Second, it asks for more information regarding the loan.
Public financing in the primary campaign would provide Sen. McCain with some additional funds but would also restrict his fundraising and spending between now and the convention.
Sen. McCain has said that he wants to enter the public system for the general election. He has also criticized Sen. Obama for waffling on a pledge to stick to public financing in the general election.
Sen. McCain may find the restrictions of the public system binding him much sooner than he would like.