What a Tangled Web We Weave: Everything You Need to Know About John McCain and Matching Funds

Oh what a tangled web we weave,
When first we practise to deceive!

–  Sir Walter Scott

[Update 2/25: This post has been updated to reflect a further exchange of views with Professor Scarberry, who is quoted below.  At the time Prof. Scarberry first offered his opinion, he was not aware of the language of Sen. McCain’s revised December loan agreement.  In the end, he hasn’t changed his opinion, though he agrees that Senator McCain’s case got a bit tougher with that language.  But this points up part of the problem faced not just by we commentators, but by the FEC – are there other facts that we don’t know?

Additionally, today the Democratic National Committee filed a complaint against the McCain campaign, alleging that it is in violation of the law.]

The wonderful irony of government involvement in funding political campaigns – that is, giving your tax dollars to candidates and parties to use for convention balloon drops, negative TV ads, and campaign robocalls – is that it actually increases the perception of corruption in politics and distracts from discussion of political issues. Rarely has this phenomenon been so clearly illustrated as in the current flap over whether or not Senator McCain is committed to using tax dollars – with accompanying spending limitations – prior to his formal nomination at the GOP Convention in September.  

Can the Federal Election Commission force Senator McCain to take tax funds and limit his spending?  If so, what does it mean for his campaign?  Has his campaign broken the law?   Why can’t the FEC rule on Senator McCain’s predicament?  And is Senator Obama behaving ethically?   If you’ve followed a few of the stories, they all seem quite confusing.  But we’re going to sort things out for you.  So here you have it: all you need to know about Senator McCain and federal matching funds – and then some.

   TAX FINANCING OF CAMPAIGNS: HOW THE SYSTEM WORKS 

The Federal Government has two programs for providing tax dollars to presidential  candidates for campaign purposes, both administered by the Federal Election Commission.  The first is the primary “matching funds” program.  Under this program, a candidate who raises at least $5000 in contributions under $200 in each of 20 states is eligible to apply for matching funds.  If approved, the federal government will match individual contributions to that candidate up to the first $250 of the contribution.  So if you give a candidate participating in the program $50, the Feds give him another $50.  Give him a total of $250, he gets $250.  Give him a total of $1000, he gets $250. 

Although the funds that are “matched” can be raised anytime, the FEC starts paying out the money on January 1 of each election year.  The catch for a candidate participating in the plan is that he must submit to a government audit of his campaign, and more importantly, limit his overall primary spending.  This year that limit is about $54 million.  Primary spending is defined to mean all spending prior to the point at which he is formally nominated at his party’s convention, which for the Democrats this year is the last week in August, and for Republicans the first week in September.  Participation in the program is voluntary – the Supreme Court has ruled that candidates have a constitutional right not to participate and be subject to spending limits. 

The second program is the general election program.  This allows a major party’s nominee to receive a lump sum grant to pay for the general election (starting after he is officially nominated at those late summer conventions).  This year the amount of the grant is approximately $85 million.  By agreeing to take the funds, the candidate agrees to limit his spending to that amount.  Again, participation in voluntary.   

The two programs are funded by a three dollar check-off, or “earmark,” on your tax return.  If you check the box, three dollars of your taxes are earmarked for the fund.  In fact, even though checking the box does not increase your tax liability, very few taxpayers – fewer than 10% – are willing to divert $3 to the presidential campaign fund.  As a result, the fund is constantly low on money.   

At the start of each presidential election year, the FEC must first set aside enough money to pay for the general election campaigns of the two major party nominees – about $170,000,000 this year.  Then it must set aside enough money to pay a subsidy to the parties to fund their conventions.  This year the Republicans and Democrats will each get $16,350,000 in earmarked tax dollars to help pay for balloon drops, convention bunting, and the like.  Only after these funds have been set aside can the FEC pay candidates their primary “matching funds.” Because so few taxpayers are willing to earmark $3 of their taxes for political campaigns, the fund is chronically short of money to pay the full amount of primary matching funds to which candidates are entitled on January 1. 

In past election years, the FEC has paid out a pro-rata amount to each eligible candidate, and then paid the rest as more money flows into the fund when tax returns are filed.  Candidates typically make up the difference by borrowing from a bank, using their statutory entitlement to the matching funds as collateral for the loan.  In other words, the candidate goes to the bank, says, “I have a statutory right to collect at least $X in federal funds.  Please loan me $X, and I will pay you back from the matching funds when I collect them.” 

Now, getting a few million dollars in taxpayer money is always nice (at least I think it would be, though I’ve not personally had the pleasure), but over time more and more candidates have decided that the accompanying spending limitations make it a bad deal.  In 1996, Steve Forbes opted out of the primary matching funds plan, figuring he could spend a lot more money than the limits imposed on a campaign taking the government subsidy.  In 2000, both Forbes and George Bush opted out of the program.  In 2004, Bush, Howard Dean, and John Kerry all opted out.  By 2007, the plan had become such a bad deal that all the major candidates – and some of the lesser ones, too – announced that they would not take the government subsidy and commit themselves to living under its spending limits as they pursued their parties’ 2008 nominations.   

MCCAIN COMMITS 

John McCain was one of these candidates who announced that he would not take the money.  Then McCain’s campaign hit its early summer implosion.  McCain’s fundraising was flat, his campaign broke.  Many thought McCain would pack it in.  But McCain cut his staff, focused almost all his resources on New Hampshire, and applied for the matching funds, to “keep the option open.”  In fact, on August 20 of last year he became the first candidate the FEC approved for matching funds for the 2008 campaign. 

  THE FEC: IMPASSE AND AUTHORIZATION 

The Federal Election Commission is a six-member body, with no more than three Commissioners from one party – which as a practical matter, means three Democrats and three Republicans.  To assure that one party cannot simply force its will on the other, the law requires four votes for the Commission to act.

  Historically, though many appointments have been contentious, each party appoints its own Commissioners (with the President deferring to the opposition party’s congressional leaders for that party’s seats), and the nominees are confirmed in pairs, one Democrat and one Republican.   In January of 2006, President Bush filled three seats on the FEC (two Democrat and one Republican) via recess appointments, while nominating all three for a full term.  In the spring of 2007, Republican Commissioner Michael Toner resigned from the Commission, leaving the FEC with just five commissioners. 

In the summer of 2007, a number of liberal organizations launched a campaign against the senate confirmation of Republican Commissioner Hans von Spakovsky, one of the recess appointees, based on tendentious claims that von Spakovsky had worked to “suppress” minority votes while previously serving in the Voting Rights Section of the Department of Justice.  Though below the radar for most Americans, von Spakovsky’s nomination became something of a cause célèbre among liberal bloggers and within the Democratic-allied civil rights community.  Democratic activists sought to block von Spakovsky’s appointment, but Republican Senate Leader Mitch McConnell held firm for the principle that each party got to name its own commissioners.  Eventually, McConnell and Senate Majority Leader Harry Reid reached an agreement to confirm the three recess appointees, along with Republican Commissioner David Mason, who had been renominated to another full term. Enter Senator Obama.

In the early fall of 2007, polls showed Barack Obama was actually trailing Hillary Clinton among African-American voters, which may have affected his decision to act on the von Spakovsky nomination.  Shortly before the Senate vote agreed upon by Senators McConnell and Reid was to take place, Senator Obama placed a hold on von Spakovsky’s nomination, scuttling the deal but drawing praise from civil rights activists.  The impasse over the nominations lasted through the end of the year, when the recess appointments expired.  And because Senator Reid kept the Senate in pro forma session over Christmas to prevent President Bush from making any recess appointments, to the FEC or elsewhere, the FEC was suddenly left with just two commissioners, leaving it shy of a quorum.  However, at the last meeting of the year on December 20, 2007, while it still had a quorum, the FEC approved matching fund payments for seven presidential candidates, including the payment of $5,812,197.35 to Senator John McCain, and notified the Department of Treasury to disburse these amounts.  Because the matching funds payment period begins on January 1 of each year, the FEC traditionally makes this certification at the last meeting of the prior year, so this was a routine action. 

MCCAIN TAKES THE TAXPAYERS MONEY – OR NOT

By late fall, John McCain’s campaign was still desperately short of cash.  In November, his campaign took out a $3 million bank loan.  As collateral, the campaign essentially offered up every asset it had, including Senator McCain’s fundraising list, except for its right to receive federal matching funds after January 1.  This last point is crucial, for if the campaign used its anticipated tax subsidy as collateral, that would be considered “constructive receipt” of the funds themselves, thus locking Senator McCain into the system and limiting his total campaign spending until the Republican Convention in September to just $54 million.  It would be, in short, electoral suicide, because while the candidate with the most money doesn’t always win, $54 million is simply not enough to conduct a viable campaign for the first eight months of 2008, especially given that McCain had already spent over half that amount by late November. 

This deal raised some eyebrows, of course.  After all, you or I can’t get a bank loan by offering as collateral our fundraising list.  And it seemed that Senator McCain wanted it both ways – keeping open the right to take the taxpayer subsidy, if that was best, or continuing to raise private funds, if it looked like that would get him the most money.  But, as I always say when someone is accused of violating “the spirit of the law,” that’s just another way of saying that the person is complying with the law.  As Mark Scarberry, a professor at Pepperdine Law School, puts it: 

“If I were a lender, and a candidate who could not repay the loan refused to access funds that were available to repay the loan, I would think that the candidate was acting very, very unreasonably, and perhaps in bad faith. A commitment to access such funds if needed would seem almost to be implied, if we assume the candidate honestly wants to repay the loan. And isn’t it the case that every unsuccessful candidate who qualifies for public funds, and who has not yet exceeded spending limits, ends up asking for them, at least if they are needed to repay loans?  

“This leads me to conclude that McCain’s promise (if he made one), should not prevent McCain from withdrawing his application for public funds. He did not use the opportunity to obtain public funds to convince the lenders to provide the loans to any greater degree than he could have had he not applied for the funds. 

“Although the opportunity to obtain public funds may have been used to “secure” the loans (in the sense of “obtain” the loans), the loans were not “secured” by the right to the public funds (in the sense of the right being collateral for the loans). The lenders would not be entitled to be repaid from the public funds ahead of any other creditors of McCain (or of whatever related entity obtained the loans).” 

For Senator McCain, it was a good, smart move, and his staff could take pride in good lawyering.   

But in December, the campaign went back to the bank to borrow another $1 million.  The bank asked for more assurances of payment.  According to the Washington Post:

“They said, ‘You’ve explained how you can afford to borrow more, and how you can pay us back if things go well. What happens if things go badly?’ said Trevor Potter, a McCain attorney.

“The campaign’s response, Potter said, was that McCain could reapply in the future for federal matching funds, and would agree to use the FEC certifications for those funds as collateral.”

But here is where it really gets sticky.  The exact language matters, so I’m going to quote it.  The campaign put this pledge into the loan agreement: “If borrower withdraws from the matching fund program by the end of December 2007, but John McCain then does not win the New Hampshire primary or place at least within 10 percentage points of the winner of the New Hampshire primary, Borrower [McCain for President Campaign Committee] will cause John McCain to remain an active political candidate and Borrower will, within thirty (30) days of the New Hampshire primary (i) reapply for public matching funds, (ii) grant to Lender, as additional collateral for the Loan, a first priority perfected security interest in and to all of the Borrower’s right, title, and interest in and to the public matching fund program…” 

The bank could only know that Senator McCain was eligible for matching funds because he already had his certificate of eligibility.  So, does this amount to pledging the right to matching funds as collateral, thus locking Senator McCain into the system?  Professor Scarberry argues that it still does not, because (A) the condition placed on granting of a lien did not occur, and (B) it is not clear that under these circumstances a conditional and unperformed promise to grant a lien in the future would create in the present any kind of lien (even an equitable lien).  But he agrees that this is not so clear cut a case as the original agreement.

This is well reasoned and I am inclined to respect Prof. Scarberry’s opinion as correct, but I am not yet entirely convinced that it is right.  The fact is, in this case, a written pledge was included in the contract.  This suggests more than mere general knowledge that the bank could “rely” on McCain’s matching fund income.  Despite its conditional nature, formally pledging to pledge an asset as collateral seems awfully like pledging that asset as collateral.  Interestingly, the pledge of the matching funds was conditioned on the idea that Senator McCain might opt out of the matching funds system before 2008 (remember, the matching funds payment period began on January 1, 2008).   Why did the contract talk about withdrawing from the matching funds program by the end of December?  What if McCain withdrew on January 3?  Wouldn’t the bank have the same concerns about repayment?   Obviously, the presumption of both parties was that after December 31, McCain would be committed to the matching fund program, with its accompanying spending limits.     

So what happened?  Apparently, sometime between December 18, when the new loan agreement was signed, and December 31 McCain operatives figured out that the presidential funding system would not be able to pay out any money on January 1.  And so the campaign concluded that so long as Senator McCain did not receive any money from the Treasury, he could still withdraw from the system.  Meanwhile, they could keep the FEC’s matching fund certification as insurance against losing, which would cause their private fundraising to dry up.  And this they did, right through Super Tuesday, after which they finally notified the FEC that they were withdrawing their request for matching funds. 

So was it a lucky break for the campaign that the FEC could not make payments on January 1?  Senator McCain did not opt out of the matching funds system before January 1, 2008, so the condition to pledge the matching funds was never made operable.  I am not certain that this solves the problem, but I am inclined to think that it does, and let us assume that it does.  Is Senator McCain home free? Maybe not. 

THE OHIO BALLOT 

Senator McCain used his FEC certification for at least one other purpose.  Qualifying for the presidential primary ballot in Ohio is a complex process, requiring a candidate to gather over 100 signatures in each of the state’s 18 districts, using separate petitions for each county within the district, which must be filed with local election boards around the state.  Additionally, the candidate must gather still more signatures statewide, all under some very complicated rules and local interpretations.  Fred Thompson, Mitt Romney, Rudy Giuliani, and most of the presidential campaigns went through this process, at considerable time and expense.  With a filing date of January 3, this was done by these campaigns at precisely the moment McCain was desperately borrowing to keep his campaign afloat, lacking money and resources to organize and gather signatures to be placed on the Ohio ballot. 

But Ohio has an alternative means of getting on the ballot – you can simply present your FEC matching funds authorization to the Secretary of State, and go straight to the ballot, without petitioning.  And this is what Senator McCain did.  Does this amount to use of the matching funds certification locking Senator McCain into the system (not to mention a possible fraud on the state of Ohio)?  Again, it is an interesting legal question to which I don’t know the answer, but it is not one that the McCain campaign – or more importantly, the FEC – can simply brush aside. 

[Update: According to John Martin in the Politico, the McCain campaign, “contend[s] that the  Secretary of State  agreed to put him on the ballot simply on the basis of his qualification to participate in the public financing system.”  But Senator Thompson, Mayor Giuliani, Governor Romney, Senator Clinton, Senator Obama, and several other candidates also qualified for the funds, but because they did not agree to take the funds, they had to petition to get on the ballot.  In short, McCain got on the Ohio ballot by using his contractual agreement with the government to take the funds.  Other candidates, who also “qualified” for the funds in terms of meeting the statutory requirements of eligibility, were not permitted direct access to the ballot.  The point, as noted above, is that this is a serious legal question.]

THE GEPHARDT ADVISORY OPINION 

The McCain campaign insists that there is no question about the legality of their decision to withdraw from the matching funds system.  They point to an Advisory Opinion that the FEC issued to Richard Gephardt in December 2003, agreeing that Gephardt could withdraw from the system.  But the Gephardt AO, while helpful, is not exactly on all fours with McCain’s situation. 

First and most obviously, the FEC’s position in the Gephardt AO depended on the fact that the funds had not been pledged as collateral for any loan – a question at issue in McCain’s situation.  Second, the FEC noted that Gephardt, to remain free from the spending limits, would have to withdraw prior to the end of December 2003, before the Treasury would be authorized to pay out funds – although it is not clear if the FEC was focused on Gephardt actually being paid funds, or on the January 1 date itself (the former seems more likely, but not conclusive).  So the Gephardt AO is very helpful to Senator McCain, but does not necessarily dispose of the problem. 

THE COMMISSION’S LETTER 

Making all this more complex, or at least more murky, is the FEC’s lack of a quorum.  It takes four votes for the FEC to approve a candidate for funding.  Does it also take four votes for the candidate to withdraw from what is, in fact, a contractual relationship with the Commission?  Or is this merely a ministerial duty that the Agency’s staff can carry out?  Given the public reports about Senator McCain’s possible use of his certificate as collateral (is there more that we don’t know?), it seems to me that while one can argue that it is a ministerial duty to ask the Treasury not to issue funds to McCain, it almost certainly demands a vote by the Commission to clear the McCain campaign to bust the spending cap.

Moreover, the better argument is that a Commission vote is needed to release Senator McCain from his contractual and legal obligations to the government.  2 U.S.C. 437c(c), which controls how the FEC is allowed to operate, states very clearly that, “the affirmative vote of 4 members of the Commission shall be required in order for the Commission to take any action in accordance with … chapter 96 of title 26.”  (emphasis added).  And what is Chapter 96?  It is the chapter governing the federal matching funds program. 

This week, the truncated FEC’s Chairman, David Mason, sent the McCain campaign a letter.   Mason noted that the FEC would treat McCain’s notification that he was “withdrawing” from the matching funds subsidy program as a request to have the Commission withdraw its previous authorizations of funding for McCain, in accordance with the afore-quoted 2 U.S.C. 437c(c).  Mason also asked for verification that Senator McCain had not pledged his authorization as collateral.  Sources say that McCain’s campaign lawyer, former FEC Commissioner Trevor Potter – who has long lobbied for “strict” enforcement of the law and who presumably is the architect of McCain’s campaign finance strategy – exploded at FEC staff.  If true, it once again indicates the inability of McCainiacs to understand who has their best interest at heart.  Mason’s letter is carbon copied to Judith Tillman, the Treasury official who oversees payments from the matching funds account.  What does this mean?  I can’t be sure, but I suspect it means that Treasury was about to send McCain a check that the latter didn’t want.  Note that once the FEC certifies a candidate for matching funds, the Treasury – meaning Ms. Tillman’s division of Treasury – is legally obligated to cut the check.  It has no power to withhold the money.  And who can tell it to withhold the check?  Not John McCain (though he can refuse to cash it), but only the power that authorized it, in this case the FEC.    And under 437c(c), the FEC appears to need four votes to do that – a point Chairman Mason made to Senator McCain.  Sending the letter to McCain may be enough for Commissioner Tillman at Treasury to hold off on sending McCain money while waiting for the situation to straighten out. Chairman Mason may have been saving the McCain campaign’s bacon, even if the latter is too arrogant and stupid to know it. 

In any event, the McCain campaign argues that The FEC, lacking a quorum, cannot deny its application to withdraw from the campaign.  Mason’s position, which seems sounder as a matter of law under 437c(c), is that without a quorum, they cannot authorize McCain to withdraw.  McCain is now waiving around his constitutional rights to withdraw from the plan, which is a bit sketchy given his prior statement that, “I would rather have a clean government than one where quote First Amendment rights are being respected.”  One can obviously waive constitutional rights, and the question is whether or not McCain did so by entering a contract with the FEC to limit his spending.  So McCain’s assertion merely begs the real question: has he waived his constitutional right to unlimited funding? 

WHAT SENATOR MCCAIN WILL DO 

Regardless of all the legal maneuvering, the bottom line is that Senator McCain is going to blow through the spending limits and take his chances with the FEC down the road.  To do otherwise would be to limit himself to less than $5 million in spending between now and September, which would be electoral suicide.  The spending caps killed Bob Dole in 1996, and Dole at least was able to have his campaign supported by the Republican Party in the interim.  However, because of the McCain-Feingold (oh what wonderful twists there are to this plot) the Republican Party cannot do for McCain what it did for Dole – support his campaign with soft-money funded issue ads.  No, the only option for McCain is to spend, and let the legal chips fall where they may. 

The major penalty for violating the spending cap after agreeing to take the public subsidy is that you have to repay the government money.  This is a big deal if you’ve already spent it, but in McCain’s case, he hasn’t spent any government money.  Beyond that, the penalties include up to a $25,000 fine and five years in jail for a knowing and willful violation.  No one thinks for a moment that John McCain will or should go to jail for this.  Even the signers of the loan – McCain campaign manager Rick Davis and fundraiser Carla Eudy – aren’t really in danger of seeing a prison cell.  And a $25,000 fine?  Chicken feed. 

But McCain cannot just blow off the FEC.  While the FEC may lack a quorum now, some day, presumably, it may again have one.  At that point, it will be able to vote to issue subpoenas to obtain copies of McCain’s loan documents, internal bank memoranda, McCain campaign memoranda and more.  It may take the depositions of the Eudy, Davis, ubiquitous McCain aide Mark Salter, and anyone else who might have evidence – even Senator McCain.  It won’t be pretty.  So this may be much more a PR problem than anything else for the McCain campaign.  That McCain has made his reputation as a “reformer” makes it all the more a PR problem.  But it’s a risk that simply has to be run.  There is no other choice. 

SENATOR OBAMA’S ETHICAL QUANDRY – AND SENATOR MCCAIN’S 

Meanwhile, we have in the wings Senator Obama, who increasingly looks like the presumptive Democratic nominee.  Even more than Senator McCain, Senator Obama appears to be an undiluted believer in campaign finance regulation.   But remember why the FEC is not functioning, and why it cannot rule on Senator McCain’s request to withdraw from the matching funds program – it is because Senator Obama has a permanent hold on the nomination of Hans von Spakovsky.  One can say Bush should nominate someone else, or von Spakovsky should withdrawal his name, or Senator McConnell should allow separate votes on the nominees (which would allow the Democratic majority to dictate the GOP commissioner) but the bottom line is that this was all worked out, and the three recess appointee/nominees – two of them Democrats – would have all been confirmed to full terms months ago but for Senator Obama’s decision to block von Spakovsky. 

This raises an interesting ethical issue: is it proper for Senator Obama to play havoc with his almost certain general election opponent in this manner?  It’s not that Senator Obama had this result in mind when he put the hold on the von Spakovsky nomination, but that is where he is today.  And some citizens will begin to conclude that Mr. Obama is not exactly Mr. Clean, but rather Mr. Dirty, using his power as a Senator to directly hamstring his opponent’s campaign.  (A delicious footnote to this aspect – opposition to von Spakovsky’s confirmation was led by the Campaign Legal Center, an organization of which Senator McCain’s legal counsel, Mr. Potter, is Chairman.) 

Senator McCain faces a similar quandary.  If Obama’s actions keep the FEC from absolving McCain, McCain has an interest in preventing a quorum to keep the FEC from prosecuting his campaign.  So far he has shown no inclination to do so.  But if he were to be elected this fall, and complaints against him over this issue were outstanding, could he realistically make any appointments to the Commission without a gross conflict of interest, or at least “the appearance of corruption?”    

The point is not that either man intended to behave unethically.  It is that the law makes it appear that they are behaving unethically, and actually presents them with ethical dilemmas otherwise missing.

SOME LESSONS TO BE LEARNED 

So, what are some lessons to be learned from this little soap opera.  Here are two we suggest: 

1. The law is way too complex.  Political activity should not be hampered by such a suppressive waive of regulation.  In the past, McCain’s lawyer, Trevor Potter, has pooh-poohed such concerns, claiming that even small time, grassroots candidates had no cause to complain about the law’s complexity.  But if a lawyer of his ability representing the almost certain presidential nominee of a major party can end up in such arcane disputes, what do these laws do to average citizens seeking to participate?

 In this regard, it may also be worth noting that over the years both Mr. Potter and Senator McCain have abused Chairman Mason with insults, name-calling, and unfair criticism, mainly on the theory that by not doing Senator McCain’s and the “reform community’s” bidding, he was refusing to, “enforce the law.”  Senator McCain, for his part, has shown a stubborn unwillingness to learn what his laws really mean, or to even inquire into the relief that is requested in the many lawsuits he has allowed to be filed in his name.  Perhaps the current flap will cause the Senator to moderate his future approach, and give “reformers” such as Potter some second thoughts about complexity. 

2. Tax financing of campaigns is a waste of money. 

Tax financing is supposed to prevent corruption.  But nobody seriously thinks that Senator McCain or Senator Obama is devising his policies to placate donors, and there are no voters who are evaluating the candidates’ integrity based on whether or not they take tax subsidies for their campaigns.   “No matter,” say some reformers, “the appearance of corruption” is enough.  But here, regardless of whether or not the McCain campaign is operating within the law, nobody is harmed.  It is an offense not against the people, but against at most the regulatory apparatus of the state.  This should no more create “an appearance of corruption” around Senator McCain than would the knowledge that he once drove at 73 miles per hour in a 65 mph zone.  Since Senator McCain has played a major role in maintaining and expanding that regulatory apparatus, and shown little concern for other citizens prosecuted under these laws, it is hard to be sympathetic to his plight, but one thing this case is not about is “corruption.” 

Similarly, Senator Obama’s actions in blocking von Spakovsky suddenly fall under an ethical cloud – he can be accused of using his Senate position to lock up the FEC to the detriment of his likely general election opponent.  In short, the system, far from removing the “appearance of corruption,” is creating an appearance of corruption where it should not exist. In addition to the anti-corruption rationale, tax subsidies are supposed to free up the candidates from fund-raising and allow the campaign to focus on issues.  Instead, for the last week the various campaign flaps have dominated campaign coverage, distracting from the discussion of issues. Finally, tax financing is supposed to promote equality, but as we see, the rules and regulations will affect different candidates differently, often increasing inequality between them, and providing a tool for candidates to attack one another.   

It is hard to imagine a more wasteful government program than taxing citizens to pay for political campaigns.  The system is an earmark for “good government” types that ought to go. If these two lessons can be learned, something good will have come out of this flap du jour.