LA Times, NPR omitted FEC chair's assertion that McCain cannot withdraw from public funding without approval

In an April 15 Los Angeles Times article, staff writer Dan Morain reported on the Democratic National Committee's lawsuit seeking to have a court act on the DNC's complaint that McCain has violated campaign finance laws, but Morain did not note that FEC chairman David Mason has taken the position that McCain cannot opt out of public financing in the primary without FEC approval. In a segment the same day on National Public Radio's Morning Edition, reporter Peter Overby also reported on the DNC's lawsuit without noting Mason's position.

In the Times article, Morain noted that "at a time when his campaign was struggling, McCain indicated that he would take matching federal funds for his primary effort" and later "kept his campaign afloat by taking out a bank loan that, according to Democrats, promised the matching funds as collateral." NPR's Overby reported the positions of the McCain campaign and the DNC, but did not mention Mason's position:

OVERBY: McCain's lawyers say his alleged violation is no violation at all. Here's what happened. When McCain's campaign was about to go broke over the winter, he got a line of credit from a bank. He had already applied for public financing. But when his fundraising got better, McCain declared that he was withdrawing from the public financing program.

The DNC lawsuit says he can't do that -- because he had already made financial use of his access to public funds. The Democrats point out that McCain's campaign manager guaranteed to the bank that McCain could qualify for public money in the future.

By contrast, the Associated Press reported in an April 13 article: "Part of the dispute centers on a $4 million loan McCain obtained late last year. The loan was not directly secured by his potential access to public funds. But his agreement with the bank required him to reapply for public funds if he lost early primary contests and to use that money as collateral. FEC Chairman David Mason has said McCain can only withdraw from public financing if he answers questions about the loan and gets the agency's permission."

Indeed, in a February 19 letter to McCain, Mason -- a former senior fellow at the conservative Heritage Foundation and a former Republican congressional staffer -- wrote:

As you may be aware, in Advisory Opinion 2003-35 (Gephardt), the Commission balanced the voluntary nature of participating in the Matching Payment Program with the contractual obligations a candidate commits to once he seeks and receives Commissions certification of eligibility to receive payments under the Matching Payment Program. The Commission made clear that a candidate enters into a binding contract with the Commission when he executes the Candidate Agreements and Certifications. AO 2003-35. The Commission stated that it would withdraw a candidate's certifications upon written request, thus agreeing to rescind the contract, so long as the candidate: 1) had not received Matching Payment Program funds, and 2) had not pledged the certification of Matching Payment Program funds as "security for private financing." Id.

Accordingly, we consider your letter as a request that the Commission withdraw its previous certifications. Just as 2 U.S.C. § 437c(c) required an affirmative vote of four Commissioners to make these certifications, it requires an affirmative vote of four Commissioners to withdraw them. Therefore, the Commission will consider your request at such time as it has a quorum.

The Times and NPR join several other media outlets that have recently omitted Mason's letter and position from reports on McCain's financing or the DNC's lawsuit.

From the April 15 Los Angeles Times article, headlined "Democrats sue over John McCain campaign financing":

The Democratic National Committee filed suit Monday to force the Federal Election Commission to rule on the legality of John McCain's decision to reject public financing for the presidential primary campaign after initially considering taking the federal money.

Mired in conflict between Democrats and Republicans over a nominee to fill one of four empty commission seats, the six-member Federal Election Commission lacks a quorum.

So the suit filed in federal court in Washington seeks court approval for the DNC to pursue legal actions against McCain.

The Republican National Committee denounced the suit as "total nonsense."

If the Democrats prevail, McCain will be limited in the amount he can spend before the GOP's Sept. 1-4 convention.

Last July, at a time when his campaign was struggling, McCain indicated that he would take matching federal funds for his primary effort. Later, he kept his campaign afloat by taking out a bank loan that, according to Democrats, promised the matching funds as collateral.

Once he became the presumptive GOP nominee, McCain's fundraising increased enough that he did not need the federal money -- or the restrictions on spending he would face by taking it.

From the April 15 edition of National Public Radio's Morning Edition:

STEVE INSKEEP (host): Awkward remarks are not the problem at the Federal Election Commission. The problem there, according to a lawsuit, is absolute silence. Most of the slots in the commission are not filled. So, in the midst of the biggest fundraising season in history, the FEC does not have enough commissioners to act on anything.

That's why the Democratic National Committee has sued. It claims the FEC failed in its obligation to investigate Republican John McCain. NPR's Peter Overby has more.

[begin audio clip]

OVERBY: The Democrats' lawsuit has a couple of angles to it. One is legal and technical, and we'll get to it in a minute. The other is political. The Democrats want to generate stories like this one: They want to remind voters of questions about McCain's campaign finance troubles, while Hillary Clinton and Barack Obama go on wrangling over the Democratic nomination.

Tony Corrado is a political scientist at Colby College and a specialist in campaign finance law.

CORRADO: I think that this lawsuit is in large part designed to try to keep this issue before the public. The Democrats are trying to keep the pressure on John McCain because they want to keep making the case that he has somehow violated the law.

OVERBY: So here's the legal part of the case: Democrats say McCain has violated campaign finance law and he's getting away with it because the enforcement agency, the Federal Election Commission, hasn't been able to function. The FEC needs four commissioners to decide anything, and it only has two, thanks to a standoff between Senate Democrats and the White House over confirmation of three nominees.

McCain's lawyers say his alleged violation is no violation at all. Here's what happened: When McCain's campaign was about to go broke over the winter, he got a line of credit from a bank. He had already applied for public financing, but when his fundraising got better, McCain declared that he was withdrawing from the public financing program.

The DNC lawsuit says he can't do that -- because he had already made financial use of his access to public funds. The Democrats point out that McCain's campaign manager guaranteed to the bank that McCain could qualify for public money in the future.

Joseph Sandler is the DNC's general counsel.

SANDLER: We think any fair and objective look at the facts would show that no bank at arm's length would make a loan to the McCain campaign in the situation it was in unless they knew that if push came to shove, they could rely on getting the taxpayer money to help repay the loan.

OVERBY: The kicker here is that if McCain is still in the public financing program, he has not received a dime yet from the program, but at the same time, he has broken the spending cap that goes along with the public money. Again, Joseph Sandler:

SANDLER: It's the first time that a presidential candidate is violating the law, arguably every day, by breaking the spending limit. The agency charged with enforcing the law is unable to do anything about it.

OVERBY: But this is not the first time the Democrats have taken notice of the situation. The DNC filed a complaint about it in February. Under federal election law, it can sue the commission for failing to act. The new lawsuit argues that having no functioning commission is the legal equivalent.

The Republican National Committee called the suit total nonsense, something concocted by trial-lawyer Democrats. Meanwhile, as if to emphasize the plight of the FEC, former chairman Robert Lenhard has asked that the White House withdraw his name from nomination for one of those empty seats on the commission. While he was waiting to be confirmed, he was hired by one of Washington's top law firms.

Corrado, the political scientist, says that's a bad sign for the commission.

CORRADO: Not only do we have a dysfunctional FEC at this point, but it is going to be increasingly difficult to find individuals who are going to be willing to serve on the commission.

OVERBY: Consider that Lenhard, a Democrat, had already served two years as a recess appointee without Senate approval. His nomination and two others have been pending in the Senate since December 2005.

FEC watchers say that if the stalemate isn't broken before the Senate's July recess, the commission will be out of business for the rest of this election year. Peter Overby, NPR News, Washington.