On the February 25 edition of CNN's The Situation Room, host Wolf Blitzer noted that “Democratic Party Chairman Howard Dean today formally asked the Federal Election Commission [FEC] to investigate John McCain.” Blitzer added: “Dean accusing McCain of trying to skirt campaign finance laws by opting out of the public financing system for his primary campaign.” But Blitzer did not explain why McCain's ability to opt out is even an issue: namely, that he obtained a loan for his campaign in November 2007, agreeing under certain circumstances to remain in the race, regardless of the viability of his campaign, in order to apply for matching funds to pay back the loan. As the Associated Press reported on February 21: “The government's top campaign finance regulator says John McCain can't drop out of the primary election's public financing system until he answers questions about a loan he obtained to kickstart his once faltering presidential campaign. Federal Election Commission Chairman David Mason, in a letter to McCain this week, said the all-but-certain Republican nominee needs to assure the commission that he did not use the promise of public money to help secure a $4 million line of credit he obtained in November."

Moments later on The Situation Room, Blitzer reported the McCain's campaign response: “McCain's campaign says the Republican is allowed to withdraw from the public financing system without FEC approval, and they're citing Howard Dean's own decision to opt out of the system back in 2004.” Blitzer did not report that McCain had entered into the loan agreement or note the FEC chair's assertion that the loan (as well as the lack of a quorum) may prevent decertification of McCain's campaign, facts that the DNC said in a February 24 press release distinguish McCain's situation from Dean's in 2004. The DNC's complaint to the FEC also discusses the loan.

While Blitzer failed to mention the loan, a February 25 AP article reported: “McCain's loan, from Fidelity & Trust Bank, has become a central issue in the Arizona senator's attempt to bypass the public financing system and the strict spending caps that come with it.”

In his letter to McCain, Mason said that the law “requires an affirmative vote of four Commissioners to withdraw” certification of eligibility to receive public funding. Moreover, Mason noted that McCain claimed that he and his campaign had not “pledged the certification of Matching Payment funds as security for private financing,” but, Mason “invite[d]” McCain “to expand on the rationale for that conclusion.” Referring to the FEC's December 12, 2003, Advisory Opinion, Mason wrote: “The Commission stated that it would withdraw a candidate's certification 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.' ”

As Media Matters for America noted, on the February 20 edition of CNN's The Situation Room, CNN congressional correspondent Dana Bash reported McCain's “scathing criticism” of Sen. Barack Obama over the issue of public funding, without mentioning McCain's loan.

From the John McCain 2008, Inc. Business Loan Agreement:

Additional Requirement. Borrower and Lender agree that if Borrower withdraws from the public 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 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 Borrower's right, title and interest in and to the public matching fund program, and (iii) execute and deliver to Lender such documents, instruments and agreements as Lender may require with respect to the foregoing.

[...]

COMPLIANCE WITH THE FEDERAL ELECTION COMMISSION'S MATCHING FUNDS PROGRAM. Borrower agrees and covenants with Lender that while this Agreement is in effect, Borrower shall not exceed overall or state spending limits set forth in the Federal Matching Funds Program, if applicable.

[...]

STATUS OF CURRENTLY HELD CERTIFICATIONS OF MATCHING FUNDS. Borrower and Lender agree that any certifications of matching fund eligibility currently possessed by Borrower or obtained before January 1, 2008 and the right of John McCain 2008, Inc. and John McCain to receive payment under these certifications are not collateral under the Commercial Security Agreement for this Loan.

On December 17, 2007, the loan was modified as follows:

Without limiting anything set forth in this Modification to the contrary, certain provisions of the Loan Agreement are hereby modified as follows:

(a) The paragraph entitled “Additional Requirement” set forth in the Affirmative Covenants section of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

"Additional Requirement. Borrower and Lender agree that if Borrower withdraws from the public matching funds program but John McCain then does not win the next primary or caucus in which he is active (which can be any primary or caucus held the same day) or does not place at least within 10 percentage points of the winner of that primary or caucus, Borrower will cause John McCain to remain an active political candidate and Borrower will, within thirty (30) days of said primary or caucus (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 Borrower's right, title and interest in and to the public matching funds program, and (iii) execute and deliver to Lender such documents, instruments and agreements as Lender may require with respect to the foregoing. Borrower and Lender agree that Borrower will provide oral or written notice to Lender at least 24 hours before notice of withdrawal from the public matching funds program is provided by Borrower or John McCain to the Federal Election Commission."

(b) The paragraph entitled “COMPLIANCE WITH THE FEDERAL ELECTION COMMISSION'S MATCHING FUNDS PROGRAM” set forth in the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

"COMPLIANCE WITH THE FEDERAL ELECTION COMMISSION'S MATCHING FUNDS PROGRAM. Borrower agrees and covenants with Lender that while this Agreement is in effect Borrower shall not without Lender's prior written consent, exceed overall or state spending limits imposed under the Federal Matching Funds Program, irrespective of whether Borrower is subject to such program as of any applicable date of determination."

(c) The paragraph entitled “STATUS OF CURRENTLY HELD CERTIFICATIONS OF MATCHING FUNDS” set forth in the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

"STATUS OF CURRENTLY HELD CERTIFICATIONS OF MATCHING FUNDS. Borrower and Lender agree that any certifications of matching funds eligibility now held by Borrower, and the right of the Borrower and/or John McCain to receive payment under such certifications, are not (and shall not be) collateral for the Loan." [emphases in original]

[...]

(f) The paragraph entitled “Collateral Description” set forth in the Security Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

“COLLATERAL DESCRIPTION. The word ”Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement:

[...]

Grantor and Lender agree that any certifications of matching funds eligibility, including related rights, now held by Grantor are not themselves being pledged as security for the Indebtedness and are not themselves collateral for the Indebtedness or subject to this Security Agreement. Grantor agrees not to sell, transfer, convey, pledge, hypothecate or otherwise transfer to any person or entity any of its present or future right, title and interest in and to the public matching funds program or any certifications of matching funds eligibility, including related rights, issued with respect thereto without the prior written consent of Lender."

From the February 25 edition of CNN's The Situation Room:

BLITZER: On our political radar this Monday: Democratic Party Chairman Howard Dean today formally asked the Federal Election Commission to investigate John McCain. Dean accusing McCain of trying to skirt campaign finance laws by opting out of the public financing system for his primary campaign.

McCain had been entitled to nearly $6 million in federal funds for the primary system. He's now decided to try to bypass the system so he can avoid spending limits between now and the GOP convention in September. McCain's campaign says the Republican is allowed to withdraw from the public financing system without FEC approval, and they're citing Howard Dean's own decision to opt out of the system back in 2004.

Mitt Romney's son Josh says he's considering a run for Congress. Romney reportedly has been approached to run for the seat in Utah now held by Democrat Jim Matheson.