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McCain's Campaign Finance Revelation

The Wall Street Journal April 25, 2008; Page A13

While Democrats absorbed the lessons of Pennsylvania this week, John McCain was coming to a few realizations of his own. For one, "big money" in politics isn't so bad after all.

That's the takeaway from the presumptive GOP nominee's new fund-raising strategy, which his campaign has quietly rolled out these past few weeks. The McCain camp is teaming up with the Republican National Committee to tap into big, big donations from big, big donors — hoping to close the big, big money gap with Democrats.

[McCain's Campaign Finance Revelation]
Presidential candidate John McCain.

Their effort to do so will involve some creative abuse of the campaign finance restrictions Mr. McCain authored a few years back. Whatever. The Arizonan may not yet fully understand that money is speech. At least he has come around to the view that more of the stuff is better when it comes to winning the presidency.

Whatever has driven the shift – conversion, pragmatism, desperation – Mr. McCain's new financial determination is welcome news to his supporters. GOP voters had worried their candidate would unnecessarily fetter himself with self-imposed finance restrictions. Instead, he looks eager to win. And as far as strategies go, this one is arguably Mr. McCain's best shot at evening the odds against a money powerhouse like Barack Obama.

The joke, of course, is that Mr. McCain helped create those long odds. Turns out this whole campaign-finance thingy hasn't turned out to be the clean-politics, leveled-playing-field he envisioned. All it has done is handicap Mr. McCain.

The senator thought he had a fellow-reformer in Mr. Obama. Then the Democrat figured out how to tap into the small-dollar contributions required under McCain-Feingold. Now he's awash in cash and unlikely to sign up for the general-election public-financing system both men once lauded.

Unable to match Mr. Obama with smaller donors and (thanks to his own law) unable to cash any million-dollar donations, Mr. McCain is resigned to public financing. This will limit him to $84 million in taxpayer funds from the convention to Election Day. Mr. Obama will have no such restrictions.

Meanwhile, McCain-Feingold's biggest "accomplishment" these past five years has been the flowering of those shadowy operations known as 527s, which abide by no rules. Democrats have fine-tuned these outfits, and are gearing up to unload hundreds of millions in negative advertising on none other than Mr. McCain. This bullet is aimed not at his foot, but his head.

In light of all this, the McCain camp has come up with a plan that it hopes will tighten the score. It has filed to create the "McCain Victory '08" fund, a "hybrid legal structure" that includes the campaign, the Republican National Committee, and four battleground states.

Mr. McCain's own law restricts individuals to donations of $2,300 per candidate, but those individuals can also contribute much bigger amounts to different party funds. So, with "McCain Victory '08," donors can write a check for $70,000.

Technically, the money is divvied up between Mr. McCain, the RNC ($28,500) and the four states ($10,000 each). In reality, it will in effect all be used for the candidate's benefit.

Such are the contortions of our twisted campaign finance system, loopholes Mr. McCain must be happy exist today. He gets to sock away bigger chunks of money, faster, in hopes of gaining on a Democratic rival who may not be able to stomach a similar arrangement with Democratic National Committee Chair Howard Dean. Mr. McCain raised about $15 million in March, compared to Mrs. Clinton's $20 million and Mr. Obama's $40 million. But the RNC itself raised $13 million, and has $30 million cash on hand in aid of its nominee.

Mr. McCain has also taken his share of shots at lobbyists over the years, part of his quest to curb the "influence" of money in politics. Yet another recent campaign revelation is that there are only a small number of Americans wealthy enough to actually write a check for $70,000. Included in that group are the K Street regulars.

That may explain why McCain campaign manager Rick Davis recently showed up in Washington to brief a group of 30 lobbyists and PR types on Mr. McCain's new fund-raising plans – and pass the collection plate. He also met with about 100 Republican chiefs of staff to spread the word about the new RNC partnership.

Whether this will ease Mr. McCain's financial woes is yet unclear, but it's arguably his smartest move, given the hand he's dealt himself. Just imagine what might have happened if Mr. McCain had fought instead for simple transparency – and trusted Americans to decide how much to give and to whom. Free speech, via money, can be a liberating thing.

Write to kim@wsj.com

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