Sub-Primary Loans

In a story published on Saturday (arriving in Valparaiso by Pony Express today), The Washington Post reports that Senator John McCain took out a $1 million loan two weeks before the New Hampshire primary in order to keep his then-cash-starved campain afloat.  The loan agreement included a clause requiring that, if McCain did poorly in New Hampshire and could not raise sufficient funds to repay the loan out of campaign contributions, he would stay in the race for the Republican nomination so as to qualify for federal funds from which he could repay the loan.  Had that happened, McCain would also have been bound until the Republican Convention by spending caps imposed under Federal Elections Commission (FEC) rules.

Apparently, the Obama camp and other McCain critics are claiming that McCain is now required to abide by the FEC spending caps.  McCain, for his part, is reminding Senator Obama of his spokesman’s pledge that Obama would “aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”   

[Jeremy Telman]