In a shift, Obama rejects public funding

Email|Print|Single Page| Text size + By Brian C. Mooney
Globe Staff / June 20, 2008

Barack Obama rejected public funding for the fall presidential campaign yesterday, a dramatic blow to 1970s good-government reform that has been overwhelmed by an explosion of private money.

John McCain confirmed later yesterday that he will take $84.1 million in taxpayer funding for the general election, and accused Obama of reneging on a pledge to do the same. "He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people," McCain told reporters.

Obama's decision to become the first major-party candidate to opt out of public financing for the general election frees him to continue his record-shattering, Internet-driven fund-raising until November - and probably to outspend McCain by a vast amount. But it opens the Democrat to accusations of an about-face on past statements that he would take the public grant and limit spending to that amount if the Republican nominee agreed to do likewise.

In a video message to his supporters, Obama explained his reversal by asserting that the public-financing system is irreparably broken and he is instead involving the public through his "grassroots movement" of 1.5 million donors, many of whom give small amounts.

"We face opponents who've become masters at gaming this broken system," he said, contending that McCain is underwritten by lobbyists and special interests, and that his rival will not "stop the smears and attacks from his allies" in independent groups who can raise and spend unlimited funds.

Firing back, McCain's campaign called Obama "just another typical politician who will do and say whatever is most expedient" and said his "reversal of his promise to participate in the public-finance system undermines his call for a new type of politics."

A longtime advocate for campaign finance reform, McCain qualified for public matching funds during the nomination phase but withdrew from the system and accepted no money. That move is now being challenged by the Democratic National Committee, which says McCain used the matching-fund certification to help secure a bank loan that kept his then-struggling campaign afloat. The Arizona senator filed a report yesterday showing he raised $21.5 million in May, his best fund-raising month of the campaign.

Obama's campaign has repeatedly demonstrated an ability to raise millions in small-dollar donations in a matter of hours over the Internet, almost at will. The Illinois senator has raised roughly three times as much as McCain to date, and has the potential to outspend McCain by an enormous margin as he competes in traditionally Republican states as well as key battlegrounds. Through the end of April, Obama had already collected about $10 million for use in the general election campaign, a stretch of nine-plus weeks after his formal nomination in Denver at the end of August.

Obama has touted his longstanding support for public financing. Answering the accusations of breaking a pledge, the Obama campaign contended yesterday that McCain has in effect been running a general election campaign with private funds in conjunction with the Republican National Committee since early March, when he locked up the GOP nomination, while Obama spent the past three months dueling Hillary Clinton for the Democratic nomination.

Advocacy and watchdog groups said Obama's decision demonstrated the need to repair a public financing system in tatters, undermined in part by a precipitous slide in public support.

Common Cause, which advocates public financing, for years "has said the presidential public-finance system is badly outdated and in need of a major overhaul, so we made a decision at the beginning of the election season not to criticize candidates for not participating in a flawed system," the group's president, Bob Edgar, said in a statement. Obama "gets a demerit" for reneging on his pledge, Edgar said, but he praised the Democrat's decision to not accept contributions from lobbyists and support other reforms.

Obama's decision "is further evidence that the system is not working," said Sheila Krumholz, executive director of the Center for Responsive Politics, a nonpartisan research group that tracks and analyzes campaign fund-raising and spending.

"If we want to make this a viable option and free candidates from the burden of raising this private money - and all of the expectations that come with that money - we need to make some changes," she said, anticipating progress regardless of who wins in November because "both have made reform a central plank in their platforms."

Krumholz also noted that public support for the system has steadily eroded - only 9 percent of taxpayers in the country voluntarily contributed $3 of their income taxes to the presidential campaign fund in 2005, the last year for which data is available. In 1980, about 29 percent checked off a contribution to the fund on their tax returns. The fund's current balance is $170.7 million, according to the Federal Election Commission.

Norman Ornstein, a resident scholar on politics and elections at the conservative-leaning American Enterprise Institute, said Obama's move makes political sense. "When you're looking at the kind of money he can raise now from small donors and your first goal is to win . . . there's nobody who wouldn't do this," he said.

Obama's online fund-raising prowess, Ornstein said, reflects the Democrats' success in building a better infrastructure to trump the successful old Republican fund-raising and communication models built on direct mail and talk radio.

Obama's campaign boasts that nearly half of its more than 3 million contributions were $25 or less, and 91 percent were $100 or less. "Instead of forcing us to rely on millions from Washington lobbyists and [political action committees], you've fueled this campaign with donations of $5, $10, $20, whatever you can afford," Obama told supporters yesterday.

Krumholz, however, noted that 55 percent of the more than $265 million Obama's campaign raised through April 30 came from individuals who gave more than $200 and nearly 30 percent of the total was from contributors who gave the maximum, $2,300. Much of the big-donor money was from typical sources with interests in Washington.

While Obama will be the first major party nominee to forgo public financing in the general election campaign since the system started in 1976 after the Watergate scandal, the trend away from the campaign finance reforms has become clear in recent elections. In 2000, George W. Bush became the first nominee of either party to bypass matching funds during the nomination process, but accepted public funds in the general election. Four years later, both major party nominees, Bush and Democrat John F. Kerry, declined matching funds before their nominations, but each took taxpayer money for the general election campaign.

During the nomination process this year, none of the major Republican candidates for president took matching funds (McCain was certified to receive $5.8 million but did not take the money) and only one of the top three Democrats, John Edwards, took public funding. Clinton indicated from the outset that she would also pass up public funds if she won the Democratic nomination.

The national party committees and outside advocacy groups have exploited the seams of campaign finance laws and regulations to supplement the spending of the candidates' campaigns through so-called independent expenditures and issues ads. In 2004, the parties and independent groups spent more than $500 million to help Bush and Kerry, with the Democrat the bigger beneficiary.

Many of the most active groups this election have Democratic sympathies, but Obama has asked his supporters not to contribute to them. McCain's campaign lawyer said yesterday that McCain also discourages his backers from donating to outside groups, whose support he does not seek.

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