But FEC chairman David Mason, a Republican, replied that McCain may not be allowed to now bypass public financing.
"There's no question that he benefited from the system," said former FEC counsel Larry Norton. "He obtained a loan by virtue of his commitment to join back in. The question, as a legal matter, is if he's stuck."
The issue is further complicated because it requires an FEC ruling to decide. A stalemate between Senate Democrats and Republicans over a White House nominee to the commission has left four vacancies on the six-member board. Without a quorum, the FEC cannot rule on McCain's appeal.
If he is unable to opt out, McCain would only be allowed to spend $5 million for the next six months, a pittance for a national political race while his Democratic opponent would be able to spend many times that sum.
The Democratic Party has filed a complaint against McCain, calling on the FEC to investigate whether he can legally bypass public financing for the primary.
On Monday, the McCain campaign's lender, Fidelity & Trust Bank, said the loan agreement was specifically drafted to give McCain the opportunity to withdraw from public financing during the primary elections. Lawyers for the bank said the loan terms specifically excluded from the collateral any potential share of public matching funds McCain was entitled to receive.
"The bank does not now have, nor did it ever receive from (McCain's campaign) committee, a security interest in any certification of matching funds," the bank lawyers wrote to McCain's attorney, Trevor Potter, a former FEC chairman.
Asked about the possibility of his failing to leave the public financing system, McCain professed not to be worried.
"I have no doubt about the eventual outcome," he said.
At the same time, McCain is dealing with another potential embarrassment left over from the Times article: whether he met personally in 1999 with Lowell "Bud" Paxson, a major McCain contributor and owner of several television stations — before writing a letter to the Federal Communication Commission urging the panel to rule promptly on Paxson's bid to buy a Pittsburgh TV station.
McCain's campaign has said there was no such meeting. Paxson told the Washington Post, there was. On Monday, in Rocky River, Ohio, McCain said he didn't remember, but added he was only urging the FCC to render a decision, not to approve the sale
"The most important thing is the letter I wrote said do not make any decision either way," McCain said. "I said I am not asking you to say anything favorably or unfavorably — that's the key to it."
A former Paxson Communications president who was in charge of the company's lobbying efforts at the time told the Associated Press he never met with McCain about the FCC matter and doubted Paxson would have.
''I never met with or discussed this with Senator McCain," Dean Goodman said. "I don't recall Bud (Paxson) meeting with McCain. It would be extremely rare that there would be a meeting that I didn't attend … Whether Bud discussed it with him or not, via some other mechanism, I can't rule it out (but) I don't think there was a meeting.''
Earlier in the day, talking to reporters about Iraq, McCain, who is a staunch supporter of the troop surge, said he would lose the general election in November unless he can convince Americans that the United States is winning the war. Then moments later, he retracted what he said.
"Let me not put it that starkly," McCain said. "Iraq will play a role in their judgment of my ability to handle national security. If I may, I'd like to retract 'I'll lose.'"