Obama opts out of campaign finance system

WASHINGTON -- Presumptive Democratic presidential nominee Barack Obama will opt out of the presidential public financing system in the general election, he announced Thursday, setting aside an earlier promise to take public money if his Republican rival did the same.

Obama, who has shattered fundraising records in his White House bid, is walking away from $84.1 million in public money. He is the first presidential nominee to opt out of the public financing system since it was established in 1976.

"It was not an easy decision, especially because I support a robust system of public financing of elections," the Illinois senator said in a video statement released on his campaign's website. "But the public financing of presidential elections as it exists today is broken, and we face opponents who have become masters at gaming this broken system."

Obama lawyer Robert Bauer said he had sought to work out an agreement with the campaign of Arizona Sen. John McCain, the presumptive GOP presidential nominee, on public financing for the fall race, but said the two camps could not strike a deal. "It wasn't clear what there was to discuss," he said.

"Opting into the system is simply not viable," Bauer said.

McCain's campaign and supporters wasted no time in criticizing Obama's decision.

"Today, Barack Obama has revealed himself to be just another typical politician who will do and say whatever is most expedient for Barack Obama," McCain spokeswoman Jill Hazelbaker said in a statement.

"The true test of a candidate for president is whether he will stand on principle and keep his word to the American people. Barack Obama has failed that test today, and his reversal of his promise to participate in the public finance system undermines his call for a new type of politics," she said.

The public finance system is paid for with the $3 contributions that taxpayers can make to the presidential fund on their tax returns.

Obama has more than doubled McCain's fundraising in this campaign season, raising more than $265 million as of April 30 while McCain had raised nearly $115 million by May 31, according to the Associated Press.

Obama also has tapped into a vast network of small donors. Nearly half of his contributions for the primaries — 47% — came from contributions of $200 or less, according to the non-partisan Campaign Finance Institute, which studies money in politics. That gives Obama the ability to return to those donors for more cash. McCain has relied more heavily on larger donations; 23% of his donations came in chunks of $200 or less.

Obama's clear financial advantage over McCain is offset in part by the resources of the Republican National Committee (RNC), which has far more money in the bank than the Democratic National Committee. Both national parties can spend money on behalf of the presidential candidates.

In his video statement, Obama said McCain and the RNC are fueled by contributions from Washington lobbyists and political action committees.

"And we've already seen that he's not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations," Obama said.

Despite Obama's claim that outside groups allied with McCain will spend millions of dollars against him, few Republican-leaning groups have weighed into the presidential contest so far. In fact, Obama allies such as MoveOn.org are the ones spending money on advertising against McCain.

McCain and Obama both declined public financing in the primary contests, thus avoiding the spending limits that come attached to the money. McCain has been in a dispute with the Federal Election Commission, whose chairman earlier this year said McCain needed commission approval to decline the funds. The FEC has not had a quorum to act, however, because four of its six seats have been vacant pending Senate confirmation of presidential nominees. McCain lawyers have disputed the need for FEC approval.

Last year, both Obama and McCain indicated in separate commitments that they would participate in the public system for the general election, as long as both candidates agreed.

"We've known for some time that the public financing system was on the verge of breaking," said Richard Hasen, an expert on campaign finance at Loyola Law School in Los Angeles. "Now that the first major party candidate has opted out of it, it shows that is broken."

Candidates who accept public money face limits on what they can spend. The general-election spending limit for each candidate would be $84.1 million — the same amount each would receive from taxpayers. But national political parties can pump in additional money to help underwrite advertising and get-out-the-vote efforts.

"It would be completely irrational for someone with Sen. Obama's ability to raise money to opt in," Hasen said. "And even if both candidates were to opt in, they would have no control over outside groups that are subject to no limits."

But a leading campaign watchdog group immediately criticized the decision.

"We do not agree with Sen. Obama's rationale for opting out of the system," said Fred Wertheimer, president of Democracy 21, a group that supports public financing. "Sen. Obama knew the circumstances surrounding the presidential general election when he made his public pledge to use the system."

Contributing: Kathy Kiely; David Jackson; Associated Press

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