McCain in His Comfort Zone, Finance Issues Loom

CINCINNATI, Feb. 26, 2008 — -- Sen. John McCain was back in his comfort zone.

The day began with a town hall-style event in front of a crowd of several hundred supporters packed into the Umerley Civic Center in Rocky River, Ohio, just outside of Cleveland.

The Straight Talk Express, his campaign bus and his primary mode of transportation way back in New Hampshire when he was broke and fighting for survival, has been brought back to ferry him between events.

McCain seemed to have put behind him the bruising end to the last week during which he was accused in the nation's premier newspaper of having an "inappropriate relationship" with a female lobbyist. But the unresolved issue of whether the Republican presidential candidate can opt out of public campaign financing still looms over the candidate.

For nearly an hour, a buoyant, high-spirited McCain fielded questions from the audience. At one point he was asked what kind of benchmarks should be the used for judging progress in Iraq. He veered off into a defense of his remark that the United States could be in the Iraq for 100 years. In recent days, the Democrats have been hammering away at McCain for that comment.

"I was asked at a town hall meeting [in New Hampshire in early January] how long would we have a presence in Iraq," McCain said. "My friends, the war will be over soon — although the insurgency will go on for years and years and years. But it'll be handled by the Iraqis not by us."

The "100 years" line has clearly stung McCain. Now he is fighting back, ridiculing the notion that he has been predicting the U.S. military would wage war in Iraq for the next century.

On his bus later, the Arizona senator elaborated as he relaxed, sipping from a can of Coke.

"The United States of America in many conflicts, after the conflict was over, have negotiated security arrangements with the country that was our ally. … After the Korean War, we had an arrangement with the South Korean government to have a military presence. After the first Gulf War, we still have a basic arrangement with Kuwait. We have a basic arrangement with Turkey. We have a basic arrangement with Japan. We have troops in Bosnia. We have troops all over the world," McCain explained.

"Americans will withdraw," he went on. "But Americans may have, as they have with so many other countries, a security arrangement far into the future. Any relation between that and whether we would be in a war for a hundred years is obviously a spurious charge."

It was evident that McCain had moved on from the uproar last week over The New York Times article that cited unnamed former McCain staffers saying they were concerned that he was having a inappropriate relationship with lobbyist Vicki Iseman.

If anything, it is the Times, not McCain, that ended up under fire and on the defensive, after the article.

The more pressing concern now may be whether McCain can withdraw his application for public campaign financing.

McCain applied for the money months ago when he was low on cash and struggling in the polls.

But with money now pouring into the resurgent campaign, McCain has informed the Federal Election Commission he wants to opt out of the public financing and avoid restrictions on how much money the campaign can spend before the GOP convention in September.

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.'"