Monitors: McCain didn't violate finance laws

Federal Election Commission rejects DNC argument; will vote next week

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updated 9:47 p.m. ET Aug. 14, 2008

WASHINGTON - Republican presidential hopeful John McCain won a round against Democrats on Thursday when the Federal Election Commission rejected their contention that he violated campaign finance laws during the GOP primary.

The FEC's draft opinion affirms McCain's right to bypass the public financing system and the strict spending limits that come with it. That was a rejection of the Democratic National Committee's complaint asserting that McCain's campaign had wrongly received loans based on his participation in public financing before later withdrawing from that system.

The DNC pointed to a section of campaign finance law that bars candidates from withdrawing from the public system if the candidate has "pledged public funds as security for private financing."

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Lawyers for the FEC concluded that McCain did not pledge to use public financing as collateral for the loans and did not violate the law.

The FEC is scheduled to vote on the matter next week.

"We are pleased but obviously not surprised," McCain spokesman Brian Rogers said. "The campaign did not pledge any federal matching funds certifications as collateral for a bank loan."

McCain had been entitled to $5.8 million in the federal funds for the Republican primary, but decided to rely on donations instead so he could avoid spending limits before the GOP convention in September.

Part of the dispute centered on a loan McCain received late last year. It was not directly secured by McCain's potential access to public funds. But his agreement with the bank required him to reapply for public funds if he lost early primary contests and to use that money as collateral.

McCain's lawyer, Trevor Potter, said the candidate did not encumber any money that he would have received from the federal treasury.