Obama opts out of public funding for campaign

In a controversial but not unexpected move, Sen. Barack Obama has opted out of the public financing system for presidential candidates.

The decision by the presumptive Democratic nominee, announced to supporters in a video message Thursday morning, makes the senator the first major-party candidate to depart the system for the general election since its inception in 1976.

Senator Obama had strongly suggested he would stay within the system earlier in the campaign, but as he racked up impressive fundraising totals in his run for the nomination, it became clear that he could be better funded by forgoing public financing.

In a Monitor breakfast held moments after Obama’s announcement, two senior campaign officials laid out the rationale for opting out. They blamed Sen. John McCain, the presumptive Republican nominee and a longtime advocate for campaign-finance reform, for gaming the system. They also blamed so-called 527 groups, which operate independently of the campaigns and can take unlimited and unregulated donations, for rendering public financing unworkable.

“This system is broken,” said Robert Gibbs, communications director of the Obama campaign, at the Monitor event. “It’s now being manipulated and gamed by entities that possess and spend far in excess of what is allocated to each of the candidates to spend in the general.”

If Obama had opted to stay in the federal system, he would have been granted $84.1 million in taxpayer money to compete in the general election. But Obama’s fundraising prowess – he raised a record $55 million in February alone – means he will likely have far in excess of that to compete against Senator McCain.

Obama’s campaign appears to be gambling that it’s worth it to take a hit now for backtracking on its stated intent to stay in the federal system but reap the larger benefits of a financially flush campaign.

The McCain campaign fired back: “Today, Barack Obma has revealed himself to be just another typical politician who will do and say whatever is most expedient for Barack Obama,” wrote communications director Jill Hazelbaker 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 financing system undermines his call for a new type of politics.”

During the primaries, Obama had said that if he won the nomination, he would meet with McCain to work out a fair way to finance the campaigns. The meeting did not take place.

Robert Bauer, general counsel to the Obama campaign, said at the breakfast that he met with his counterpart on the McCain campaign, Trevor Potter, but by the time they met, it was clear to him the McCain campaign was already well into its own private-funding plan in conjunction with the Republican National Committee (RNC).

“There comes a point where it’s so obvious it’s merely a messaging effort and not a good-faith effort to meet us on competitive terms,” Mr. Bauer said. “It’s not clear what there was to talk about.”

In alleging in his video that the McCain campaign has become a master “at gaming this broken system,” Obama slammed his opponent and the RNC for accepting donations from lobbyists and political action committees. He also scored McCain for not stopping attacks from 527 groups.

The Obama campaign officials acknowledged that 527s operate, by law, independently of the candidates, but they said the candidates can still make it clear when they disapprove of the groups’ activities. When McCain said last week that “I can’t be a referee of every spot run on television,” Bauer said, that effectively gave a “green light” to 527 activities.

Bauer also accused McCain of pretending to have the option of a publicly funded general-election campaign, while privately doing aggressive fundraising during the months between securing the GOP nomination in February and his party’s convention in September.

There is wide agreement within both parties and among experts that the public-financing system is broken. In January 2007, Sen. Russ Feingold (D) of Wisconsin and three House members introduced legislation aimed at updating the presidential public-financing system in part by increasing matching funds, but the legislation has not gone anywhere. Senator Feingold opposed Obama’s move Thursday, but said he looks forward to reforming the system under a President Obama.

“I’m very much in favor of public financing. However, the existing public-financing law has been flawed from the start,” says Robert Mutch, a campaign-finance historian. “The main problem ... is that it became too easy to get around it.”

At the Monitor breakfast, the Obama officials suggested that the senator has in effect introduced his own campaign-finance reform by effectively using the Internet to raise hundreds of thousands of donations, most of them under $100.

“Senator Obama is asking his supporters to build the first general-election campaign that’s truly funded by the American people,” said Mr. Gibbs, who noted that, through May, the campaign received 3 million contributions from more than 1.5 million people.

Overall, through April, Obama has raised more than $265 million versus almost $97 million for McCain. Campaign-finance expert Ellen Miller says Obama could not have opted out of public financing without the “transformative influence that the Internet has had on politics.”

“He will still be raising money from wealthy individuals, many of whom might be corporate executives and have their special interests at heart, but at least to date the majority of his money has come from citizens at large,” says Ms. Miller of the Sunlight Foundation.
Gail Russell Chaddock contributed to this report.