As Obama, Clinton join forces money matters move to fore.

Byline: Kenneth J. Moynihan

COLUMN: KENNETH J. MOYNIHAN

Barack Obama and Hillary Clinton are hitting the campaign trail together.

Pass it on!

First, let us back up a little.

Before announcing the upcoming campaign meeting with Mrs. Clinton, the Obama campaign made news when their candidate said he was changing his mind about something. He had discovered that his campaign treasury could hold substantially more than the $84 million pittance the federal government had set aside for him. Add one new item to your list of the bizarre aspects of the 2008 campaign. The Democratic - repeat, Democratic - candidate had access to so much private money that he declined to participate in the public financing system.

Meanwhile the GOP candidate is doing so poorly as a fundraiser that he has decided to pick up his $81 million, thank-you-very-much. Along with that money come spending limits that will not apply to Mr. Obama. Mr. Obama did not walk away excuse-less. He was perfectly willing to blame his change of position on his opponent. He said Mr. McCain and others around him had been "gaming" the federal campaign finance system for months. What did that mean?

The reporting on this charge has been pretty thin, perhaps because it was old news to the people who follow the campaign on a blow-by-blow basis. Thank Gore for the Internet!

The best account of the McCain gaming I found was a blog written by Jake Tapper, ABC News' senior national correspondent. It appeared last Sunday.

It seems that the controversy centers on Mr. McCain's suggestion last winter that he might enter into the public financing system after the primary season. When his primary campaign got into deep trouble, he asked the Federal Election Commission for authority to receive matching funds. The FEC said he was eligible for $5.8 million from the primary funds. The campaign, though legally prepared to accept both the public matching funds and the spending limits that went with them, did nothing to collect that money. However, "toward the end of 2007" Mr. McCain took out a $4 million line of credit.

According to Mr. Tapper, Mr. McCain used just under $3 million of that line of credit to help salvage the campaign. Democrats charged Mr. McCain with using his eligibility for federal matching grants as collateral, an allegation denied by the candidate and by the bank. The FEC chairman wrote a letter in February to Mr. McCain stating that withdrawal from the public finance program required FEC permission. The campaign said it did not need permission.

The Democratic National Committee filed a lawsuit to force the FEC to investigate the McCain withdrawal. In April a judge said that was premature, since the FEC had 120 days to act on a complaint. The deadline was yesterday.

To be fair I should note a conflicting blog posted Monday at The Washington Post Web site by Matthew Mosk. Mr. Mosk says that Mr. McCain told the bank "if the campaign went badly she would use future matching funds to help repay the loan. The rules say that candidates who use matching funds as collateral have to remain within the confines of the system." Mr. Tapper's report says Mr. McCain and his lawyers denied using as collateral the ability to raise matching funds. Mr. Mosk says Mr. McCain told the bank that was exactly what he planned to so. We shall see.

Further complicating this tale is the fact that the FEC, with four of its six seats vacant and awaiting Senate action, cannot muster a quorum to take action.

Ms. Clinton and Mr. Obama planning to campaign together? Yes, yes. Let us not forget the 27th of June, when the two Democratic leaders get together over money. The invitation to the meeting at the Mayflower Hotel in Washington was sent to Clinton supporters by her campaign's national financial director with a suggestion that each guest contribute the legal maximum of $2,300 to the Obama campaign.

There is a natural curiosity about how the two former rivals will interact. It's interesting that Mrs. Clinton is raising funds for Mr. Obama before Mr. Obama carries through on his reported pledge to help her retire her campaign debt. Also, it isn't easy to make a commitment to a primary candidate and then embrace the opponent when he or she emerges victorious. Perhaps rich people who get involved in politics have thicker skins than the rest of us. Then there's always a chance that they might want to be looked upon favorably by the new team in town. It happens.

Kenneth J. Moynihan's column appears regularly in the Telegram & Gazette.