Did he hypothecate or hypothesize?

Yesterday’s Wall Street Journal editorial on John McCain’s awkward attempt to work his way around the campaign finance edifice he helped to construct is instructive on several grounds. Consider this:

Last week, we wrote about the $3 million loan his campaign took out to keep his campaign afloat in November, putting up its fund-raising lists and a life insurance policy as collateral. If the campaign had gone south, Mr. McCain would still have been able to tap into donors from his position as a powerful Senator on the Commerce Committee to make good on the debt. More cash started to come in, but now it turns out that Mr. McCain’s campaign looked into borrowing another $1 million at its moment of peril before the New Hampshire primary, this time pledging its eligibility for federal matching campaign funds.
Here’s where the explanation gets really lawyered up. The McCain campaign hurries to say it didn’t actually surrender its public funding certification as collateral, oh no. The campaign applied to the Federal Election Commission for matching funds, and once that application was approved went to a bank and opened a line of credit based on the possibility that they might someday reapply for matching funds if the campaign faltered. “We never claimed that the matching funds were collateral for the loan,” says McCain lawyer Trevor Potter. “This was all a hypothetical future transaction.” (We wish we could get bank loans like that.)

Why does it matter? The Journal explains, and moderately concludes: “We suppose we can’t blame Mr. McCain for trying to make the finance rules work for him, but it’d be nice if he finally admitted their embarrassing folly.”

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