Obama responded to questions from reporters today on his unprecedented decision to opt out of the more than $80 million up for grabs in the public financing system - despite signing a pledge last year to do just that.

Obama today said that system was broken because of the amount of outside money pouring into campaigns from 527s, the national parties, lobbyists, and PAC’s. He believes the Republicans stand to benefit from outside groups. He’s still in favor of public financing in theory, however. “I am a sponsor of a public financing bill that can strengthen the system because I recognize not every presidential candidate may be able to do the same things that we’ve done in this campaign. And so my commitment to fixing the system remains, but in this campaign its my belief that in fact what we’ve built is something that frees ourselves from special interests and allows us to run an effective campaign as well,” he explained.

When a reporter explained that the amount of money coming into 527s and the RNC currently are minimal to John McCain’s campaign, Obama responded, “527s pop up pretty quickly and have enormous influence and we’ve seen them – there was an ad, one in South Dakota by Floyd Brown I think where it took a speech that I had made extolling faith and made it seem as if I had said that America was a Muslim nation. We’ve already seen attacks on my wife from the Tennessee Republican party. I don’t think that I am off the wall here to see that you know a lot of outside groups that are potentially going to be going after us hard. With respect to the RNC you’ve got Carly Fiorina who is McCain’s chairwoman saying, bragging about how much money the RNC is raising and how that money is going to be used to attack me and promote John McCain. So this isn’t speculative on my part.”

The McCain called Obama’s decision opportunistic yesterday - the underdog of February 2007 when he signed the pledge and the presumptive Democratic nominee have parted ways. Obama flipped the question and said McCain was “all over the map on public financing.” Said Obama, “At the beginning of this process, when I think they were projecting raising enormous amounts of money, he said we’d consider opting out of the system. Later when his campaign had collapsed for awhile, he said he was definitely in the public financing system. You know, I’m not gonna speculate on what we would have done, what I’m looking at is what we’ve been able to build.

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Before Barack Obama was the presumptive Democratic nominee - before he was even the frontrunner - the then long-shot candidate signed a pledge in February 2007 that if he would accept public financing in the general election if the Republican nominee agreed to do the same.

The candidate touted this pledge in a candidate’s questionnaire from the Midwest Democracy Network in November of last year. He wrote, “In February 2007, I proposed a novel way to preserve the strength of the public financing system in the 2008 election. My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election….If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”

The candidate is opting out of some $84 million in public funds - he’ll be the first to do so since Congress passed the legislation in the 1970s. John McCain has recently taken steps to opt in and today his campaign jumped on Obama’s decision, saying he has “revealed himself to be just another typical politician who will do and say whatever is most expedient for Barack Obama.”

Of course Obama has raised more money than any other presidential candidate, raking in some $265 million (as of the end of April).

In a video taped message to supporters this morning, Obama made his announcement. “It’s not an easy decision, and especially because I support a robust system of public financing of elections, but the public financing of presidential elections as it exists today is broken, and we face opponents who’ve become masters at gaming this broken system.”

The last time Obama was asked about the issue was just one day after he secured the Democratic nomination. He told reporters, “We’re not going to unilaterally disarm, and we’ve already had John McCain’s campaign finance chairman, for example, boast about the amount of money that’s been raised by the Republican National Committee that can be used to help John McCain and attack me. I was very clear at the outset that I would not put ourselves in a position where third parties and independent groups are outspending the Democrats by substantial margins, and John McCain - who’s now the leader of the Republican Party - is, you know I’m going to want to hear from him some assurances that we could actually shut that down.”

Watch Obama’s message to supporters here:

UPDATED: 3 pm ET (per Mosheh Oinounou)

Reporters shouted questions at Sen. Obama as he arrived and exited his meeting with members of the Congressional Black Caucus near Capitol Hill Thursday, but the presumptive Democratic nominee did not respond, choosing only to smile and wave at the assembled press.

John McCain today said he was “entertained” that Barack Obama is flirting with the idea of opting out of public financing should he win the Democratic nomination. “He didn’t talk about having discussions about third parties and all that when he committed to saying that he would take public financing if the Republican nominee did. I am the presumptive Republican nominee. I will take public financing. Keep your word to the American people. He’s always talking in his speeches about how we need to keep our word to the American people. Please keep your word to the American people on the commitment you made in writing,” McCain said forcefully, adding later that Obama had flip-flopped on the issue.

McCain was referring to the pledge the two candidates signed and submitted to the Federal Elections Commission last March, that would limit their funds to $85 million as general election candidates. But at a fundraiser the Tuesday night in Washington, DC, Obama referred to a “parallel public financing system” and called the current system “creaky” today at a press avail.

If Obama continues his record shattering fundraising prowess, McCain would face a huge financial handicap in the general election, which is why should Obama go forward and reject public funds, McCain admitted he would have to examine his options. “It is possible that I still will [accept public funds] and it’s possible that I won’t.” How will he decide? “Actually, a little straight talk, how we most benefit. I mean, you know, really how it is most beneficial to us,” McCain told reporters today.

Watch some of his comments from his Dallas press conference here:

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When asked if he agreed with Obama’s assessment that the current system is “creaky” and needs to be reformed, McCain shot back, “I have a record on reform, Senator Obama has rhetoric on reform. But I think it needs further reform and I’d be glad to join him in efforts to reform, but that doesn’t change the fact that he committed, a year ago, to public financing if I would.”

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Barack Obama denied today that he’s trying to create wiggle room to avoid accepting public financing in a general election — but conceded that the current financing system needs to change.

“I think that it is creaky, and needs to be reformed if it’s going to work,” he said. “The amount of money raised through the public financing system may be substantially lower than the amount of money that can be raised through small donations over the internet, which presents candidates, then, with some pretty tough decisions in terms of how they want to move forward if they want to compete in as many states as possible.

Over the weekend, Obama said his network of nearly 1.5 million Americans who have funneled hundreds of millions of dollars in small donations to his campaign over the internet constitutes “a parallel public financing system” — leading to speculation that he was laying the groundwork for refusing public financing while still saving face as an election reformer.

Today, he dismissed the suggestion that he was sending any sort of signal about his intentions in the fall. “What I was trying to suggest is that through the internet and the enthusiasm of this campaign, we’ve created a model for being able to compete at the highest levels of politics without being dependent on big monied interests. And I think that’s a real positive,” he said.

(more…)

Washington, DC — Arguing that Sen. McCain is engaged in the “height of hypocrisy” by reversing his decision to take public financing during the primary season, Democratic National Committee officials said they plan to file a complaint Monday with the Federal Election Commission.

The McCain campaign applied for federal matching funds last year but never received any FEC cash and maintains that they were on firm legal ground when they decided to withdraw from the system earlier this month. FEC spending limits would severely hamstring McCain until the RNC convention compared with Sen. Clinton or Sen. Obama–neither of whom is taking public money.

However, the DNC announced that they intend to ask the FEC to investigate whether the campaign is violating any laws by opting out of the system.

“The crucial issue here is John McCain’s integrity. John McCain poses as a reformer but seems to think reforms apply to everyone but him,” DNC Chairman Howard Dean said on a media conference call Sunday. “He used taxpayer money to guarantee a loan so he could raise money from lobbyists and special interests - it’s the height of hypocrisy. This is just the latest example of his do as I say, not as I do double standard, and it’s unlikely to be the last. McCain financially benefited from this legally binding contract - he got free ballot access, saving him millions of dollars, and he secured a $4 million line of credit to keep his campaign afloat by using public financing as collateral. He should follow the law.”

In response, the McCain campaign is calling Dean’s criticism as “absurd,” arguing there is precedent for their decision and also disputing his assertion that they used their existing request for FEC funds as collateral for a loan. See Letter E of their loan request.

The campaign is also pointing out what they call “Howard’s Hypocrisy,” noting that Dean also pulled out of the FEC system after initially applying for public funds during his 2004 presidential bid. (See McCain campaign research after jump)

“Howard Dean’s hypocrisy is breathtaking given that in 2003 he withdrew from the matching funds system in exactly the same way that John McCain is doing today,” McCain Spokesman Brian Rogers said in a statement.

(more…)

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Oshkosh, WI – In his latest shot at the Democratic frontrunner, Sen. John McCain called on his rival to live up to his pledge to take public financing during the general election.

“”It was very clear to me that Senator (Barack) Obama had agreed to having public financing of the general election campaign, if I did the same thing,” McCain said a press conference at a Wisconsin aviation museum Friday. “I am going to keep that commitment…I expect Senator Obama to keep his word to the American people as well.”

McCain is calling on Obama to make good on the commitment the IL Senator made in February 2007 –to take the $85 million lump sum in government cash for the general campaign if his Republican rival did the same. At the time, McCain was the only GOPer who took the Illinois Senator up on the agreement.

Obama spokesperson Bill Burton told the New York Times Friday that the campaign will “address that issue in the general election, when we’re the nominee,” adding, “we’re just not entertaining hypotheticals right now.”

The McCain campaign sees the public financing pledge as a rich political issue to hammer Obama on, but there is also an underlying strategic interest—putting JSM on equal $$ playing field with BHO in the fall. Obama has shown incredible fundraising prowess during the primary season–e.g. he took in $32 million in January to McCain’s $12 million.

**UPDATE**

Per FNC Obama embed Bonney Kapp, the Democratic senator was asked about public financing at an availability in Milwaukee this morning.  Obama is still speaking in very general terms: “If I am the nominee I will make sure our people talk to John McCain’s people to find out if we are willing to abide by the same rules and regulations with respect to the general election going forward. It would be presumptuous of me to start saying now that I am locking in to something when I don’t even know if the other side will agree to it. And I’m not the nominee yet. We’re trying to get through this process. As soon as we do I assure you my folks and John McCain’s folks will sit down and see if we can arrive at a common set of ground rules.”