Democrat Barack Obama announced he won't accept public financing for his presidential campaign, calculating that he can raise far more than the $84.1 million he would get in government funds.

His decision makes him the first major-party candidate to opt out of the public structure for the general election campaign since it was created after the Watergate scandal more than 30 years ago. Republican John McCain, after initially saying he would consider opting out as well, said this evening he would take taxpayer financing for his campaign.
``The public financing of presidential elections as it exists today is broken, and we face opponents who have become masters at gaming this broken system,'' Obama said in a statement on his Website.
The announcement is a turnabout from his promise to pursue an agreement with the Republican nominee on accepting the public money and the spending limits that go with it. That was before he began pulling in record amounts of donations, and doing so would have meant surrendering a significant advantage over McCain. Negotiations between Obama and McCain never took place.
Through April 30, the latest date for which complete figures are available, Obama took in $266 million, $10 million of that for the general election. McCain raised around $110 million through May 31, none of it for the fall campaign. Strategists from both parties say Obama probably will outpace McCain by more than $100 million for the presidential campaign.
A big deal
McCain said Obama was breaking a commitment. “This is a big deal,” McCain said. He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people.
McCain said during a stop in flood-ravaged Iowa that he will ``have to reevaluate'' his own plans in light of Obama's decision. He said later in Minneapolis that ``we will take public financing.''
The Arizona senator's campaign already had taken steps to use the public-finance system. He has refunded all the general election money raised and isn't seeking any new post-primary donations except for a separate fund to cover legal and accounting costs, which he can solicit only if the campaign agrees to taxpayer financing.
``We think $85 million in public funding for the general election is plenty,'' McCain's general counsel, Trevor Potter, said.
Campaign finance expert Anthony Corrado, a government professor at Colby College in Waterville, Maine, said the extra money will allow Obama to compete in more states.
``He can basically run the type of campaign that attempts to defy the Electoral College voting of recent elections and use his resources to bring more states into play,'' Corrado said.
Obama's campaign released its first general-election television advertisement and said it will be broadcast in some traditionally Republican states, such as Alaska, North Dakota and Montana, as well as battlegrounds such as Florida.
While saying he favors a ‘robust’ public-finance system, Obama, a senator from Illinois, has kept his options open on withdrawing from the structure, which is designed to limit the influence of big-money donors.
He sought and got a ruling from the Federal Election Commission in March 2007 that a candidate could raise money for a general election campaign and return it if the candidate accepts public financing.
Seeking donations
At a $28,500-a-plate fundraising dinner at Ethel Kennedy's Hickory Hill estate in McLean, Virginia, yesterday, donors were told that the first $2,300 of their donation would go for Obama's primary campaign, the second $2,300 for the general election, and the rest to the Democratic National Committee.
Obama can go back to most of his contributors. Only about 5 percent of Obama's 1.5 million donors have given the maximum $2,300 for the general election, according to the Center for Responsive Politics, a Washington-based research group.
Democratic strategist Joe Trippi predicted that Obama could raise as much as $500 million for the general election campaign that begins after the party convention in August.
Obama may risk his image as a reformer who has made rejecting support from lobbyists and moneyed interests a cornerstone of his campaign.
A long-time advocate of tougher campaign-finance laws, Democracy 21 President Fred Wertheimer, said he was disappointed with Obama's decision.
``We do not agree with Senator Obama's rationale for opting out of the system,'' Wertheimer said. “Senator Obama knew the circumstances surrounding the presidential general election when he made his public pledge to use the system.”
Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey, said Obama can afford to take the hit.
“Reform and ethics are not the issues that will decide this election, economics and foreign policy will,” he said.
Obama said he was concerned about combating a parallel campaign by independent organizations operating outside control of the candidates, which have taken on a bigger role on both sides in the last two presidential campaigns.
McCain is “not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations,” Obama said.
McCain has decried the spending and attack ads by such groups and has promised to speak out against those campaigning on behalf of Republicans.
“Anyone who believes they could assist my campaign by exploiting a loophole in campaign-finance laws is doing me and our country a disservice,” McCain said in November.
(Source: Bloomberg)