Straight Talk and Cold Cash
But his new position moved him closer to that of most high-tech companies—businesses that have long given him campaign support. In 1999 and 2000, Microsoft and its employees donated $40,000 to McCain, according to the Center for Public Integrity study.
In the past decade, Internet and software companies have donated $394,000 to McCain, the center said. McCain's aides say the software industry actually wanted no controls on exports and that McCain felt he had to compromise—with the Protect Act—and back off his no-export position. They say that his compromise addressed crucial national security concerns that the technology could end up in the hands of terrorists. Faced with McCain's turnaround and a growing movement in Congress for export relief, the Clinton administration finally eased restrictions in January 2000.
McCain has been running for president for nearly a decade, using his pac, Straight Talk America, his Senate campaign, Friends of John McCain, and the Reform Institute to help him along the way. Like other candidates, McCain has been quite adept at legally exploiting campaign laws to aid his presidential ambitions. With his eye on the White House, McCain raised far more than he needed to win his last two Senate campaigns in 1998 and 2004. McCain took in $7.8 million from individuals and PACs in those campaigns, yet spent only $4.6 million to overwhelm weak opponents. Most of the rest of the cash—$3 million, or 38 percent—was transferred into his presidential races, federal campaign records show.
In McCain's current presidential campaign, this so-called rollover means that some givers in effect will exceed the current contribution limits for individuals, now $2,300 per election. McCain asserts that many donations came in before it was clear who his opponents would be or what the campaign costs would be, and he staunchly maintains that he did not raise the cash under false pretenses.
As for the Reform Institute, a lobbyist who knows McCain well says bluntly: "The Reform Institute is McCain's Achilles heel." Engaging in political activity would have violated the institute's tax-exempt status, but McCain, campaign aides, and institute officials all deny that the organization has played any role in promoting his presidential candidacy.
The institute, established in 2001, kept McCain front and center as it promoted campaign finance reform in its many press releases and fundraising letters. Moreover, the institute was run for several years by Richard Davis, manager of McCain's 2000 presidential effort and CEO of his current campaign. The institute operated for a time out of Davis's lobbying offices in Alexandria, Va. Its chief fundraiser was Carla Eudy—the same Carla Eudy who has served as the chief fundraiser for McCain's Straight Talk America, Friends of John McCain, and his presidential committees. The institute's lawyer, Trevor Potter, also represents McCain's political organizations. Moreover, many of the big donors to the institute were large contributors to McCain's political races, campaign and institute records show.
Eudy declined to be interviewed but said in a statement that McCain had "signed fundraising letters" for the Reform Institute that were mailed to people on the fundraising lists of the Friends of John McCain and Straight Talk America. It is, she said, "perfectly legal" for a political committee to raise funds for a tax-exempt group. Eudy added that the Reform Institute's own mailing list "was never ... used for any political purpose."
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