http://www.nytimes.com/aponline/washington/AP-McCain-Spending.html?_r...

WASHINGTON (AP) -- The Federal Election Commission voted unanimously Thursday to belatedly approve Republican presidential candidate John McCain's withdrawal from public financing for the primaries -- a move that spared him potential embarrassment on one of his signature issues.

The decision means McCain is not bound by the spending limits that restrict candidates who do accept primary season matching funds.

Had the commission rejected McCain's withdrawal from the system, any money he spent this year in excess of those spending limits would have been in violation of the law and could have been subject to a fine. Such a violation would have been an embarrassment for McCain, because he has been a strong advocate of campaign spending controls.

The commission, however, did not specifically vote on an underlying question raised by the panel's chairman and Democrats: whether McCain used the promise of public funds to secure a loan to his campaign late last year.

The action does not affect McCain's decision to obtain $84 million in public financing for the general election.

The FEC rejected McCain's argument that he did not need the FEC's approval to withdraw from the public system.

McCain had qualified last year for public funds for the primaries, but decided not to accept them because he wanted to spend above the limits. Then-FEC Chairman David Mason informed McCain that he needed an FEC vote to approve his withdrawal and asked McCain to explain the loan terms. At the time, the FEC did not have a quorum to act.

Previous FEC actions have indicated that a candidate cannot withdraw after he or she has accepted public money or has used it as collateral for a loan. McCain's loan agreement did not pledge the public funds as security but said that if McCain rejected matching funds and then lost an early primary, he would have to reapply for public money to pay off the loan.

A majority of commissioners appeared to agree that McCain's lawyers had carefully structured the loan to avoid using the public funds as collateral. But two commission Democrats voiced reservations.

Commissioner Cynthia Bauerly called the loan agreement ''murky.'' And Commissioner Ellen Weintraub added: ''I have a lot of problems with the way this loan was written,'' she said. Both voted to let McCain withdraw.

The Democratic National Committee had asked commissioners to put off the vote until the FEC investigates a Democratic Party complaint filed in February accusing McCain of violating public finance laws in connection with the matching funds.