The Democratic National Committee announced Tuesday it will sue next week in U.S. District Court. It will ask the court to order the Federal Election Commission to examine, within 30 days, the legality of McCain's decision to reject $5.8 million taxpayer funds.
By turning down the money, the presumed Republican nominee was able avoid strict spending limits between now and the GOP's national convention in September.
The DNC filed a complaint with the FEC in February. But the six-member FEC has been unable to act because it doesn't have a quorum. Four nominees are awaiting Senate confirmation.
A federal judge threw out an earlier DNC lawsuit noting that federal rules permit the FEC up to 120 days to act on a complaint. That deadline expires next Tuesday.
At issue is $4 million line of credit that the McCain campaign obtained late last year. While the loan was not secured by the promise of public funds, it required McCain to reapply for public funds if he lost early primary contests and to use that money as collateral.
In a complaint filed with the FEC in February, the national Democratic Party argued that the arrangement violated federal regulations — a claim McCain's campaign and his bankers adamantly deny.
FEC Chairman David Mason in February asked McCain to explain the terms of the loan and informed McCain that he would need approval from the full FEC before withdrawing from public financing. McCain's campaign said they did not need such approval.
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