McCain's Campaign Financing Hypocrisy

There's a lot of interesting traffic around this. Since it makes sense for Obama from simply a numbers standpoint to sidestep the limitations associated with public financing, I have to wonder why, other than shear jealousy, people are making such a big deal about this. Still, I kind of need someone to explain some of the history of this to me, because, as a convenient excuse, I wasn't living here at the time.

From The New York Times in February of this year, "McCain Loan Complicates Financing of Campaign":
Mr. McCain sent a letter to the commission on Feb. 7 saying he had decided to decline the matching money for his primary campaign. His request for public money, in which the government matches campaign contributions, was made last year as the campaign was running out of cash.

After his fortunes began to rise from his victory New Hampshire and campaign gifts increased, however, Mr. McCain decided against taking the public money. Taking it would have limited his spending between now and the Republican convention in September to $40 million.
From The Jed Report, "McCain Campaign Lied to Reporter About Public Finance Loan":
Late last year, the FEC approved $5.8 million in public funds for John McCain's presidential campaign. That sounds simple enough, but there's a hitch: even though the money was approved in December, it wasn't actually scheduled to be disbursed until March.

Therefore, if McCain wanted to use the money, he need to take out a loan from a bank, using the FEC's approval as collateral. Such loans are standard operating procedure. (John Edwards did exactly this.)

McCain, however, wanted to preserve the option of not participating in the public financing system, so on December 20 (that date is important) his spokesman told Politico's Ken Vogel that he hadn't taken out any such loans.
Campaigns have traditionally taken out bank loans against FEC certifications of matching funds like the ones issued Thursday. ... McCain, an Arizona senator, has “not made a decision on matching funds,” said spokeswoman Jill Hazelbaker, who added the campaign hasn’t borrowed against anticipated matching funds.
So to recap so far:
  1. McCain was authorized for $5.8 million in public funds
  2. If he wanted access to any of that before March, he needed to take out a loan using the funds as collateral.
  3. On December 20, 2007, a McCain spokesman told a journalist that McCain had not taken out any loans using the funds as collateral.
Here's where the lie comes in: John McCain did take out a loan using the funds as collateral, and he took it out before December 20, 2007. The Washington Post broke the news in mid-February (h/t: Mark Schmitt):
John McCain's cash-strapped campaign borrowed $1 million from a Bethesda bank two weeks before the New Hampshire primary by pledging to enter the public financing system if his bid for the presidency faltered, newly disclosed records show.
The original loan agreement (h/t: Mark Schmitt) is dated November 24, 2007. On December 17, 2007, another $1 million was added to the loan -- using public funds as collateral. Here's the key part of the agreement:
Borrower will...grant to Lender, as additional collateral for the Loan, a first priority perfected security interest in and to all Borrower's right, title and interest in and to the public matching funds program.
You cannot get any more clear than that. According to the amended agreement, John McCain used public funds as collateral for the loan. The amendment was dated December 17 and was signed by Rick Davis, his campaign manager, on December 18.

Yet two days later, the McCain campaign spokeswoman told the media the campaign had entered into no such loan agreement.

So now the question is: where is the media's outrage at the McCain campaign's bald-faced lie about public financing?