That's been in the news for a while (don't you listen to NPR's "Morning Edition" in the morning

).
One of McCain's advisers, Trevor Potter, is a former FEC chairman. Potter advised McCain to apply for the public financing through the FEC and
then get a loan for private campaign money. McCain was approved (or "certified") for the public money, but never touched it.
With his certification in place, he then went to Fidelity & Trust Bank to get his loan. The trick is that they did not "officially" use the public money as collateral for the private loan, but the bank required him to reapply for public funding if he lost the early primaries. The assumption here is that if he lost the early primaries then he could reapply and use the public financing money to pay his debt. I am not a lawyer, but IMO his FEC certification was a key component in getting the loan.
As of Feb 6, McCain wants out of his public financing agreement which he can do as long as (1) He has not used the funds and (2) He did not use the funds as collateral for a loan. Now, (2) is the rub, isn't it? Did he use the funds as collateral? Or did Potter's legal slight of hand work?
To add more confusion to this all, the FEC cannot do a darn thing because there are 4 vacancies on the board and the the Democrats in the Senate have been fighting over one of the nominees to the board. The Republicans want all their nominees to be voted on at one as a package (all OK or all not OK) and Democrats want to vote for them individually. It seems odd that they would not be voted on individually. But ... in the meantime the FEC can't really do a thing without a quorum and those missing members. They can't rule on McCain's request to withdrawal from public funding (although Potter thinks they don't need to meet at all, of course). They also cannot meet to discus the Democrat's objection to McCain's request to withdrawal.
I find this whole thing very interesting. I think it's another nail in the coffin of the "Straight Talker" John McCain that used to be. The one that didn't cozy up with lobbyists and who believed in finance reform.