Members of Kerry Ad Team Quit

WASHINGTON – A financial dispute between Democrat John Kerry's (search) campaign and a key part of his ad-making team has led to a shakeup.

Jim Margolis said Friday that his Riverfront Media/GMMB (search) firm will no longer produce commercials for the campaign because of "proposed contract changes." A firm headed by Kerry adviser Bob Shrum (search), which has shared duties with Margolis, will take on a broader role in the campaign, officials said.

"We have been honored to help produce the spots and assist in developing the strategy that helped him secure the Democratic nomination. However, due to proposed contract changes, we could not come to an understanding that we regarded as workable," Margolis told The Associated Press.

"While we will continue to provide media placement services for the campaign, our strategic and advertising responsibilities will end," he said. "We know that John Kerry will go on to win in November and that he will make a great president of the United States."

Margolis refused to elaborate, but officials involved in the contract talks said the campaign sought a reduction in the firm's reimbursement rates that Margolis found unacceptable.

Kerry campaign manager Mary Beth Cahill said in a statement, "Jim Margolis (search) and his colleagues at the firm have made an extraordinary contribution to John Kerry's success. We're disappointed that they won't continue in that role, but pleased that his firm will continue to provided the best television placement in the business."

Shrum, a prominent strategist who has advised Sen. Ted Kennedy, D-Mass., and scores of other Democratic leaders, clashed with Cahill's predecessor, Jim Jordan, who hired Margolis and pollster Mark Mellman (search). Even while Kerry wrapped up the Democratic nomination and unified the party, tensions bubbled beneath the surface.

Campaign officials said Shrum's firm will fill the void left by Margolis, at least for now. The campaign may reach out to other ad firms.