'Shadow Parties' Come Into the Light

WASHINGTON – This was supposed to be the first election that reined in the big political money used to underwrite past negative attacks, but outside groups have exploited the nation's new campaign finance law to raise millions for hard-hitting commercials.

Tax-exempt groups have run ads questioning President Bush's stewardship and putting John Kerry on the defensive about his medal-winning service in Vietnam. A new group surfaced Tuesday to take aim at vice presidential nominee John Edwards' ties to trial lawyers.

From January 2003 through last June, so-called 527 soft-money groups (search) raised roughly $268 million and spent $291 million, according to figures compiled by the Political Money Line tracking service. Campaign watchdogs call many of these groups "shadow parties" because they conduct activities the political parties used to finance using corporate and union donations and unlimited contributions known as soft money.

Those running the outside advertising campaigns say Congress passed up the chance to outlaw their spending when it enacted the new campaign finance law back in 2002, and they say political leaders now shouldn't complain about the consequences.

"I guess I resent deeply the hypocrisy in all of this and people passing that law and now whining about the fact that both parties are trying to use that tool to defend their position," said former GOP chairman William Brock, who helped create the group known as The November Fund (search).

Brock's group, which is supported by the pro-business U.S. Chamber of Commerce (search), said Tuesday it plans to air ads within a month urging legal limits on lawsuit awards and criticizing trial lawyers, including Edwards.

While the 2002 law bans national party committees and presidential and congressional candidates from raising soft money, the Federal Election Commission (search) has ruled non-party political groups registered under section 527 of the IRS tax code may do so. The six commissioners disagree about the extent to which soft-money organizations can be involved in presidential and congressional races.

Democrats, trying to counteract the GOP's traditional multimillion-dollar fund-raising advantage, were the most aggressive early on in funding or setting up soft-money groups. They got a big lift from the likes of billionaire George Soros (search), who gave $12 million.

Such groups have spent millions of dollars keeping anti-Bush ads on television during periods when Kerry opted to stay off the air to save his limited campaign money.

The Bush campaign and the Republican National Committee initially pressed the FEC to ban such groups from spending in the presidential race. But when the commission declined in May to intervene, GOP activists joined the soft-money fray.

Bush this week called on soft-money groups in general to stay out of the presidential race. Kerry, meanwhile, accuses the Swift Boat Veterans, for Truth, a group airing ads against him, of lying about his Vietnam War record and has challenged Bush to ask that group to stop running ads.

It's not the first brush Bush and Kerry have had with outside groups.

In 2000, two Texas brothers financed soft-money ads criticizing Bush rival John McCain in the days before GOP presidential primaries in California, Ohio and New York. The ads promoted Texas Gov. Bush's environmental record and criticized that of McCain, an Arizona senator and a lead sponsor of the new campaign finance law. Bush won the primaries.

In the 1996 Senate race in Massachusetts, Kerry and Republican rival William Weld agreed to try to ban all soft money and independent ads from their race. Each promised to limit his spending and deduct any by outsiders supporting him from the total he would spend.

Kerry has said it's too late for such pledges in the presidential race.

"The cat's out of the bag now in this election," Kerry told The Associated Press in May.

Kerry said it didn't matter that Republican soft-money groups then had yet to get off the ground: "Well, that's their problem," he said.

Many GOP activists, too, now say it's too late to stop the spending.

Even if the candidates ask groups to back off, it is tough to keep outsiders from the race. The Supreme Court has long protected individuals' right to spend unlimited sums airing their views on candidates, as long as they do so independently.