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 yesterday 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 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.

Brock's group, which is supported by the pro-business U.S. Chamber of Commerce, said yesterday it planned 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 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, 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 refused in May to intervene, GOP activists joined the soft-money fray.

Kerry's presidential campaign last week filed a complaint with the Federal Election Commission accusing the Bush campaign and the Swift Boat Veterans for Truth of illegally coordinating the group's ads. The ads allege Kerry has lied about his decorated Vietnam War service; the group's accounts in a television ad have been disputed by Navy records and veterans who served on Kerry's boat.

Kerry is the subject of complaints by the Bush campaign and the Republican National Committee accusing his campaign of illegally coordinating anti-Bush ads with soft-money groups on the Democratic side, allegations he and the groups deny.

In other campaign-advertising related news:

Bush campaign lawyer helping anti-Kerry vets
An election lawyer for President Bush who also has been advising a veterans group running TV ads against Democrat John Kerry resigned today from Bush's campaign.

"I cannot begin to express my sadness that my legal representations have become a distraction from the critical issues at hand in this election," Benjamin Ginsberg wrote in a resignation letter to Bush released by the campaign.

"I feel I cannot let that continue, so I have decided to resign as national counsel to your campaign to ensure that the giving of legal advice to decorated military veterans, which was entirely within the boundaries of the law, doesn't distract from the real issues upon which you and the country should be focusing."

Ginsberg's acknowledgment last evening that he was providing legal advice to the Swift Boat Veterans for Truth marked the second time in days that an individual associated with the Bush-Cheney campaign had been connected to the group, which Kerry accuses of being a front for the Republican incumbent's re-election effort.

The Bush campaign and the veterans' group have said repeatedly that there is no coordination, and the campaign repeated that statement yesterday.

Lawyers on the Democratic side are also representing both the campaign or party and outside groups running ads in the presidential race at the same time.

Ginsberg's dual role has drawn attention because the swift-boat veterans group ran an ad accusing Kerry of exaggerating his Vietnam War record, an issue that has dominated the campaign since early August.

Earlier, Ginsberg said the swift-boat vets group "came to me and said, 'We have a point of view we want to get into the First Amendment debate right now. There's a new law. It's very complicated. We want to comply with the law, will you keep us in the bounds of the law?'" Ginsberg told the Associated Press. "I said yes, absolutely, as I would do for anyone."

Ginsberg said he never told the Bush campaign what he discussed with the group, or vice versa, and doesn't advise the group on ad strategies.

"They have legal questions and when they have legal questions I answer them," Ginsberg said. He contended that by offering legal advice to both the Bush campaign and the swift-boat group, he has done nothing different than other election lawyers in Washington, including attorneys for Kerry and the Democratic National Committee who have also advised soft-money groups. Representing campaigns, parties and outside groups simultaneously is legal and allowed under the law and by the FEC, he said.

"The truth is there is only a handful of lawyers who live and breathe this law. And so because the coordination rules do not include legal services among the prohibited coordinated activities, we provide legal service," Ginsberg said.

Larry Noble, head of the nonpartisan Center for Responsive Politics campaign watchdog group and former FEC general counsel, said it was true that serving as a lawyer for both a campaign and a soft-money group isn't considered automatic evidence of coordination under commission rules, but added that it doesn't mean the FEC won't look at the situation.

Joe Sandler, a lawyer for the DNC and a group running anti-Bush ads, MoveOn.org, said there was nothing wrong with serving in both roles at once.

On Aug. 21, retired Air Force Col. Ken Cordier resigned as a member of the Bush campaign's veterans' steering committee after it was learned that he appeared in the swift-boat veterans' commercial.

Pressuring broadcasters not to air ads
When a Republican-funded group of Vietnam veterans sought to run a blistering television ad accusing John Kerry of lying about his decorated war record, Democrats quickly fired off a letter to broadcasters imploring them not to air the "inflammatory, outrageous lie."

The goal: to get as many stations as possible to reject the ad and stymie potential damage from it.

It's a dance that happens often in political advertising. Republicans and Democrats try to get broadcasters to block each other's commercials by providing evidence countering claims in the spots. Sometimes they succeed and ads get pulled or changed. More often they don't and commercials are run even with questionable material.

Unlike ads by outside groups, candidates can say whatever they want to in ads and stations must run them.

That's the case with a new spot Kerry rolled out that says Bush's campaign "supports a front group attacking John Kerry's military record," a reference to Swift Boat Veterans for Truth. Bush's campaign complained that the Kerry ad contained a "false and libelous charge." Stations didn't have to run the veterans' ad; they do have to run the Kerry campaign's ad responding to it, despite the Bush campaign's objections.

Broadcasters have a right to turn down other political ads that don't meet truth-telling standards followed by commercial advertisers like Pepsi, Toyota and Nike. Stations leave themselves open to lawsuits if non-candidate political ads contain potentially libelous content.

"It's basically up to the individual broadcaster to decide whether that third-party advocacy ad is appropriate for their audience," said Dennis Wharton, a National Association of Broadcasters spokesman.

Still, stations rarely reject commercials — even ones with fuzzy claims. They have little incentive to: they don't get paid for ads that don't run, and they very rarely are sued.

"If the system worked, the sleaze wouldn't get on the air," said Kathleen Hall Jamieson, a political ad expert at the University of Pennsylvania's Annenberg School for Communication.

Lawsuits take time and money, neither of which the campaigns have to spare. And, proving defamation of character, slander or libel is extremely difficult when the person attacked is a public figure.

So, campaigns often settle on urging stations to reject an ad — while publicly objecting to its content.

"There are incidents where candidates object every cycle and stations do pull ads," said Trevor Potter, a former member of the Federal Election Commission. "But there aren't a huge number of them pulled."

Still, stations require political parties and interest groups to back up statements in ads. The opposing side often sends its own documents rejecting the charges and reminding TV stations of their overriding duty as broadcast license holders "to protect the public from false, misleading or deceptive advertising."

Often, documentation from the ad sponsors, whether accurate or not, is all a station needs to put an ad on the air. Sometimes, the station has its lawyers review the material before going forward.

Anticipating a challenge to its first ad, Swift Boat Veterans for Truth sent 28 stations in Ohio, Wisconsin and West Virginia a 12-page background document and 64 pages of material supporting the ad's claims, including affidavits.

Lawyers for Kerry and the Democratic National Committee quickly faxed an objection letter to the stations, pointing out that questions were being raised publicly about claims made by veterans.

The group says two stations didn't run the ad. A couple of others hesitated.

Jeff Armstrong, a station manager for Wisconsin's WLAX and WEUX, said the publicity about potential problems with the ad prompted them initially to refuse the commercial. But, he said, they "had a change of heart" after other stations aired it.

Another station, WEAU, an NBC affiliate, waited a day for its lawyers to sign off on the ad, said Steve Lavin, the station's general sales manager.

Sometimes, one side can get stations to force the other side to change an ad. In January, the Republican National Committee challenged an ad by an arm of MoveOn.org. It said: "Bush sided with the drug companies who had given him huge contributions." Attorney Charles Spies said in a letter to stations in Ohio, Florida and other states that the ad "falsely and maliciously" accused Bush of "committing a federal crime."

"No drug company has ever given a contribution" to Bush because "corporate contributions to federal political campaigns have been legally prohibited for close to 100 years now," Spies wrote.

The RNC says MoveOn had to change the spot before several stations would air it.

Bush attacks '527' groups
Sen. Russ Feingold, D-Wis., said on Aug. 23 that President Bush had distorted the McCain-Feingold campaign finance reform law when he said the legislation was aimed at eliminating so-called "527" ads by outside groups.

Bush made the comment in reference to an ad that accuses Democratic presidential candidate John Kerry of lying about his combat record in Vietnam, as well as those critical of the president himself.

"I don't think we ought to have 527s," Bush said, referring to groups that spend millions of dollars of unregulated money on political advertising. "I think they're bad for the system. That's why I signed the bill, McCain-Feingold."

Bush said he thought he had "gotten rid" of that kind of unregulated money in politics when he signed the bill into law two years ago.

"The President's remarks concerning his signing of the McCain-Feingold bill lack candor at best," Feingold said in a statement.

"The McCain-Feingold bill dealt only with political party soft money and phony issue ads run within 60 days of the general election, not with the so-called 527 groups. The President knew that."

Feingold co-authored the campaign finance legislation with Sen. John McCain, R-Ariz.

Feingold said the Federal Election Commission should regulate the 527 groups as political-action committees as established by a 1974 law.

"527 groups that are dedicated to defeating the President or Senator Kerry should be registering as federal political committees and abiding by the contribution limits that apply under federal law," Feingold said.

Bush campaign spokeswoman Merrill Hughes Smith issued a statement saying the campaign "agrees with Sen. Feingold that the irresponsible soft money activity by 527s needs to be stopped, and we hope that Sen. Kerry will join us in this."

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.