Aug. 24 (Bloomberg) -- Federal Election Commission Chairman Bradley Smith defended the right of Swift Boat Veterans for Truth, an independent political group, to run commercials against Democratic presidential nominee John Kerry, who complained to the commission about the ads.

Kerry, 60, a four-term Massachusetts senator, alleged last week that the Swift Boat Veterans For Truth illegally coordinated its activities with President George W. Bush's re-election campaign. Smith, a Republican, said members of the group are exercising their constitutional right to free speech.

``I think it's great we live in a country where 260 average guys can go out and put their point of view out there before the public and influence a major presidential race,'' Smith said in an interview with Bloomberg television. ``I am not one who agrees it is illegitimate for citizens to take a stand on these kind of issues and only the politicians should be able to say what they want about the issues they want to talk about.''

It is unlikely the FEC will rule on Kerry's complaint before the Nov. 2 election, Smith said.

In May, Smith voted with the majority in a 4-2 vote to put off a decision on regulations that would make it more difficult for groups such as Swift Boat Veterans for Truth to solicit unlimited donations. Republican National Committee Chairman Ed Gillespie at the time said the decision was ``irresponsible'' and ``sets the stage for a total meltdown of federal campaign finance regulation.''

Ohio, Wisconsin

The Swift Boat group ran ads earlier this month in Ohio, Wisconsin and West Virginia saying Kerry didn't deserve the three Purple Hearts for being wounded and the Silver and Bronze Stars for valor awarded to him by the U.S. Navy for his service in Vietnam. They cite their own recollections of events to dispute Navy records from the time the medals were approved 35 years ago.

Other veterans who served with Kerry defend him, including Chicago Tribune editor William Rood, a former Swift Boat officer, Jim Russell, a former Navy lieutenant, and Jim Rassmann, a former U.S. Army Green Beret.

Kerry, in New York, declined to comment today on the attack ads. ``I am talking about the economy, jobs, health care -- the things that matter to Americans.''

The Bush campaign said a member of its National Veterans Steering Committee, former Air Force Colonel Ken Cordier, appears in a commercial for Swift Boat Veterans for Truth. The Bush campaign did not know in advance that Cordier was working for both Bush and the veterans group, said Steve Schmidt, a spokesman for Bush's campaign.

`A Little Bit Absurd'

``For the Kerry group to be complaining'' when Democratic donor-funded groups have raised much more ``seems a little bit absurd,'' said Smith, who was appointed by former President Bill Clinton, a Democrat.

U.S. law bars coordination between candidates and independent organizations, also known as 527 groups for that section of the Internal Revenue Service code that grants them tax- exempt status. The independent groups are not subject to campaign finance restrictions candidates must follow.

Bush yesterday denounced all campaign ads by independent groups, including the Swift Boat Veterans for Truth. He stopped short of calling on the group to immediately stop advertising.

The Swift Boat Veterans group is spending $1.1 million on ads attacking Kerry. Of that, $550,000 was spent on the spots that ran earlier this month in Ohio, Wisconsin and West Virginia, said spokesman Sean McCabe.

The group listed 10 financial backers in its June 30 filing with the Internal Revenue Service. More than 10,000 new donors gave more than $450,000 in the last two weeks, McCabe said.

Seven

Seven of the 10 supporters listed with the IRS are Republicans, according to PoliticalMoneyLine. Among them is Bob Perry, the largest political donor to Republicans in Texas, who provided $100,000. Perry, chief executive officer of closely held Perry Homes in Houston, has declined to be interviewed.

Seventeen of the top 20 groups operating under the 527 code active in the presidential election support Democrats and are funded by donors with ties to the Democratic Party. In all, they've raised at least $133.1 million, according to Internal Revenue Service records compiled by PoliticalMoneyLine. The three Republican groups raised $15.5 million.

Kerry is running his own ads to defend his record against the Swift Boat Veterans for Truth, which he said is lying and is doing Bush's ``dirty work.''

Bush said yesterday that Kerry ``ought to be proud'' of his Vietnam War record and condemned campaign television commercials sponsored by independent groups such as the Swift Boat Veterans for Truth and Democratic donor-backed groups such as MoveOn.org and the Media Fund.

Rove

Bush political adviser Karl Rove told the New York Times through a spokeswoman that he and Perry were longtime friends, though they had not spoken for at least a year. Rove and Perry have been associates since at least 1986, when they both worked on the gubernatorial campaign of Bill Clements, the Times said.

John O'Neill, a member of Swift Boat Veterans, debated Kerry on the Dick Cavett Show in 1971. O'Neill was enlisted by President Richard Nixon and then-White House counsel Charles Colson, who later went to prison for his role in the Watergate scandal that led to Nixon's 1974 resignation.

Senator John McCain, a Republican from Arizona and former Vietnam prisoner of war, two weeks ago called the Swift Boat group's ad dishonest and urged the White House to condemn it.

Bush, asked by reporters yesterday about the Swift Boat ad, said he was ``disappointed'' with ``that ad, every other ad'' funded by independent groups that are not subject to the limits on federal financing that both the Bush and Kerry campaigns must adhere to.

Schmidt, Bush's spokesman, said Kerry had benefited from ``$64 million in attack ads by shadowy 527 organizations.''

Lieutenant Mike Kakfa, a U.S. Navy spokesman, declined to comment on any of the issues regarding Kerry's time in Vietnam.

To contact the reporter on this story: Michael Forsythe in Washington mforsythe@bloomberg.net

Last Updated: August 24, 2004 17:44 EDT