April 25 (Bloomberg) -- Members of the U.S. Supreme Court signaled a willingness to give interest groups more power to air advertisements in the weeks before an election, an approach other justices suggested would gut a vital part of a 2002 federal campaign finance law.

The court today heard arguments on a law that says interest groups can use only regulated money, subject to contribution limits and disclosure rules, to run ads that mention federal candidates in the two months before a general election. The intent was to outlaw so-called sham issue ads run by unregulated organizations to hurt or help candidates.

``What do you make of the fact that there are so many advocacy groups that say this is really impractical?'' Justice Samuel Alito asked an attorney defending the law.

The justices are weighing whether a Wisconsin anti-abortion group had a right to run three 2004 broadcast ads that criticized U.S. Senate efforts to block votes on judicial nominees and mentioned Democratic Senator Russ Feingold, who was up for re- election. The court is also considering striking down the entire provision governing pre-election ads.

Wisconsin Right to Life Inc. says its radio and television commercials must be exempt from the ban because they were ```grassroots lobbying ads'' and weren't directed toward Feingold's ultimately successful re-election bid. The group, which also opposes euthanasia and embryonic stem cell research, pulled its ads after three weeks because of legal concerns.

Influencing Voters

An appeals court in Washington, voting 2-1, sided with the group, saying the ads weren't intended to influence Feingold's election and the federal government hadn't spelled out a good reason for limiting the Wisconsin group's free-speech rights.

The Supreme Court has said lawmakers can restrict election- related spending in the name of preventing corruption, protecting the integrity of the voting process and preserving public confidence in the government. Justices David Souter, Ruth Bader Ginsburg, Stephen Breyer and John Paul Stevens today suggested that the context of the ads run in election season may make them improper.

Breyer said a decision in favor of Wisconsin Right to Life would essentially invalidate the 2002 law sponsored by Republican Senator John McCain of Arizona and Feingold of Wisconsin. The law made it illegal for unions and corporations to make unlimited political donations or run certain ads funded from their general treasuries in the 30 days before a primary or 60 days before a general election.

``If we agree with you in this case, goodbye McCain- Feingold,'' Breyer said.

Next Election

A change in the law would affect the power of interest groups in the next presidential election. Instead of relying on political action committees, which have donation limits and disclosure requirements, a union, company or other interest group would have access to a much greater well of funds for ads.

Alito asked today how long the blackout periods -- banning candidate ads -- would be in the presidential election. Because of overlapping markets, a blackout period might run as long as 200 days, Justice Antonin Scalia said.

``This is the First Amendment. We don't make people guess whether their speech is going to be allowed by Big Brother or not,'' Scalia said. ``You need a clear First Amendment line.''

The case marks the third time the Supreme Court is reviewing the so-called electioneering provision. In 2003, the court upheld the ban as part of a broader ruling that backed the campaign finance overhaul. Three of the court's current justices -- Scalia, Clarence Thomas and Anthony Kennedy -- dissented, saying the ban was unconstitutional.

Last year the court clarified that ruling by saying it didn't prevent Wisconsin Right to Life from challenging the applicability of the restriction to particular ads.

`Dumb' Voters?

The group's lawyer, James Bopp, said the ads were intended to lobby Feingold, not to influence voters. Feingold had supported filibusters to block President George W. Bush's judicial nominees.

Souter bristled when Bopp said voters didn't see the ads as a call to vote against Feingold because the commercials didn't directly say that the senator supported the filibusters. Bopp argued that ``there's absolutely no evidence that anyone in Wisconsin knew his position on the filibuster.''

``You think they're dumb?'' Souter asked. ``Nobody's paying attention to what the senator is doing?''

Stevens questioned whether swaying Feingold was a realistic goal, given his longstanding support for filibusters.

Shifting Position

Bopp responded that Wisconsin's other senator, Democrat Herb Kohl, shifted his position after the group ran similar ads in 2006. ``People's positions are affected by grassroots lobbying, and at least people should have the opportunity to engage in grassroots lobbying,'' Bopp said. That answer drew support from Kennedy.

``Is that called democracy?'' Kennedy said.

U.S. Solicitor General Paul Clement, the Bush administration's top courtroom lawyer, said today the ads were clearly meant to affect the election. ``These ads were really concentrated in the close districts,'' he said.

Chief Justice John Roberts aimed a number of questions at Clement, at one point saying his argument ``is inconsistent with our decision last year'' that permits specific challenges to funding restrictions.

The cases are Federal Election Commission v. Wisconsin Right to Life, 06-969, and Federal Election Commission V. Wisconsin Right to Life, 06-970.

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net; Greg Stohr in Washington at gstohr@bloomberg.net.

Last Updated: April 25, 2007 14:03 EDT