AUGUSTA – What one national group has called the mother of all campaign finance law loopholes – one that would be closed by a reform bill passed in the House this week – is being used in Maine for the first time.

While limits do exist on how much can be donated to a candidate’s primary campaign committee, the “loophole” is a provision that legally allows unlimited contributions to a political action committee that is affiliated with the candidate but not directed by that candidate.

Supporters of the legislation passed by the House on Thursday say the measure would help clean up the nation’s political campaigns by banning soft money contributions, the unlimited donations that unions, corporations and individuals make to political parties and committees.

Though U.S. Senate hopeful Chellie Pingree has campaigned in favor of the reforms, the Democrat has taken advantage of the current law through an affiliated political action committee that has raised at least $150,000 for her campaign.

“That should cause concern to the voters because of course they don’t know the true source of money in the elections and the ultimate goal is to affect their vote,” said Sheila Krumholtz, research director at The Center for Responsive Politics, a Washington-based watchdog group.

Pingree counters, however, that her decision to use the fund-raising mechanism she would like to outlaw was triggered by her concern that there will be large independent expenditures against her by groups such as the pharmaceutical industry.

The establishment of these separate affiliated campaign committees such as Maine Senate 2002, which was set up for Pingree, is perfectly legal. In the 2000 elections, several candidates such as Sen. Hilary Clinton, D-N.Y., used an affiliated campaign committee to funnel millions of dollars into supporting her election effort.

The only limit on how such soft money can be used by campaigns is that any advertising cannot promote or attack any candidate by name.

“You can’t say vote for or vote against somebody,” Krumholtz said during an interview earlier this week. “But the studies show voters know that is the message. They are often thinly veiled campaign ads or direct mail and the message is clear to the voters, even without the use of the express phrase of vote for or vote against.”

So far, Pingree, a former state senator from North Haven, is the only candidate in Maine with such an affiliated committee.

“My big fear, honestly, in this campaign is independent expenditures from people and institutions I have made enemies of because of my work in the Legislature,” Pingree said. “That is a very tough thing to combat.”

Pingree was an advocate for the Maine Rx prescription drug program that has been bitterly opposed by the drug industry. She also supported health care proposals that drew opposition from health insurance companies.

“I need to have the resources to respond to those ads,” she said. “And I am pretty sure they will be coming.”

The pharmaceutical industry spent about $35 million nationally on commercials in 2000 to help elect candidates – mostly Republicans – who supported their positions, and to defeat their opponents.

With similar expenditures anticipated this election year, Pingree could need considerable financial help to counter the drug industry’s ads.

Maine is no stranger to independent expenditures by groups seeking to help or hurt a candidate. In 1996, for example, several political action committees ran such ads in the U.S. Senate campaign as well as in the 1st Congressional District race.

Under current federal rules, a supporter can donate a maximum of $2,000 to a candidate’s principal campaign committee – $1,000 in the primary and $1,000 in the general election.

By Dec. 31, the last Federal Elections Commission reporting date, Pingree had raised nearly $1.1 million through her principal campaign committee. Her opponent in the Democratic primary, Robert Dunfey of York, had raised $109,000 and incumbent GOP Sen. Susan Collins had raised $1.4 million.

As of Jan. 31, Pingree had raised an additional $150,000 through her affiliated campaign committee, according to documents filed with the Internal Revenue Service. The IRS documents show that Maine Senate 2002 recorded donations of:

. $20,000 from Sally Englehard Pingree of New York City, Chellie Pingree’s former sister-in-law.

. $20,000 from Cyrus Hagge, a Portland contractor.

. $20,000 from Donald Sussman, a multimillionaire financier with a summer home on Deer Isle.

. $21,000 from Harvey Picker, chairman of Wayfarer Marine Corp., one of Camden’s largest employers.

. $5,000 from Daniel Crewe, a Portland businessman.

An additional $64,000 recorded in the IRS report did not need to be itemized and was not.

Collins said she shares Pingree’s concerns about the independent expenditures in the campaign and would like them banned, but said politicians need to lead by example.

“We keep trying to improve our campaign finance laws,” she said, “but frankly, there is always going to be some loophole that somebody will find and exploit. It is up to candidates to show some voluntary restraint.”

Collins also said the only independent expenditures so far in this campaign have been aimed at her. She said labor organizations have run “negative attack ads against me.”

The senator, who so far has no Republican opposition for re-election, said, “Despite what I expect to be an influx of negative ads distorting my record in this campaign, I choose not to create a committee that I felt was exploiting a loophole in the current laws.”

Dunfey defended Pingree’s decision even though he has not followed her lead in using the affiliated campaign committee.

“I think it is smart,” he said. “These are legal and you have to run your campaign under the existing law, not what you want the law to be.”

Dunfey said he has no current plans to set up another campaign committee but is keeping “all his options open.” He does not believe campaign financing will be an issue in the primary because both candidates support at least the provisions of the McCain-Feingold legislation that was approved in the U.S. Senate last year.

Longtime observers of Maine politics are split over the issue and its potential impact on the Senate contests. Bates College professor Douglas Hodgkin said the loophole should be closed and that Pingree is being hypocritical to advocate for reforming the campaign finance laws while using one of the loopholes in the law to help her candidacy.

“Voters don’t know about this, don’t think about this unless it is brought to their attention,” he said. “So its impact depends on what the candidates do with the issue and how it plays in the media. It certainly seems hypocritical to me.”

But Colby College government professor Sandy Maisel said as long as the committees are legal, Pingree would be stupid not to set one up and use it to raise as much money as possible for the race that likely will see “huge” independent expenditures.

“I think the law is a bad thing, but I don’t think [former state] Senator Pingree using the law to get the money she needs to challenge an incumbent is a bad thing,” he said.

Bowdoin College professor Chris Potholm said Pingree has made a mistake by setting up the committee and giving both Dunfey and Collins a target.

“Here’s a person who says she is for campaign finance reform and here she is taking advantage of what one national group has called the mother of all campaign loopholes,” he said. “This can hurt her by undercutting her credibility.”

But University of Southern Maine political science professor William Coogan doubts efforts to make the fund-raising committee an issue will work in the state. He said most Mainers do not care about campaign finances as an issue.

“Political scientists and reporters may care,” he said, “but this whole issue is too complicated for most voters to understand. I don’t think it will have much impact because the candidates in the fall will have the money to get their message to voters and whether they agree with that message is what determines how most people will vote.”

The primary contest between Pingree and Dunfey is in June. The winner faces Collins next November.