$ource of Lally-Green election ads

Five weeks after the general election, its biggest mystery is still unsolved: Who spent more than $1 million trying to influence a race for the Pennsylvania Supreme Court?

In the final two weeks before the election, a Virginia-based organization called the Center for Individual Freedom (CFIF) bought about $1.2 million worth of television advertising, showering praise on Superior Court Judge Maureen Lally-Green, one of two Republicans seeking a spot on the state's highest court.

But the CFIF never registered with state officials as a political committee or filed any campaign-finance reports saying where its money originated.

Democrats cried foul, and state officials - including Attorney General Tom Corbett, a Republican - unsuccessfully asked Commonwealth Court to stop the TV spots.

Lally-Green lost the election in spite of the mysterious ad campaign. She finished third in the race for two seats, nearly 235,000 votes out of the money.

Next month, Republicans will lose control of the high court.

But the legal dispute over CFIF's activities is still going strong, and the controversy is shaping up as a fundamental challenge to Pennsylvania's campaign-finance laws.

Last week, CFIF's lawyers filed a motion in federal court, Philadelphia, accusing state officials of violating CFIF's First Amendment rights by disregarding a stipulated judgment that Corbett had agreed to in August.

The judgment, negotiated by Corbett and CFIF's attorneys, then signed by U.S. District Judge Anita B. Brody, appeared to settle a lawsuit filed by CFIF.

The suit contended that in light of recent decisions by the U.S. Supreme Court, Pennsylvania's longtime ban on political contributions by corporations and labor unions was too broad and vague, violating the First Amendment rights of a nonprofit corporation like CFIF.

Under the stipulated judgment, the court declared that the Pennsylvania law defining political expenditures would apply only to spending for "express advocacy" as defined in a landmark U.S. Supreme Court case in 1976 - actions that specifically urged the election or defeat of a candidate, using clear and specific words like "elect," "defeat," or "vote for."

The CFIF's 30-second spots for Lally-Green referred to the judge as "cracking down on violent criminals" and "protecting children who are victims of abuse." The ads said she had been praised by "state law enforcement," "the legal community" and "one state newspaper."

But the ads never mentioned the impending election or used the words "elect" or "vote for."

Thomas W. Kirby, one of the Washington attorneys representing CFIF, told the Daily News that under the federal court's stipulated judgment, and the recent U.S. Supreme Court rulings, the ads were not political expenditures. Therefore, he said, CFIF was not subject to Pennsylvania's registration and disclosure requirements.

The CFIF lawyers asked Brody to stop Corbett and state election officials from taking any enforcement actions against CFIF.

And the group said it should be reimbursed for more than $20,000 in legal fees and expenses it spent defending its activities in Commonwealth Court.

Corbett's office did not return calls yesterday from the Daily News. *