A key campaign operative quit U.S. Rep. Bob Brady's mayoral campaign late yesterday, hours after acknowledging that he had advised others how to set up "independent" groups to attack Brady rival Tom Knox.

The aide, Ken Smukler, confirmed yesterday that in February, while working for Brady, he had contacted Frank Keel, a close adviser of labor leader John Dougherty, to create such a committee.

Smukler said he had also provided advice to former City Commissioner Alex Z. Talmadge Jr. - who, unlike Dougherty, is heading a group that vows to run anti-Knox TV ads.

Smukler's dramatic exit from the Brady campaign came on the same day that another stealth committee surfaced with TV ads slamming Knox.

Earlier yesterday, Smukler said in an interview that he had no regrets about his drive to create such groups and would do it again. By early evening, though, the campaign had announced Smukler's exit.

Kate Philips, Brady's spokeswoman, said Smukler had not told Brady of his efforts to create the groups. That was crucial: Federal law allows such so-called 527 groups to spend unlimited funds for or against a candidate only if their efforts are not coordinated with the candidate.

Philips said that Brady thought what Smukler had done was wrong. "Any appearance of impropriety is unacceptable," Philips said.

She added: "We were totally blindsided. It's disappointing but you just have to cut your losses and move forward."

The city's Board of Ethics has said it is looking into whether the Talmadge group is actually independent of Brady's campaign, as it contends.

Zachary Stalberg, who leads the Committee of Seventy, a nonpartisan group that monitors Philadelphia elections for fairness, said Smukler had no business engaging in those conversations. "It's wrong," Stalberg said.

Stalberg stressed that his group supported no candidate, but he said the spawning of independent groups meant that the city's limits on campaign donations could be ignored, and the donors behind such groups could remain secret.

Smukler could not be reached for comment last night after his resignation.

Earlier, Smukler - a veteran Democratic consultant in Pennsylvania - said he spoke with Keel and Talmadge, as well as "many others," about setting up independent committees. The "527" committees take their title from the section of the IRS code that governs them.

"I don't want you to think I am in any way embarrassed," Smukler said. "I believe as a political operative in this town I have every right to talk to anybody at any time about the potential - the potential - of a 527."

Had Keel founded a 527 group, Smukler said, he would have played no further role once it was up and running. Thus, he said, his actions would not run afoul of the law prohibiting such groups from coordinating with campaigns.

Stalberg rejected Smukler's distinction. "It's definitely improper," Stalberg said.

Apart from Talmadge's group, another 527 organization also has emerged. The group spent about $75,000 to purchase time for a 30-second TV commercial this weekend critical of Knox.

According to its IRS filing, the group, calling itself Working People for Truth, was set up Monday by a Washington, D.C., lawyer, Donald R. Dinan. He did not return messages yesterday, but his spokesman, Robert Bedard, said Dinan was acting independently.

Asked why Dinan had gotten involved, Bedard said: "He's a political activist with a deep background in Philadelphia. He went to college there."

According to official records, Dinan has donated $21,200 since 1993 to Democratic candidates, including Bill Clinton and Sen. Edward M. Kennedy.

The Knox camp yesterday demanded that the new ads be withdrawn.

News of Smukler's role surfaced yesterday in an odd way - when Keel barged into a news conference held outside City Hall by an anti-Knox activist, Jim Nixon. Nixon and a man in a shark costume have been lampooning Knox as a "loan shark." In 2000 and 2001, Knox ran a bank that made high-interest "payday" loans.

Nixon contended at his news conference that men from Dougherty's union had been stalking him.

Keel showed up to deny this - and counter with his own accusation. He told reporters that Smukler had met with him Feb. 9 to urge him to launch an anti-Knox 527 group. Keel contended that Smukler promised him up to $1 million to fund the group.

Smukler later confirmed the meeting - but said he had cited the $1 million figure only as an example of what such a group could raise from the public.

In a separate interview, Dougherty, of the electricians' union, said Smukler had asked his help, too, in forming such a group, and had said it could target Knox and another candidate, U.S. Rep. Chaka Fattah.

"I told him no," Dougherty said. "I told him it was a cowardly way to do politics."

Though once an ally of Brady's, Dougherty has become a constant critic of the longtime chair of the city Democrats.

For his part, Smukler said he had been paid by the Brady campaign fund in the month before Brady announced his candidacy, on Jan. 15.

Then, Smukler said, he switched to the payroll of Brady's congressional campaign fund, which paid him $10,000 a month. In that role, he said, he advised Brady on "D.C." matters - but also helped him prepare for mayoral debates and appearances.

His statements raised this question: Was the Brady mayoral campaign making improper use of Brady's congressional campaign funds?

Philips, Brady's spokeswoman, said the payments were "under review." If there was an issue, she said, "we'll rectify that."

Contact staff writer Craig R. McCoy at 215-854-4821 or cmccoy@phillynews.com.