• by March 7, 2001

(AP) - Special interest groups that flooded the airwaves with TV commercials before Election Day paid a stiff price as they attempted to influence the presidential election and other contests, according to a new report on political ad spending.

The report also noted that federal law requires TV stations to offer candidates their cheapest rates for ads, but they routinely wound up charging more - about two-thirds more than those rates - because they couldn't guarantee candidates those ads would stay in desirable time slots unless the candidates paid premium rates.

The fast-rising expenditures for political ads are related to several factors, including the robust economy of the late 1990s, rapid growth of unregulated soft money and a sharp increase in issue ads, said Paul Taylor, executive director of the Alliance for Better Campaigns. The group was releasing its report on Tuesday.

The issue ads are paid for with so-called soft money - unregulated donations by labor unions, corporations and individuals that cannot be used to directly aid candidates.

Candidates often don't take the lower-priced ads because they can legally be shifted to a less desirable time slot if someone offers more advertising money, said Taylor. Stations routinely steered candidates toward paying premiums for ads that could not be pre-empted, the report said.

"This is a law that was never designed particularly well," Taylor said. "The amount of money that political advertisers are spending on television is going through the roof."

Political candidates and groups spent more than $770 million on political television ads in 2000, Taylor said, saying some Wall Street analysts place the number closer to $1 billion. That would be twice the amount spent in 1996 and five times the amount spent in 1980, adjusting for inflation, Taylor said.

The estimate that stations charged an average two-thirds more than the "lowest candidate charge" came from an analysis of political ad sales logs at 10 network-affiliated local stations in large markets. Political parties and advertisers for issue groups, which do not have the same protections to get low rates as candidates have, saw their rates doubling or even tripling during the fall, the report said.

The popularity of issue ads has grown since they began in the mid 1990s, he said. Taylor noted the amount of soft money raised in 1999-2000, about $487 million, was almost double what was raised in the 1995-1996 election cycle.

Dennis Wharton, a spokesman for the National Association of Broadcasters, said there have been no recent complaints by regulators of overcharging.

"If there were widespread overcharging going on, wouldn't the agency charged with policing this have filed complaints?" he said. "To my knowledge, the Federal Communications Commission has not brought any claims of price overcharges in a number of years."

Officials at the FCC did not immediately return phone calls seeking commen