National Democrats are trying their luck with a series of candidate ads that inhabit a gray area of the law, and observers say the approach could be a game-changer in the continuing battle over campaign finance reform.

In recent weeks the Democratic Senatorial Campaign Committee (DSCC) has begun its 2008 ad campaign by funding issue ads that feature their candidates in Mississippi and Oregon and are coordinated with their campaigns.

Campaign finance regulations restrict the amount of money the DSCC can spend on coordinated efforts with a candidate’s campaign. But because the ads don’t ask viewers to vote for the candidates, Democrats contend that law doesn’t apply.

Republicans argue the ads are illegal — or at the very least, unethical — and have filed complaints with the Federal Election Commission (FEC). The ads are also being judged in the court of public opinion, and the GOP has gained some traction with a media blitz.

The larger question, though, is how the controversy might affect the way the campaign game is played.

Campaign finance and election law experts say the approach could change the way national committees approach elections by allowing them to work more with candidates early in the campaign.

The strategy is largely unprecedented under current campaign finance rules, but the impact could be big.

Campaign Finance Institute Executive Director Michael Malbin said that if the ads are allowed, whichever party has more money will gain a “substantial advantage.”

“I think you can expect the party committees flush with cash to be able to dispend substantial amounts of money early in the campaign to set the issue agenda,” Malbin said.

Malbin noted that allowing the committees to work more directly with the candidates, versus independently, allows for better message discipline.

The DSCC’s new Mississippi ad features Senate candidate and former Gov. Ronnie Musgrove (D).

The committee has also funded part of the Oregon Democratic Party’s series of issue ads featuring Sen. Gordon Smith’s (R) opponent, state Rep. Jeff Merkley (D).

The ads mostly praise the achievements of the Democratic candidates, but they make no mention of the Senate campaigns and they close by asking viewers to contact Congress.

The only close precedent for the ads appears to be in 2006, when a DSCC-funded issue ad featured Sen. Ben Nelson (D-Neb.) during his reelection campaign. The DSCC said it has also run coordinated issue ads that didn’t feature its candidates, but none of these ads caused as much controversy as the latest batch.

Experts are split on whether the ads pass muster.

While Jennifer Duffy, a Senate race analyst at The Cook Political Report, and others say the legal question is an open one, election law expert Jan Baran said Democrats appear to have an airtight case, because candidates are allowed to participate in “non-express advocacy” communications outside of 90 days before the general election.

“I think that is correct,” Baran said. “It’s consistent with FEC regulations.”

Experts say Republicans could argue that the regulation doesn’t correctly interpret that law.

Regardless of the legal controversy, though, the ads have already gotten lots of critical ink in Oregon, and could also in Mississippi. The campaign of Sen. Roger Wicker (R) is fighting back with an FEC complaint and the National Republican Senatorial Committee (NRSC) is fighting the substance of the ad with its own Web ad.

Duffy noted that the Democratic Congressional Campaign Committee (DCCC) could also benefit from the strategy with its massive cash advantage.

But she said the Republican pushback is warranted.

“I generally consider most FEC complaints filed by campaigns to be pretty meaningless, but this is a very substantive question, and Smith and Wicker are absolutely right to pursue this,” Duffy said.

Democrats have been upfront that the ads test the spirit of the law, but they maintain that they don’t break it.

Oregon newspapers haven’t been pleased with that explanation; the Portland Oregonian, Eugene Register-Guard and Medford Mail Tribune have all run editorials critical of the approach.

Despite the negative press, the DSCC went forward with its Mississippi ad last week.

DSCC spokesman Matthew Miller said the committee would “certainly” consider using the strategy in the future but wouldn’t comment on whether similar ads were waiting in the wings.

“They are perfectly legal,” Miller said. “We did this last cycle, and this is what the law allows.”

NRSC spokeswoman Rebecca Fisher said the reaction from the Oregon media shows the Democratic strategy is not paying off.

“Oregon Democrats are playing fast and loose with the rules, and voters aren’t fooled,” Fisher said. “What they see is a campaign starring Jeff Merkley but run and financed by the party. Not quite the change voters had in mind.”