RALEIGH, N.C. — Where there is a law, there often is a loophole. Democrats and Republicans are battling over what is legal and what is not when it comes to who pays for campaign ads.

Campaign finance laws constantly are changing, and this year, third-party groups are stirring controversy. They are called 527s for their tax code.

The presidential race has been filled with critical ads sponsored by rival groups. Now, 527s are getting involved in the governor's race, and the state Board of Elections will have to decide what is legal.

It looks and sounds like the typical campaign ad. But the Democratic party claims a Patrick Ballantine commercial violates campaign finance laws.

Democratic Party Executive Director Scott Falmlen filed a complaint with the state Board of Elections -- not over misleading content that led to a new version, but because of the ad's sponsor, the

Republican Governors Association.

Falmlen said state law prohibits corporate-backed nonprofits from airing direct endorsements of candidates.

"It (the RGA) clearly supports the election of Patrick Ballantine," Falmlen said, "and it is clearly using corporate money to pay for the ad, which is illegal under North Carolina law."

Said Chris Heagarty, of the

North Carolina Center for Voter Education

: "The Democrats are exactly right that you cannot use corporate money for political purposes.

"But," said Heagarty, "it's up for a judge to decide whether these ads are political, or whether they're in that gray area that you could call electioneering or issue ads."

The Republican Governors Association is not so diplomatic.

"The ads are legal and appropriate," said Harvey Valentine, of the RGA. "The complaint is a desperate attempt by the Democrats to stifle debate."

Under the law, the candidates are shielded while the unaffiliated groups see how far they can go.

"I don't know that it's a heinous attempt to circumvent the law as much as: 'Let's see how much we can get away with it,'" Heagarty said.

Because Ballantine had nothing to do with the ads, his campaign did not want to comment for this story.

The Board of Elections could make a precedent-setting ruling on the matter at its Sept. 3 meeting.