Jonathan Carter is a longtime believer in campaign finance reform. When he ran for governor of Maine in 1994, on the Green Party ticket, he refused all contributions from corporations and political action committees, and accepted no more than $100 from any individual donor. That campaign, Carter says, was a "statement," designed not to win but to publicize his eco-friendly views. He got 6.4 percent of the vote.

Carter is the Green Party nominee for governor again this year, and he's still turning down PAC money and large individual contributions. But this time, he's out to do more than just make a statement. He thinks he can win. And there's a reason for that: Under Maine's "Clean Elections" law, enacted by the voters in 1996, he will receive checks from the taxpayers totalling $900,000.

Carter has already starting using his cash windfall to bring in more experienced advisers, and has expanded his platform to emphasize issues beyond environmental health. He will have the funds necessary to spread his campaign through paid advertising all over the state. "Win or lose," he boasts, "we will get our message to every single household in the state."

He can do that because Maine has become the national capital of campaign finance reform. Anyone who wishes to pursue any state office there is granted enough free money to run a credible campaign, as long as he receives a sufficient number of $5 contributions upfront to show his serious intent. More than half of this year's candidates for the legislature are renouncing private funding and going for the public money.

The major-party nominees for governor, Democrat John Baldacci and Republican Peter Cianchette, are turning down the public subsidies and raising money the old-fashioned way. But Cianchette's primary opponent, Jim Libby, went the public route and was given $314,000 on the basis of only $13,000 in small individual contributions. Libby drew 33 percent of the primary vote.

For many of the publicly funded candidates, it is an exciting new opportunity. "I think it's a very freeing feeling," says state Representative Marilyn Canavan, who sits on the heavily lobbied House Banking Committee and helped draft the law as head of the state ethics commission. "It means I can make decisions that are right for the people of Maine, and not be concerned in the least whether any campaign contributions are forthcoming."

But whether Maine has really succeeded in lessening the role of special interests in state politics is a more complicated question. Because there are no restrictions on what the parties can spend--even on behalf of "clean candidates"--there are those who see the new law as likely to attract more special interest money, not less. Among those skeptics is the governor, Angus King. The clean elections law, he says, "has a gigantic loophole that really bothers me. You're running as a clean candidate, but the party can spend a million dollars on your behalf. To me, that undermines the whole premise. What you've really done is add a layer of public money to the old system."

The argument in favor of clean elections is that they allow candidates more time to meet with constituents instead of raising money, while liberating them from the pernicious influence of big- money contributors who will want something in return. The reality is that aggressive fundraising is continuing in Maine even as most candidates receive state funding. "Because candidates are not coming after us," says Joe Pietroski of the Maine Bankers Association, "political parties are very much after us for financial support."

Beverly Daggett, Democratic leader in the state Senate, sued to block the clean elections law, but nevertheless has "no reservations about taking the money" for her own campaigns. "It means any money I raise can go into the leadership or caucus PAC," she points out, "or anywhere else I decide I want it to go." Her Republican Senate counterpart, Rick Bennett, also opposed the law initially, but has used it as a recruiting tool and encouraged members of his caucus to accept public financing. Bennett had $280,000 in PAC funding to spend during the 2000 election cycle, and will likely raise a similar amount for this year's races.

Bennett's PAC was a heavy financial player in a special Senate election in March that demonstrated some of the major weaknesses of the new system. The three leading candidates for the Portland-based seat all ran "clean," but because the election was so close and so important--it stood to break a partisan tie in the chamber and was ultimately decided by just 10 votes--it attracted more than $100,000 in independent expenditures, far more than the candidates spent themselves.

Democrat Michael Brennan, the ultimate winner, thinks his race was an anomaly, the subject of such intense interest both because Senate control was at stake and because there weren't any other campaigns taking place at the same time. But the regular primaries and general election seem to be attracting interest-group spending of a similar magnitude. The Alliance for Maine's Future, a PAC funded in large part by the Maine Chamber of Commerce and paper and construction companies, quickly raised $93,000 this spring to support candidates in Democratic primaries in June in Waterville and Skowhegan. Maine is facing one of its periodic legislative battles over workers' compensation, and the PAC was trying to defeat two Democrats who have been leading allies of organized labor.

Some specialists see all these developments as evidence that the whole idea of cleaning up election funding is misguided. "The Maine system sooner or later will once again demonstrate the folly of most campaign finance reform," predicts Larry J. Sabato, a campaign finance expert at the University of Virginia. "There is no way to stop the flow of interested money, and there will always be constitutional ways around the restrictions enacted into law."

None of those objections have detracted, however, from the law's growing popularity. The Clean Elections Act went into effect in 2000, and in the first year of operation, half the state Senate and 30 percent of the House won election "running clean." This year, the number of candidates using public money is expected to double, and take in a majority of all candidates.

Candidates like to complain that qualifying for public money is complicated and paperwork-intensive, but the basic idea is simple. Candidates must spend no more than $100 of their own money getting their campaigns off the ground. They then must collect a set amount of $5 contributions from individuals--50 for legislative races and 2,500 in the case of candidates for governor. That entitles them to as much as $18,000 if they are running for the Senate, $4,700 if they are running for the House and $1.2 million for a gubernatorial contest-- assuming they win the nomination and remain active through the entire cycle.

Those may sound like tiny amounts compared with what is spent in larger states around the country. But Maine has a small population and a low-key political system with a tradition of informal personal campaigning. A budget of $18,000 comes closer to full funding of a state Senate election than it would almost anywhere else in the country.

In addition, the clean elections initiative has imposed stricter limits on the amounts individuals, corporations and PACs can give to candidates who opt for private fundraising. Where individuals could once give $1,000 to a candidate, and PACs and corporations could give $5,000, now all contributors are limited to no more than $250 per election.

All of this makes Maine's experiment the most extensive in the country up to now. But Arizona's may soon approach it. That state's voters approved a ballot initiative along similar lines in 1998, and in 2000, 59 candidates ran with public money. Two candidates for state corporation commissioner used public money and won.

The number of publicly funded candidates was considerably smaller in Arizona than in Maine two years ago, but that could change this year: By some estimates, as many as 70 percent of the 250 eligible candidates on the ballot in Arizona in 2002, including at least one in each of nine statewide contests, could go the public route. There also is a push to extend public funding to judicial candidates.

Arizona's population and districts are bigger than Maine's, so candidates there have to coax $5 contributions from more people. But they enjoy a bigger payoff as well. Legislative candidates receive $27,000 per cycle, while gubernatorial hopefuls get more than $1 million.

In most other states, recent efforts to give public financing a true test have run into problems. Massachusetts has yet to see its first publicly funded state campaign, even though voters approved pubic financing in 1998, because a hostile legislature, led by House Speaker Thomas Finneran, has refused to appropriate the money. Earlier this year, public finance advocates went to court and won the right to auction off state property to pay for implementation of the law, but only token amounts have been raised so far. (Their plans to sell furniture from the offices of Finneran and a pair of his allies were blocked.) Green Party gubernatorial candidate Jill Stein has qualified for even more money than Jonathan Carter--$3.4 million--but because of the legislative dispute, she'll never receive that amount. Finneran has launched an effort to repeal the law altogether.

Public campaign financing has also lost support in Kentucky. Governor Paul Patton and the legislature failed to reach an agreement on a budget this spring, largely because Republican legislators refused to fund public financing for gubernatorial candidates next year. Kentucky has a system under which candidates for governor who raise enough money can receive funds from the state that match the private dollars, as long as they agree to spending limits. Many Republicans feel that even this modest pubic funding system cost them the governor's mansion last time around. Both parties have taken their case directly to voters via radio spots.

A number of other states have enacted partial public finance laws of one sort or another during the past three decades, and some have achieved modest success. Candidates in Minnesota, for instance, tend to abide by spending limits and receive some public financing in return.

More commonly, however, public financing has been a failure, largely for one reason: The money available--usually from voluntary tax checkoff schemes--is insufficient to pay for the campaigns it is supposed to cover. Wisconsin, for example, became a pioneer when it enacted a public financing law 25 years ago. But spending limits have not been raised since 1986, and participation in the voluntary tax checkoff has fallen below 10 percent. That means that the amount of public financing grants has dropped to the point where no serious legislative or gubernatorial candidates are willing to choose them instead of taking private contributions.

State Senate candidates, for instance, can now receive $8,000 in public funds toward an overall spending limit of $34,500. That's peanuts when candidates are spending upwards of $150,000, and when million-dollar Senate races are no longer a rarity. The result is that Wisconsin's public financing system has been moribund for a decade.

Maine's law was carefully written to avoid the Wisconsin problem. Each office-seeker who takes public money gets an amount based on an aggregate average of campaign spending during the previous cycle. This year, all Senate candidates who go the public route will receive $18,000 for their general election campaigns, up from $12,000 last time. The increase is due in large part to one candidate, W. Tom Sawyer, who two years ago spent $153,064 on a Senate contest in a district in Bangor--five times as much as any other successful Senate candidate and close to 10 times the average amount spent to win a seat.

Meanwhile, the Maine legislature has appropriated more than enough money to cover the deficiencies of the tax checkoff. In 2000, this appropriated amount came to $865,000. In 2002, it is expected to rise to $2.5 million because of the increasing number of participating candidates and the expense of the race for governor. This has generated only occasional objections from legislators on the basis of cost.

There are, however, plenty of people in Maine political circles who argue that public financing remains a solution in search of a problem. In the cycle leading up to passage of the clean elections initiative, the average successful candidate for the Maine House spent less than $4,200. A significant number of privately funded candidates went far above this amount, but they didn't do particularly well: Half of the 10 highest-spending candidates for both the House and Senate lost.

The state's tradition of inexpensive elections was something that proponents of the public finance initiative were able to use to their advantage. Commercials supporting the initiative featured timeworn images of fat money-men smoking cigars. They sought to create the impression that the law was needed to preserve the state's old- fashioned political culture--that without some form of public financing, Maine could turn into another Massachusetts or New Jersey.

That may have been a little far-fetched to begin with. Maine is a state where many voters still are uncomfortable with the idea of negative advertising, let alone back rooms or political bosses. But it seems clear that, whatever the presence of special interests may have been under the old system, they have not gone away.

The state's lobbyists and pressure groups are adapting to the law, changing the way they interact with candidates seeking office. Rather than treating candidates like United Way charities, writing out checks and declaring themselves done, interest groups are recruiting candidates themselves, and then running issue ads, which do not fall under the clean elections law limits. "People are changing strategies to do the same things they've always done," says Ed McLaughlin, president of the Maine Chamber of Commerce's political wing. "I expect as time goes by and people get savvy about what they can and cannot do, you're going to see more money come into campaigns. I think part of the intent of the public in passing this law was to take money out of politics. It ain't gonna happen."