GROUPS LIKE ours are potentially very dangerous to the political process. We could be a menace, yes. Ten independent expenditure groups, for example, could amass this great amount of money and defeat the point of accountability in politics. We could say whatever we want about an opponent of a Senator Smith and the senator wouldn't have to say anything. A group like ours could lie through its teeth and the candidate it helps stays clean."

So speaks John Terry Dolan, 29, one of the foremost leaders of the New Right. A collection of far right groups, they have become a phenomenon in this election year. They are the "independent expenditures" brigade. They have been denounced by liberals and some mainstream conservatives alike. Dolan is chairman of the National Conservative Political Action Committee (NCPAC). It is, according to preliminary Federal Election Commission reports from January 1979 until this June, the leader of all PACs in gross receipts -- over $4 million. "We're bugging the hell out of them," says Dolan, with a self-satisfied grin.

A short, slim, mustachioed young man, Dolan proudly shows off his suite of offices in Arlington, where he creates his "attack" ads, brochures and fund-raising pleas, collecting and spending thousands a month. NCPAC is active on two fronts. (1) Targeting six liberal Democratic senators -- Frank Church, George McGovern, Alan Cranston, John Culver, Birch Bayh and Thomas Eagleton -- spending almost $700,000 on predominately negative advertising. (2) It is one of five committees dedicated to raising millions in support of Reagan's candidacy.

Dolan goes after his opponents with the ferocity of an enraged terrior; senators hit by his ads howl that they are spurious, distorting, often inaccurate, and that there is at very least a tacit-acceptance of Dolan's function by some of their opponents. Let them howl, says Dolan. For Dolan is not only finding loopholes in the Federal Election Reform law, he is taunting the FEC, the lawmakers and everyone else. "It's a stupid law. They're gonna take me kicking and screaming to jail before I stop my activities. Look," says Dolan, punching out his sentences in fast bursts, revealing his true intention in a repeated battle cry, "we're saying 'come and get us.' That law should go."

Dolan's theories often have an interesting simplicity to them. Take government management, for instance. He scathingly says Reagan does not go far enough with proposed budget and tax cuts. The federal budget, under Dolan, would be doled out this way: "99 percent for Defense -- keep America strong -- and 1 percent on delivering the mail. That's it. Leave us alone."

Critics of the New Right decry what they perceive as a no-compromise, no-accommodation stance. Liberal George McGovern calls them members of the new right, "angry and intolerant, equally incapable of believing that they can be mistaken or that those with whom they disagree might have honorable intentions. They call themselves 'conservative' but their zealotry, self-righteousness and vindictiveness toward those with whom they disagree connote something radically different from authentic conservatism."

And some Republican officials have characterized NCPAC as a "loose cannon on the deck." William Brock, national chairman of the Republican Party, commented, "You can't build a party around those emotional social issues. The New Right groups . . . draw attention in Congress away from the broad issues of tax reduction, job creation, health care, housing -- the American Dream issues."

Says Dolan: "Brock should have been fired long ago." Dolan once said, "The Republican Party is a fraud. It's a social club where the rich people go to pick their noses."

What are NCPAC and other similar groups managing to do, and why is everyone so angry? And why have lawsuits, charges and countercharges been flung with all the regularity of campaign promises? A brief explanation:

The staggering facts department of elections, American style, revealed that in 1972 a mere 153 individuals contributed $20 million to President Nixon's campaign. Reacting to Watergate and such contribution practices, Congress passed the 1974 Election Reform Act. Individuals can contribute only $1,000 per election to a candidate for federal office, including president. And groups like NCPAC are allowed to contribute $10,000 directly to a Congressional and presidential candidate ($5,000 primary and $5,000 general). Once a Democratic or Republican presidential nominee accepts federal funds, private contributions are prohibited. But now, in 1980, various "independent" groups -- including NCPAC -- are gleefully spending millions to defeat senatorial candidates and additional millions on Ronald Reagan's campaign. How so?

In 1976 a collection of odd couples in politics -- from leftist Eugene McCarthy to rightist James Buckley, from the ACLU to Human Events, the conservative weekly -- challenged the election reform law on the ground that it violated their first amendment rights. The Supreme Court ruled in basically upholding the act that independent groups cannot be prohibited from spending any money in support of or in opposition to a candidate so long as their is no collaboration or cooperation between the campaign and the people making these independent expenditures.

Now enter the "independents" -- who have seized upon this loophole to spend their millions. These PAC's differ from corporate and labor union PAC's. Independents can, as one FEC official said, "solicit the world," reaching out to the public while corporate and labor union PACs can only go to a targeted group for their money -- the corporation to its stockholders, executives and administrative personel; the union to its membership. In addition to its activity in senatorial races, NCPAC is one of five committees aiming to raise from $35 to 55 million to support Reagan's candidacy. Reagan has alreay picked up his $29.4 million check from the U.S. Treasury. The Reform law said that was all he was supposed to get. But NCPAC and other groups (which include among them longtime Reagan supporters Senators Jesse Helms and Harrison Schmitt, who were Reagan delegates at last month's convention) say they are independent enough to raise the megabucks on Reagan's behalf. Dolan's "Ronald Reagan Victory Fund" plans to spend $4 million (they spent almost $100,000 last month alone) and Dolan proudly claims, "We're the first of the independents to get on the air with our ads."

A sample of the ads: "In 1976, Jimmy Carter said, 'Why Not the Best?' That's what he said.Now look what he gave us: Andy Young, the man who called Ayatollah Khomeini a saint, forced to resign after lying to the president; Bert Lance, forced to resign for questionable banking practices Peter Bourne, forced to resign for supplying drugs to a White House staffer."

A definition of "independent" is a sometime thing. Terry Dolan has more than a passing awareness of Ronald Reagan. NCPAC filed with the FEC in 1975 and a few months later a personal letter from Reagan asked his legion of supporters all over the country to support the Virginia-based outfit. "He, is" claims Dolan, "one of the main reasons NCPAC is here today." Terry Dolan's brother works for the Reagan campaign. Dolan's chief pollster, Art Finkelstein, does work for Reagan. Dolan is co-owner of an Alexandria office building along with longtime Reagan aide Lyn Nofziger; Paul Russo, a 1980 Reagan campaign staffer; and Roger Stone, Reagan's northeast coordinator in the primaries and now a consultant to Reagan and former NCPAC treasurer. A tenant is Richard Viguerie -- NCPAC's virtual creator and right-wing fund-raising czar for Reagan as well as many of the independent expenditure groups. A network of friendship and contacts began when most were Yaffers (members of Young Americans for Freedom.) "There is no crime in being friends," argues Dolan.

The Democratic National Committee charges in its complaint to the FEC that all this coziness of New Right leadership forms a "seamless web" and that they are "probably incapable of acting truly independently of each other." Common Cause is suing one of the committees, Americans for Change. (Arguments will be heard this week.) "There is collusion in this," charges DNC Chairman John White. "It's the same old heavy-handed misuse of the political system." Archibald Cox, chairman of Common Cause, claims such independent groups "threaten a return to the old Watergate tactics and influence of money in politics."

Dolan says he makes few moves without checking it out first with his lawyers. "We got an advisory opinion from the FEC which says the use of polling data is not an "independent expenditure' it's an 'operating expense.' So whether Finkelstein does stuff for us and Reagan is beside the point. I know it's a ridiculous ruling but the FEC is stupid. We asked them the nine toughest questions we could think of on what constitutes 'independent' and they came up with nine of the stupidest answers. The lawyers check over our ads for libel. So if Andy Young wants to sue, sue."

So the challenges goes on as to whether these groups of friends are independent (they claim they do not consult with Reagan or his staff). Fred Wertheimer of Common Cause contends, "If they figure out a way not to make direct contact, their actual philosophy is one of coordination and it is quantitatively different from a truly independent guy out in Des Moines taking out a full-page ad because he likes the candidate."

In a display of candor, Jesse Helms -- the Patron Saint of NCPAC -- allowed as how at the Republican convention it's been an "awkward situation" since the federal election law "forbids me to consult with him [Reagan]. I've had to, sort of, talk indirectly with [Sen.] Paul Laxalt [Reagan's national campaign chairman]." Helms drawled, "I hope that he would pass along, uh, and I think the messages have gotten through all right." Dolan says his commercials will "depend on the Reagan campaign strategy." And how is he going to find that out? "By reading the newpapers on his plans."

The chuckles in NCPAC circles are long and loud. But for those who see a troublesome subversion of the intent of the law, it is no laughing matter. Says Wertheimer, "NCPAC and Dolan and these other groups are out to destroy campaign financing laws. They want to eliminate the parts that have been effective. Today you don't see huge sums from single contributors looking for favors. These groups want to unravel the whole process and get back as quickly as they can to the big spender days when 153 individuals contributed $20 million to Nixon."

As for the FEC, its critics form a long line; the agency seems to have all the clout of a moth hitting a summer screen. One FEC official admitted that the battle could drag on indefinitely, that the FEC, with its makeup of three Democrats and three Republicans, is leery of "interjecting itself. Either way it acts it's going to be perceived as political." With a sigh, he delivered a true bureaucrat's lament, "This is a very strange place. We've achieved the distinction of being disliked by everybody -- those who think we can do something and those who think we can't."

Dolan sits in his office in front of pictures of some of the senators he's targeted this year. The hair is close clipped, the mustache trim. From time to time, Dolan opens his bottom drawer, gets out a roll of toilet paper, rips off a few pieces, blows his nose and puts the roll back.

Some of Dolan's views sound like slogans of raw anger. "The biggest threat to America -- it isn't the commies, it isn't the oil companies. The biggest problem is the United States government. The U.S. government has done more to destroy the American spirit." "There's nothing unjustified in ridding the world of Fidel Castro. He's the same as Idi Amin. The only difference is one has a beard," and then the smile, "and one has darker skin." He admires William Buckley because he can "knock anybody down in two seconds." He admires "the strength of a Patton or a MacArthur." Carter is "our weakest president ever." It is easy to get around the FEC because "they're a bunch of mindless bureaucrats who know less about the first amendment than they do politics."

Dolan says "Liberals never bother to find out if conservatives are right. Take a voucher system for education -- if you paid for private education, you'd get tax breaks." How would that help families with children in public schools? "Who said it would?" Well, what if you can't afford private schools? "Well, that's who public school is for," he says, indifferently.

Dolan is also for getting the government out of nearly everything that doesn't please him. Federal social programs should be done away. "Say next year we cut all food stamps. It would take moral courage, if that's what it takes, to, if you were a local politician, decide your state was going to give out food stamps. Gov. Carey, say, is going to have to have the courage to give out the food stamps, not the federal government. Of course, I don't think people should starve in America. But our system discourages responsibility ."

A special scorn is reserved for the liberal targets of his negative advertising -- Senators Church, McGovern, Bayh, Cranston, Eagleton, Culver. "I like to see 'em squirm. They deserve it." Dolan proudly points to his polls that show Church and McGovern behind, and thinks there is a good chance "at least two, possibly four, can be defeated. It's just possible that the conservatives could take control of the Senate."

Dolan has been called everything from irresponsible to sleazy by those he targets. A few years ago his heavily negative espousals would have been considered on the fringe. RNC Chairman Brock has denounced the independent approach as detrimental to the RNC mainstream fund-raising.Dolan sneers, "Every chance he's got Brock tries to screw Reagan. He's frustrated by jealousy. We're raising the funds. We're on the cutting edge of politics."

Lest one confuse Dolan with mainstream Republicanism, Dolan hastens to thumb his nose at both parties. "The only difference between Republicans and Democrats on a presidential level is the Democrats tell you they're going to screw you and the Republicans tell you they're not going to screw you -- and do it anyhow."

He likes to appear impervious to the charges leveled at him. "I'm not after respectability. That doesn't bother me. The only thing I care about is if we're effective.I'm absolutely convinced our negatives on Carter will stick. We've got a couple more 'attack spots' planned." One will include Billy Carter. Ethnics and southern accents will be prominent as Dolan develops plans for his rural markets, but there will be no blacks. "Let Brock spend the RNC's money to try to get that vote," he said.

Some Reagan aides murmur that Reagan privately wonders if Dolan and others like him will create a backlash with their negative advertising, but Reagan so far has done nothing to publicly to disavow them.

Dolan's ads are more often than not "against" a candidate, rather than "for" someone. Alan Crawford's new book "Thunder on the Right," calls the New Right the "politics of resentment."

Dolan retorts, "I know I'm screwed up, but at least I admit it. That's more than I can say for the author of that silly book."

Dolan seldom loses his cool but one subject that causes a bit of nervous fumbling is something his opponents discovered last week. NCPAC had not reported a single itemized contribution since October 1979 -- despite over $2 million in receipts. Dolan admits the omission. "2 just found that out! We're going to take immediate action; of course we're going to amend the reports," he says quickly. "It was just a comedy of errors," he contends. "We had, ah, a new bookeeper and she just discontinued itemizing them." (According to federal statute, any contribution over $200 has to be itemized; failure to do so could be ruled a serious violation of disclosure laws." "I just don't know what happened. We're not trying to hide anybody. We don't have any H.L. Hunts. I wish we did. Joe Coors has contributed but not this year."

One irony is that the very law he lambastes, created the Dolans and Vigueries. The direct mail mills (Viguerie has a reported 5 million names) sprang up when small doners became vital to campaigns after large individual contributions were ruled out.

Opponents accuse Dolan of bending and distorting the facts. Dolan himself seems to indeed have a casual attitude toward some of the details in his advertising.

In a spoof of the Dating Game, Dolan put together a minute radio spot called The Rating Games. It was used against Cranston, Bayh, McGovern, Church and Culver. In each ad there is a "Mrs. Verna Smith" -- from Sacramento in one, Indianapolis in another, and so on. "Oh yeah, that name appeared in all the ads. It's a phony name, but I don't think anyone listening to the ad would take it seriously."

Dolan also plans a half-hour film "using Ronald Reagan. That'll drive the FEC crazy. It's a part of his acceptance speech. I think we are violating the regulation -- it says you cannot rebroadcast something of the candidate -- but as far as I'm concerned, the regulation is unconstitutional," says Dolan.

An exasperated Frank Church accused Dolan of "scummy tactics" and was successful in getting NCPAC to withdraw an ad that erroneously accused him of voting to increase his Senate pay. Another ad -- which stayed on -- showed an empty missile silo and stated that because they were empty "they won't be of much help in defense of your family or mine. You see, Senator Church has almost always opposed a strong national defense . . ." The obvious implication was that Church's votes had emptied out that silo -- even though it had been made obsolete by a more advanced weapons system. "Innuendo? Sure," says Dolan. 'But I have absolutely no ethical qualms about that. It's symbolic of his record."

Ads against George McGovern charge that he is a "baby killer" (he is pro-choice) and one has him in the gunsights as a 1980 target. "That's not our stuff, even though he is a baby killer. We wouldn't use such rhetoric, McGovern in the gunsight, I don't see anything wrong with that. It was not intended to mean you ought to shoot McGovern." Who did those ads? A man named Dave Bell. "Well, Bell used to be an employe of ours -- but not in this campaign." Some NCPAC ads attack McGovern as favoring "a gas tax that could reach 50 cents a gallon . . . and voting "against energy tax incentives." McGovern staffers protest "that's dead wrong. He has never proposed such a tax measure in the Senate." To that Dolan says, "Well, he supported Anderson's plan." Back to the McGovern staff: "He never did! And McGovern has cosponsored measures and voted for energy tax credits for individuals and companies installing energy conservation devices." Dolan says "They're lying."

Dolan uses The American Farm Bureau Federation, a right wing, anti-union group, to base his rating on farm voters. Senators he attacks howl that this distorts the vote and that Dolan should use the National Farmers Union rating. Dolan says, "That's just a pro-union, anti-business organization."

When Dolan kicked off his Get Eagleton campaign, the senator's staff fired off a letter to Dolan: "Your 'analysis' of the Eagleton record which you distributed yesterday fully lives up to your earned reputation for inaccuracy, distortion and untruths." NCPAC castigated Eagleton for "giving $75 million of taxpayers' money in aid to revolutionary government in Nicaragus." Eagleton voted against aid to Nicaraqua, his staff pointed out. NCPAC said Eagleton voted against the Hatfield amendment which would cut off funds for the neutron bomb. Eagleton, in fact, supported only one restriction on the neutron bomb. Shrugs Dolan, "We had corrections passed out at that time. We sent letters to radios and newspapers and said we did make a couple of mistakes in the analysis of the record -- but that just proves he doesn't vote all bad all the time. They're just trying to discredit us. Want to make out we're schnooks."

In a last winter fund-raising letter to "stop Kennedy," Dolan charged that Kennedy "can legally spend as much of his own money [on his own campaign] as he wants -- and he's got millions." When asked about it, Dolan seemed vague about the details, even though he signed the letter. This is, of course, inaccurate, as Kennedy had applied for matching funds and is therefore limited to spending $50,000 of his own money. "Oh, our statement was an accurate statement of the law -- we didn't mention matching funds. It's all so incredibly irrelevant."

Dolan's father was manager of the Sears Roebuck store when he was growing up in Fairfield, Conn. Irish Catholic -- except for the "one quarter Swiss" -- Dolan learned about politics early. His mother ran for local office when was young. At first the Dolans were Democrats but switched to the GOP. "They even voted for Jack Kennedy because he was Irish," Dolan recalls. Dolan attended private high school in Connecticut and then Georgetown University. "I managed to survive four years of their (Georgetown's) socialist doctrine," he says witheringly (1968 to 1972). Dolan was in school during the Vietnam War although he "firmly believed it was a moral duty, trying to resist communist agression." Dolan was heavy in the Yaffer movement and in such counterprotests as Honor American Day

He majored in government and German.

His brother, Anthony, went on to become a Pulitzer Prize-winning journalist and Dolan drifted more to the right in his interests. "I used to be a Republican. I used to be a political hack, but then in 1972, it was like a sexual awakening. I couldn't understand these strange urgings to do conservative things. On the ballot I saw John Schmitz (the American Party presidential candidate who once quipped that he had "gone pretty far in life for a Catholic Bircher with a mustache") and I had this urge to pull the lever."

Dolan worked for right wing causes and then got in on the ground floor when NCPAC was formed in 1975 -- along with Charles Black, a former Helms aid who worked for Reagan until he was fired along with campaign chairman John Sears this spring. Dolan describes NCPAC as a "central bureau" to help conservatives -- both Democrats and Republican. Helms was "the prime mover. He gave us credibility." A hugh stockpile of lists and names in Viguerie's and Helms' possession were fed into the NCPAC operation. "Helms just went to his magic computer," says Dolan. "It is a perfect list for anti-abortion, anti-ERA, anti-gun control and pro-Human Events (magazine)."

Dolan acknowledges that NCPAC was a creation of Dick Viguerie. "In 1978 about 90% of our money was Viguerie-raised. Now he does about 50% -- probably a little over $2 million by the end of the year." At one time he was heavier in debt to Viguerie but now says NCPAC owes "only about $50,000."

There seems to be no getting around Dolan's luck with the FEC -- the group he constantly belittles. The South Dakota Democratic party filed a suit challanging Dolan's independent status, charging that he openly encouraged Jim Abdnor to run against McGovern. "I know we did," says Dolan with a chuckle. "We admit it. ,He admits it. We just led him up to the nomination. We got an advisory from the FEC that we could do it." The FEC has reportedly decided to rule 4-2 to dismiss the suit.

Dolan leads a visitor around his empire -- a whole floor of an Arlington office building. Next to his office is the National Conservative Research and Education Foundation and next to that is Conservatives Against Liberal Legislation (CALL). Dolan is on the board of directors. Rhonda Stahlman, who runs CALL, a lobbying outfit, can be buzzed on Dolan's telephone. A handful of volunteers are working Xerox machines; there are "Nuke Now" signs around.

There is a commonality of board of directors but we keep the finances separate. We used to do post-election analysis -- but why should NCPAC do it when a tax deduction agency (his research outfit) can do it? It's totallly legitimate. Sure we use the information in upcoming elections but there is nothing wrong with that."

There is, in fact, a real sense of expansiveness as Dolan brags, "Nothing that NCPAC does is illegal. If we went out of business tomorrow I could pocket everything. Of course, I wouldn't -- but I could . Why? Because the law makes no sense. They ought to scrap it." The smile is there to the last. "You can do what you want with PACs."