Judaism is transmitted through the female line. Kerry’s grandmother was Catholic and he’s Catholic. By the way, many, many of today’s Germans and people of German ancestry have Jewish ancestors.
Here’s some information on that:
Jewish Intermarriage in Germany and Austria
http://www.h-net.org/reviews/showrev.php?id=23086
As a disclaimer, I don't care whether Kerry is Catholic of Jew. American Jews seem to only pay lip service to Israel... if they do, at all. Look at Rahm Emanuel!