A new series of TV commercials featuring sinister photos of Osama bin Laden may signal what's to come this fall: a wave of secretly financed political attack ads. The spots, by a group called Defense of Democracies, which was just created by former Republican National Committee spokesman Cliff May, target 15 House Democrats for their failure to support a White House-backed electronic-spying bill. May told NEWSWEEK he plans to spend $2 million on the ads, but declined to identify who is financing the effort, saying he set up the group as a tax-exempt nonprofit—known in the federal tax code as a "501(c)(4)"—thereby permitting it to engage in political advocacy without disclosing donors.
The ads spotlight what some experts say is a gaping loophole in the campaign-finance laws. On Dec. 26, 2007, the Federal Election Commission quietly issued new rules in the wake of a Supreme Court decision last June that give more latitude for 501(c)(4) groups to run political "electioneering" ads without disclosing contributors. That helped blow open the floodgates. In 2004, the chief conduit for such ads were so-called 527 groups, among them the Swift Boat Veterans for Truth. But 527s had to identify donors. Now, said one GOP consultant who asked not to be identified talking strategy, "everybody is doing 501(c)(4)s because you don't have to disclose anything."
The rush to take advantage is underway. A consortium of liberal groups led by former Clinton chief of staff John Podesta announced plans last week for a $20 million campaign attacking John McCain for his Iraq War support. The ads are part of a $200 million "independent" effort that will aim to "define" McCain on a host of fronts, including his "temperament," said one participant who asked not to be identified discussing the consortium's plans. Freedom's Watch, a conservative 501(c)(4) whose board includes Las Vegas casino billionaire Sheldon Adelson, is planning to spend up to $250 million attacking the eventual Democratic presidential nominee for being soft on Iraq. Meanwhile, veteran "oppo" researcher Dave Bossie says his longstanding Citizens United 501(c)(4) has begun work on a $10 million effort that will include a feature film about Barack Obama. Among the issues "on the table," Bossie told NEWSWEEK, are Obama's ties to indicted developer Tony Rezko and former Weather Underground radical William Ayers. (Innocuous in both cases, Obama says.) "What we are trying to do is educate and inform voters," Bossie says. They might never find out, though, who's paying for their education.