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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."