3 I In the wake of the 2002 Bipartisan Campaign Reform Act and the Supreme Court’s 2003 decision in McConnell v. FEC, the election season of 2004 erupted with bitter accusations about the activities of certain non-profit entities. The controversy was popularly known by a single term – “527s” – that refers to the section of the tax code applicable to nonprofits engaged in political activities. The debate arose after wealthy individuals contributed huge sums of money to nonprofits ranging from America Coming Together to MoveOn.org to Swift Boat Veterans for Truth in order to support advertisements, get-out-the-vote efforts, and voter registration drives. In total during the 2004 campaign, these groups reportedly spent several hundred million dollars. As the campaign unfolded, many in both major parties – including President Bush and Senator Kerry – questioned the activities of certain non-profits. Some encouraged the FEC to ban large donations to non-profit entities in the same way that Congress in BCRA had banned large contributions to political parties. Proponents of additional regulation reasoned that non-profits had replaced political parties as the soft-money “loophole” in the campaign finance system. See Edward B. Foley & Donald Tobin, The New Loophole?: 527s, Political Committees, and McCain-Feingold, BNA MONEY & POL. REP., Jan. 7, 2004. In response, the FEC did not ban non-profits from receiving and spending large donations, as some had urged. But the FEC did limit how much non-profits such as EMILY’s List could raise and spend. The FEC achieved this objective by dictating that covered non-profits pay for a large percentage of election-related activities out of their hard-