Legal Definitions - Bipartisan Campaign Reform Act of 2002

The Bipartisan Campaign Reform Act of 2002 (BCRA), often referred to as McCain-Feingold, was a significant piece of United States legislation designed to reform the way political campaigns are financed. Enacted to amend the Federal Election Campaign Act of 1971, its primary goals were to limit the influence of money in politics by addressing two key areas: unregulated "soft money" contributions and certain types of political advertising.

Before the BCRA, federal law regulated "hard money" – direct contributions to specific candidates – but allowed unlimited "soft money" donations to political parties for general activities like voter registration or party-building efforts. This soft money was not subject to the same federal limits and disclosure requirements as hard money, creating a loophole that allowed large sums of money to influence elections indirectly. The BCRA aimed to close this loophole by largely prohibiting national political parties from raising or spending soft money in federal elections.

Additionally, the BCRA sought to regulate "issue advertisements" – political ads funded by corporations or unions that discussed political issues or candidates close to an election, but without explicitly telling people how to vote. The Act classified these as "electioneering communications" and placed restrictions on their funding by corporations and labor unions. However, a significant portion of these restrictions on independent expenditures by corporations and unions was later overturned by the Supreme Court in the 2010 case of Citizens United v. Federal Election Commission, which affirmed the right of these organizations to spend unlimited amounts of money on independent political communications.

• Example 1: Soft Money Restriction for National Parties

  Before the BCRA, a major technology company might have donated $10 million annually to a national political party's general fund. This money was then used for broad "party-building" activities, such as developing campaign technology and training staff, which indirectly supported federal candidates across the country without being subject to federal contribution limits. After the BCRA, the technology company would no longer be able to make such an unrestricted "soft money" donation to the national party for these purposes, forcing them to contribute within federal "hard money" limits or through other regulated channels.

• Example 2: Impact on State Party Fundraising

  In 2001, a wealthy individual could donate $2 million to a state political party committee specifically for a "get out the vote" campaign that would operate statewide. While this activity was ostensibly for state elections, it would inevitably register and mobilize voters who would also participate in federal elections, indirectly benefiting federal candidates from that party. The BCRA restricted how state and local parties could use "soft money" if it affected federal elections, requiring more of these funds to comply with federal regulations or be segregated into accounts strictly for state-level activities, thereby limiting the influence of large, unregulated donations on federal races.

• Example 3: Regulation of Issue Advertising (Pre-Citizens United)

  In September 2004, a prominent labor union wanted to run a series of television advertisements in a specific congressional district. These ads highlighted the incumbent's voting record on trade agreements, urging viewers to "consider who truly represents American workers" without explicitly telling them to vote for or against the candidate. Under the BCRA, these types of ads, run close to an election and referring to a clearly identified federal candidate, were classified as "electioneering communications." The Act initially prohibited corporations and labor unions from using their general treasury funds to pay for such ads, aiming to prevent their direct influence on federal elections through unregulated spending. While this specific restriction was later overturned by the Citizens United Supreme Court decision in 2010, this example illustrates the BCRA's original intent to regulate such independent expenditures.