What was the McCain-Feingold Act?
Formally called the Bipartisan Campaign Reform Act (BCRA), it prohibited the national parties and federal candidates and officeholders from raising and spending soft money—money that did not comply with FECA contribution limits and prohibitions. The law also expanded the FECA to cover elections that include candidates for both state and federal office. In those elections, the kind of grassroots and party-building activities that were once partly financed with state-regulated money now must be financed only with hard, FECA-regulated money.
To cover some sham issue ads, BCRA created a new category of federally regulated expenditures called "electioneering communications." These communications are defined as television or radio ads that mention a clearly identified federal candidate and are aired within thirty days of a primary and sixty days of a general election. BCRA required that these ads be financed with hard money even if they did not use any of the "magic words." The Supreme Court upheld the law by a 5-4 vote in McConnell v. FEC (2003).12
The parties and non-party groups now had to find new ways to get outside money into federal elections. The first way was through a new, and less regulated, variant of a familiar and fully regulated political committee: the 527.